Stimulus Funds Flow Unevenly

The amount of construction work funded by the American Recovery and Reinvestment Act (ARRA, popularly called the stimulus legislation) varies greatly by state and program. Two weeks ago, I spoke on successive days to state transportation officials in Colorado, New Mexico and Maine. They said they had awarded contracts covering 69%, 80% and 100% of their respective DOT allocations. But, of course, those percentages don't necessarily correspond to amounts paid out or even work started. Other states are far behind those three in even holding bid-letting days to pick contractors. Meanwhile, the only contractors in those states who reported having received - or even heard about - stimulus projects were highway contractors. It appears that little of the more than $100 billion of non-highway stimulus construction money has turned into projects under way. One reason for the delay has been the requirement to use only U.S.-made iron, steel and manufactured materials. For certain water and wastewater treatment pipe, fittings and equipment, even the U.S.-based manufacturers incorporate foreign-made components in their products. The Environmental Protection Agency has issued a half-dozen waivers to allow non-U.S. equipment but there are reportedly three times as many requests awaiting waivers. In addition, there has been uncertainty over reporting and other administrative requirements. AGC staff have submitted detailed comments on areas needing clarification and met with agencies to get them to expedite grants, loan guarantees and contracts so the stimulus act will work as intended to save or create much-needed jobs. ARRA includes a variety of bond and tax credit provisions intended to spur more construction. States and localities have begun to issue taxable Build America bonds to fund projects that would have waited longer for traditional tax-exempt financing. But governments differ a lot in how much use they have made of these or other new and expanded financing mechanisms. Contact simonsonk@agc.org if you win a stimulus contract, are involved with any ARRA financing vehicle, or hear about contracts being delayed for any reason. AGC will use the information to make sure all levels of government improve their performance in making stimulus put construction workers and others back on the job.