Is the GSA / MAS Schedule Recession-Proof?

It is a dog eat dog world, but the GSA/MAS Schedule is as close to recession-proof as possible. Government procurement can save businesses and offer a reliable form of income, even in times of uncertainty.

More so, the U.S. Federal Government does not often shut its doors, giving your business a consumer that does not run out of funds.

The Economy is Booming

Recent economic news is excellent, and firms generally do not explore alternative sales channels such as government sales when the private sector performs so well. For nine consecutive years, the United States has seen economic expansion.

In many cases, businesses are having a hard time keeping up with current demand from existing customers. Additionally, the current global pandemic will lend a heavy hand in this year’s economic status.

The Devil’s Advocate

According to studies conducted by the San Francisco Federal Reserve, the economy has a 25% chance of entering a recession in any given year. This percentage is not affected by how many consecutive years in a row the economy is in recovery.

The reality is that most recessions are triggered by mistakes made by the country’s central bank. Either raising interest rates too quickly, keeping them low too long, creating bubbles. Tweaking too little, too much too late, etc. The government has many pros and cons built into every move it makes.

The San Francisco Fed, through studies it has conducted, has determined that the most forward indicator as to whether the economy is about to go into recession or not is the spread between the 10 year and 2-year Treasury note.

When this percentage is positive and large, it is a sign those participating in the economy see a better long-term future. When this spread goes negative, it is the strongest economic bellwether for a recession. Currently, this spread sits at .42% and has been in a downward trend since 2014.

Conclusion

GSA Schedule Contract is near recession-proof. The average small business with a GSA Schedule contract does approximately $880K per year in federal sales. So, for some businesses wanting a consistent stream of revenue, a GSA Contract can and will serve you well.