Administration plans to pick up the pace on stimulus spending
During a morning Cabinet meeting, Vice President Joe Biden highlighted 10 major Recovery Act initiatives that will begin in earnest within the next 100 days, including hiring or keeping employed about 5,000 police officers, creating 125,000 summer jobs for youth and cleaning up 20 environmentally contaminated Superfund sites. The upcoming projects, listed on the White House Web site, also are intended to make long-term infrastructure improvements to 107 national parks, 98 airports, 90 veterans medical centers and more than 1,500 highways.
"We're going to do it continuing to operate in a transparent fashion so that taxpayers know this money is not being wasted on a bunch of boondoggles," President Obama said.
The administration expects to save or create 600,000 jobs in the second 100 days of Recovery Act implementation. The White House said at least 150,000 jobs were saved or created during the first 100, but those figures are based on a macroeconomic formula rather than hard data.
"It's about pace on the ball," Biden said. "Every 100 days, if we're doing this right … should produce more than the last 100 days."
House Minority Leader John Boehner, R-Ohio, said the administration is doubling down on a "bloated government spending scheme." Rep. Darrell Issa, R-Calif., ranking member of the House Oversight and Government Reform Committee, noted the Obama team still lacks a "reliable mechanism … to track and monitor stimulus spending."
Meanwhile the Reston, Va., research firm INPUT late last week released a report card on the first 100 days of stimulus spending, indicating mixed results on the goals of issuing Recovery Act contracts competitively and through fixed-price arrangements.
INPUT found that nearly 90 percent of stimulus procurement spending has been channeled through competitive awards. Most contracts issued have been fixed-price arrangements, but they are generally of smaller value, representing only18 percent of the total procurement spending, according to the report. Larger contracts typically have been cost-plus or time and materials awards -- vehicles Obama has criticized for cost overruns in Iraq and Afghanistan.
The report also noted that only 11 percent of $3.9 billion in federal Recovery Act contract actions through May 27 went to small businesses. One explanation, according to INPUT chief executive officer Tim Dowd, is that a high percentage of contracts have been for Environmental Protection Agency cleanup projects or Energy Department research -- both of which generally favor large companies. Most of the shovel-ready transportation contracts involving smaller firms were awarded by state and local governments, and that data will not be available until October.
The Recovery Act did not set a specific goal for small business contracting, but the administration has strongly encouraged agencies to reach out to smaller firms. The annual governmentwide small business contracting goal is 23 percent.
In addition, while most contracts were awarded competitively, many went to companies that had pre-existing agreements with agencies, INPUT found. Federal procurement data showed that 94 percent of federal contracts issued thus far have been awarded against deals that predated the stimulus. The Recovery Act allows the use of pre-existing contracts, but their prevalence in the early stages indicates that "if you are not an existing player … then it gets steeper to climb that hill and get some of that business," Dowd said.
Procurement observers said pre-existing contracts help relieve the burden on the acquisition workforce but do little to improve competition and decrease prices.
"The political pressure is to get the money out the door and these existing vehicles are the path of least resistance," said Jaime Gracia, a senior associate with Octo Consulting Group in Vienna, Va. and the author of a blog on acquisition issues. "But, transparency, accountability and being good stewards of taxpayer dollars are not served using existing contracts."
INPUT gave the administration a grade of C- for contracting effectiveness and B+ for speed of spending.
The industry group was significantly harsher in its transparency assessment, giving the administration a grade of D due to incomplete guidance from the Office of Management and Budget and the scarcity of hard spending data on Recovery.gov. The administration also received an "incomplete" for job creation, with INPUT noting the lack of a formula for indirect jobs established.
"It is doubtful that the American people will ever know exactly how many jobs are created or preserved by the [Recovery Act]," the report concluded.