Government Contracts Monitor

American Recovery and Reinvestment Act

February 17, 2009

As all Americans know, President Obama signed the American Recovery and Reinvestment Act ("ARRA") into law on February 17, 2009.  This legislation undoubtedly offers an excellent opportunity for government contractors.

The ARRA also commits an unprecedented amount of funding for agencies to regulate and oversee how these contracting dollars are spent.  Firms interested in obtaining ARRA contracts should carefully assess their regulatory compliance efforts and implement any necessary enhancements before contracting with the Government.  Firms also must take caution to ensure that they fully understand the ramifications of all terms contained in any contract they accept from the government. 

Summary of Projects

ARRA is good news for government contractors.  The legislation dedicates billions of dollars to projects in virtually every area of government contracting - including transportation, water and flood control projects, energy development investments, scientific research and technology, improvements and energy efficiency in Department of Defense and other federal facilities, and healthcare modernization. Some of the designated funds in those areas include:

Transportation:

$27.5 billion for modernizing roads and bridges;
$8.4 billion for improving public rail and transit;

$8 billion in high speed rail investments including Amtrak and intercity rail;

Water and Flood Control:

$19 billion for clean water, flood control, and environmental restoration;

Energy Development Investments:

$30 billion for various energy initiatives such as modernizing the energy grid;
$3.4 billion for fossil fuel research;

Scientific Research and Technology

$15 billion is invested in scientific research;
$7.2 billon to increase broadband access and usage to underserved communities;

Department of Defense (DOD) and other Federal Government Facilities:

$4.5 billion to make federal office buildings more energy-efficient;
$4.2 billion to make improvements in DOD facilities;

Healthcare Modernization:

$19 billion to modernize health care by accelerating adoption of Health Information Technology (HIT) systems.

Compliance, Oversight, and Other Government Contract Issues

While ARRA provides great opportunities, businesses that accept Government funds must comply with numerous regulations. In fact, unprecedented oversight, accountability, and transparency processes have been built into the American Recovery and Reinvestment Plan to protect taxpayer money from fraud and wasteful spending. Firms interested in contracting with the Government for the first time should implement the requisite compliance programs prior to bidding on stimulus contracts. Those firms that already contract with the Government must evaluate their compliance efforts to ensure sufficient compliance measures are in place.

Due to the effort to implement much of the spending as quickly as possible, considerable protections have been built into the plan to ensure the funds are spent correctly. Whenever it is feasible, existing formulas and proven programs with tough accountability measures already in place will distribute the funds. ARRA provides for considerable transparency and the opportunity to directly track how the money is spent. In addition to creating a special web site that will allow the public to monitor the spending, the Act sets aside special funds to assist the Inspector General of each federal agency and the Government Accounting Office in conducting audits and investigations. ARRA also establishes special protections to protect state and local whistleblowers. Finally, spending will be monitored by the Recovery Act Accountability Office in order to find early problems with the spending.

This level of oversight means it is now more important than ever for government contractors and subcontractors to have effective compliance programs in place. It will also be important for any firm who chooses to accept a Government contract to understand fully the totality of requirements under that contract. Jackson Kelly attorneys are available to help companies ensure they are prepared to win and successfully perform Government contracts in today’s market.