It’s been nearly six months since its passage into law. Yet despite the thousands of pages of information that it’s generated, the American Recovery and Reinvestment Act remains a source of many unanswered questions. Is it on track? What industries have been most impacted? What growth opportunities is it generating – and where?
For some answers, Monster turned to Michael Balsam, Chief Solutions Officer at Onvia, a Seattle-based public company that launched www.Recovery.org on March 31, 2009. The site tracks American Recovery and Reinvestment Act (ARRA) spending by Federal, state and local government agencies.
Monster: Is the timeline and rollout of Economic Stimulus projects on track?
Onvia: We continue to see thousands of projects that have been approved but are not yet underway.
Monster: Is the Stimulus timeline similar to other government initiatives?
Onvia: Recovery spending is different from traditional government spending programs because of the huge volume of spending intended to happen in a compressed time period. Based on the large volume of projects that require detailed planning, there is a backlog of projects that have not yet begun.
Monster: What industries and projects are using ARRA funds?
Onvia: In keeping with the timelines set out in the legislation, the majority of the early spending has been focused on transportation. The goal of the highway program to obligate half of the available dollars by mid-June has largely been met. That said, it is important to note that businesses should be aware of the breadth of spending under each program. For example, technology spending will be a meaningful part of every program even though it isn’t called out directly in the ARRA. Consider all the technology investments required to build smart roads, smart buildings and alternative energy solutions.
Workforce initiatives are also heavily underway. These range from summer youth service programs to training for dislocated workers.
Monster: Is there a typical type of employer and company that’s bidding on or otherwise pursuing ARRA-funded projects?
Onvia: This is wide ranging. A significant portion of the direct Federal spending will be through existing contracts in order to expedite spending. Large Federal contracts are often held by integrators who serve as the prime contractor, who in turn hire specialized subcontractors to perform the work.
Two-thirds of the recovery spending will be through state and local government, which is often a more appealing marketplace for small businesses.
It is still too early to do a broad analysis of the types and sizes of companies as the majority of obligated funds have not yet been spent.
Monster: What opportunities are available for smaller businesses to find work on ARRA-funded projects?
Onvia: Projects funded with Federal dollars have established goals for small and disadvantaged business participation. Many of these opportunities will be as subcontracting opportunities. In addition, the home weatherization initiative will ultimately be carried by thousands of small contractors.
Monster: What will the next six months likely bring with respect to Recovery Act projects?
Onvia: Now that reporting requirements have been finalized, state and local governments will undertake efforts to build the systems required to report on spending. This will create opportunities for accounting consultants, IT staffing and technology.
Monster: Are there any particular industries or job categories that will see a lot of growth?
Onvia: In July, we will begin to see a ramp up in educational investment as grant dollars are distributed and the new fiscal year begins. In addition, many of the projects that have had funds obligated will be getting underway. Obligation of funds doesn’t create jobs, actual spending of the funds in local communities creates jobs.
Monster: What about specific regions of the country?
Onvia: Recovery funding is moving through existing programs. Allocation is generally population based, so regions with higher concentrations of citizens receive higher proportion of funding. The exceptions will be investment in rural transportation infrastructure and potentially broadband when that program gets underway.
Monster: Will the opportunities likely be in grants, contracts or subcontracts?
Onvia: All of the above. But the volume of funding available through grant programs presents an opportunity for businesses to get closer to their agency partners. Economic conditions have left agencies generally understaffed. Businesses should be helping agencies identify available grant programs to fund the purchase of goods and services.