By Barbara DePompa

As the federal government quickly works to distribute funds via the American Recovery and Reinvestment Act of 2009, much still remains unclear about how agencies and departments will appropriate funding, while simultaneously achieving transparency and regulatory compliance.

Economic stimulus package appropriations total $787.2 billion, with key funding initiatives to support technology, science and research, infrastructure improvements, education, energy, healthcare and training. Spending provisions within ARRA require agencies to have projects under way within 120 days of enactment, dramatically shortening the typical two year business development timeline.

Market research firm IDC estimates ARRA will generate more than $100 billion in technology spending in the next five years.

And INPUT, a market research firm in Reston, Va., just published a report card on the government’s performance in June, as the ARRA law crossed the 100 day mark. The administration achieved high marks for spending (B+), and a number of below average grades for job creation (Incomplete), transparency and reporting (D), and contracting effectiveness (C-).

According to INPUT’s Deniece Peterson, principal analyst, the report card, “Underscores a good news and bad news scenario in allocating so much funding, so quickly.”



While the federal government has shown an unusual adeptness in dispensing a tremendous amount of money in a short time period, accurate reporting on that spending and the impact on job creation appears to be a pipe dream. Also, “it’s unclear whether the American public will ever know the full impact of ARRA on the economy and the extent to which ARRA’s funding initiatives pull the economy out of its current recession,” she explained.

By relying heavily on previous federal contracts and existing contractors to fulfill the ARRA program’s requirements, the federal government has moved quickly to implement IT modernization within Foreign Services, the State Department and the Social Security Administration, for examples. Spending an average of $3.66 billion per week, according to INPUT’s report card, the government has been able to update IT operations and really dig into those shovel-ready transportation and infrastructure projects, “many of which had previously been languishing, awaiting monies for their completion,” Peterson explained.

INPUT’s report card estimates that the government must actually pick up the pace on spending, to an average of about $4.16 billion per week, to achieve its goal of allocating $350 billion by Sept. 30, 2010. And while the first pieces of the spending plan have gone to projects that were already on the government’s strategic IT plan, there are several key areas that are expected to expand as the government moves forward. For instance, broadband network stimulus grants are planned that will enhance this technology nationwide. “But before the federal government can spend an estimated $9 billion on broadband network expansion, they must complete a $350 million inventory of current network coverage, so they can figure out precisely where the grants should go to complete a national broadband network
expansion,” Peterson explained.

Another key area of growth is the smart grid, which will include devices, software and systems that can be used to integrate and communicate between electric power systems and other systems for greater efficiency, lower cost of operation and greater reliability. The economic stimulus law includes $4.5 billion for development of smart grid systems. Advancing smart electric grids will involve integrating energy technology and information and communications technologies.

In terms of spending on energy efficiency, the funding has only just begun, Peterson said, as further planning is needed to outline what a national electric smart grid will look like, and the technologies that will support the grid, including monitoring tools, power management solutions and other analytic devices that may be used in this initiative, Peterson explained.

Another area of technological growth is in the federal government’s web infrastructure, which Peterson describes as requiring analytic tools, monitoring and measurement functions that can help federal agencies track everything from access breaches to utility usage, for examples.

The 100-day ARRA report card highlighted the biggest obstacles ahead, including major concerns both within government circles and among industry suppliers about how to work with the ever-evolving ARRA reporting requirements on the distribution of stimulus funding, as well as the risks involved in fixed price contracts, which may be difficult to fulfill due to ill-defined, or unclear contract requirements. “This is likely why federal agencies have heavily relied on current ‘cost-plus’ contracts to allocate funding for stimulus projects until now,” Peterson explained.



Another obstacle, according to Stan Soloway, president and CEO, Professional Services Council, is workforce-related. Gaining acquisition support for all of the RFPs expected in the coming months, and finding a way to close the skills gap on contracts, either by hiring new employees or outsourcing to gain those skills, is creating enormous pressure on federal agencies, he said. “The problem is that federal agencies don’t want Congress to question their choices of outside contractors in stimulus spending decisions, when reporting requirements on allocated funds finally catches up with agency contract awards,” he said.

Also, the need to hire/insource acquisition support professionals will likely slow the allocation of stimulus funding, Soloway said, as many decisions won’t be made without political pressures and scrutiny. When agencies use ARRA to set new operational processes into motion, the workforce, systems, capabilities and reporting systems struggle to keep pace with change. There are challenges federal agencies must work through to measure the performance, or outcomes of new processes, that will take time. And both Soloway and INPUT analysts expressed doubt the federal government will be able to adequately align stimulus spending with actual jobs saved and performance outcomes.

Soloway said the General Services Administration (GSA) has been first to admit that the pressures surrounding reporting and compliance on stimulus spending will continue to grow. The GSA is “really bringing its forces to bear across all regions” to deal with challenges in adequately measuring results. He cited the appointment of Tony Costa, to acting commissioner of GSA’s Public Buildings Service (PBS), as a step in the right direction. Costa is a 20-year GSA veteran with extensive experience at PBS, which oversees the government’s real estate portfolio.

The limitations of fixed-price contracting grow increasingly apparent when dealing with the repairing/upgrading buildings 50 years old or older, Soloway explained. The work involved in bringing those buildings
up to environmental efficiency standards is sophisticated work that typically won’t fit under a fixed price contract.

Soloway suggested the use of agency “tiger teams” as a good idea to help government organizations build ‘more integrated process teams’ that will help set government organizations on the right path toward specific stimulus spending projects offering a higher potential for successful implementation.

Meanwhile, industry suppliers underscore the difficulties involved in figuring out how best to aid agency partners in achieving their goals. John Thompson, vice president, integrator alliance sales for Motorola, said there’s money for border protection, especially within the Customs and Border Protection technological fence project, which is owned by Boeing. At the same time, within the Department of Health and Human Services (HHS), the development of standards for electronic health records (EHR) and a requirement to show ‘meaningful use’ of electronic healthcare records may slow the allocation of funds for doctors and other healthcare practitioners who are eligible when they invest in EHR technologies.



Industry suppliers are also scrambling to aid agencies in tracking stimulus funding, according to recent news reports, via software and services to track and share information on economic stimulus programs. Microsoft, for example, rolled out software called Stimulus360, based on its SharePoint collaboration software, to track stimulus-funded projects. And other suppliers, including Acumen Solutions, IBM
and MicroStrategy have debuted tools to manage ARRA projects as well.

Meanwhile, at a June Economic Stimulus conference in Falls Church, Va., sponsored by the 1105 Government Information Group, GSA’s Mary Davie, assistant commissioner, Office of Assisted Acquisition Services, said the GSA is working with agencies that ask for help on the reporting requirements for ARRA. “We keep track of OMB guidance on ARRA reporting requirements, as well as new clauses within the FAAR, which include additional terms and conditions that must be accepted, in order for agencies to use ARRA funding,” she said.

Increasingly, she added, federal agencies are also seeking GSA’s assistance “in providing general  IT and professional services, while they work on projects that allocate stimulus funding.”

Davie said the GSA currently supports most civilian and DoD agencies in all areas pertaining to the lifecycle of contracts, from requirements definition, to market research, to acquisition strategy, planning, conducting the acquisition, implementing and managing contracts, as well as financial reporting and project closeout. “We do all of that, on a per requirement basis, based on the needs of agencies,” she explained, adding that the GSA will also assist agencies on consulting services for task orders. “We can help agencies structure task orders, and after, provide service/support as needed."