A well known reality among government contractors is the anticipated decline in government spending during the next few years with the goal of shrinking the federal deficit, which is expected to exceed $1 trillion for a fourth straight year.
According to a recent MarketWatch article, a Bureau of Economic Analysis indicated that “government consumption expenditures and investments (goods and services the government buys directly) have fallen at a 2.8% annual rate since the stimulus began to wane in late 2010.”
Plus, things could get a whole lot worse for government contractors, especially if Congress does not step in and block the required $400 billion in Department of Defense budget cuts that will further decrease government spending.
In response to these realities, government contractors and technology providers have shifted to focus on key areas of need where the government is inclined to invest resources, such as cloud computing and information security. They are also wringing out profits from their existing portfolio of contracts by identifying ways to reduce costs.
One area of cost reduction for government contractors involves the processing of credit card transactions. By participating in the GSA SmartPay charge card, contractors are able to substantially reduce costs of processing fees with the collection and passing of Level-3 data on transactions.
Margin improvement can increase as much as 1.5 percent (reduce your current costs by as much as 40-50%), as a result of special rates offered by Visa and MasterCard for processing GSA SmartPay card transactions. Moreover, contractors achieving Level-3 compliance reduce their exposure to fraud.
Getting Level-3 compliant is a difficult and cumbersome process, right? Well…wrong. In fact, we have outlined an easy to follow process and the resulting benefits in this free white paper.