Stimulus Expected to Have Sweeping Ramification for Contracting Industry
The $789 billion stimulus bill, H.R. 1, which passed Congress February 13, is expected to have sweeping ramifications for the contracting industry. Four themes throughout the stimulus foreshadow what federal contractors can expect from the Obama Administration: energy efficiency, transparency, competition, and oversight.
a. Energy Efficiency
The package includes $20 billion aimed at “green” jobs to improve energy efficiency in schools and federal buildings. GSA Public Building Service has a $4.5 billion earmark for green federal building renovations. The Multiple Award Schedules program is poised to greatly benefit from this appropriation since their leadership has been working with PBS extensively to tout usage of the MAS program to fulfill the requirements of the stimulus. There is also a $4.2 billion appropriation for military base renovations and $100 Billion for other construction related projects.
b. Competition
To the greatest extent possible, contracts awarded from stimulus funds must be done firm-fixed price.
c. Transparency
A new website, www.Recovery.gov, will house descriptions of how stimulus funds will be spent, findings from audits, Inspectors General reviews, and information about subcontracting opportunities. Agencies have the autonomy to decide what information should be reported on the site; however, if a contract is awarded sole source or not through firm-fixed price, it is expected to be on www.recovery.gov.
d. Oversight
H.R. 1 calls for the creation of an Accountability and Transparency Board comprised of certain agency Inspectors General and other individuals designated by the President to coordinate and conduct oversight of stimulus federal spending to prevent waste, fraud, and abuse.
e. Other noteworthy policy in the stimulus
The Buy America provision requires the use of American steel, iron, and manufactured goods in construction, alteration, maintenance, and repair projects funded by the stimulus. This applies only to raw steel sold for constructions projects, not steel that happens to be part of a COTS product, like furniture. The Buy America clause allows, for example, imports from the 38 countries with which the United States has trade agreements. Among the nation’s major trading partners, only Brazil, India and China would be subject to the restriction.
The acquisition community could have a challenging time fulfilling the needs of the stimulus as 70% of the funds must to be expended within 18 months. During Iraq and Katrina reconstruction contracting, large appropriations likewise were doled out in a short amount of time. This led to increased oversight that could only get worse during this new Administration and Congress. If contractors are not careful with their contracts awarded from stimulus funds, it will have sweeping ramifications of increased oversight for several years to come.
Trade associations, like the Coalition for Government Procurement, are increasingly relevant in this economic and political climate. It is imperative that industry take the opportunity to stay ahead of the curve in their markets, get to know the players, and keep up to date on all the latest policies and regulations so they are protecting their bottom line. The Coalition is poised to ensure their member companies achieve this and more.
Authored by:
Barbara Merola
Coalition for Government Procurement
