Pace of stimulus contracting picks up

During the last month, obligations by federal, state and local governments for stimulus contracts have nearly doubled, according to Mike Pickett, CEO of Onvia, a Seattle technology firm that tracks Recovery Act spending through the Web site Recovery.org.

Pickett told the House Oversight and Government Reform Committee on Wednesday that Recovery.org currently is tracking $90.7 billion in stimulus spending, which includes nearly 22,000 projects. At the beginning of June, the site was following $59 billion in stimulus contracts.

The Obama administration has said that approximately $60 billion in Recovery Act funds will go to contractors.

"The good news regarding the nation's employment picture is that the pace of stimulus spending has accelerated dramatically over the last month," Pickett said. "There is 50 percent more stimulus spending in the pipeline now than there was one month ago."

Onvia's figures represent projects that have been publicly reported by a government agency or an entity such as a local school board. They do not necessarily reflect checks cut by the Treasury Department and given to contractors.

For example, of the more than $90 billion in stimulus obligations tracked by Recovery.org, roughly 6,800 projects worth more than $17 billion are currently at the request for proposals stage, meaning a contract has not been awarded yet.

"We can see this money, but it's not yet in the hands of a contractor," said Nate Wilcox, a spokesman for Onvia.

To date, federal, state and local governments have paid out roughly $21 billion to contractors for nearly 3,000 Recovery Act projects.

Applying the macroeconomic jobs formula developed by the White House Council of Economic Advisors, Pickett estimated that between 128,000 and 233,000 jobs have been created through stimulus contracts already awarded.

The multiplier formula, which critics say is overly simplistic, suggests that $92,000 in government spending creates one job per year. The administration has claimed that 150,000 jobs were saved or created in the first four months of the stimulus, and that approximately 600,000 jobs will be created during the next quarter.

But Pickett warned that the administration's system of relying on contract obligations to calculate jobs saved or created could be faulty.

"Employers are not going to retain or hire new employees until they have the contracts in hand," he said. "The job creation will come once the contracts are awarded."

The administration has yet to provide its own breakdown by contract of stimulus spending. But according to data on Recovery.gov, as of July 3, $174.9 billion has been obligated for projects of all types, and $60.4 billion has been paid out.

Additional data is expected to be available in October, when funding recipients are required to report on their stimulus spending.

During Wednesday's hearing, Pickett also took issue with the reporting guidance issued in June by the Office of Management and Budget, arguing that it fails to capture vital information and lacks "cradle-to-grave" visibility.

The guidance requires prime recipients and first-tier sub-recipients to report to a central data system. Sub-recipients who issue funds directly to a vendor also will have to report that spending. Subsequent pass-throughs, however, to a second sub-recipient -- for example a town or municipality -- would be exempt from the requirements.

OMB Deputy Director Robert Nabors testified on Wednesday that 95 percent of all Recovery Act dollars subject to the reporting requirements will be captured through the guidance and that only a small percentage of funding will go through more than one sub-recipient.