Agencies seek 'shovel-ready' stimulus projects
Much of the money for IT is slated for later years
Now that President Barack Obama has signed a $787 billion economic stimulus package into law, government agencies and contractors are scrambling to assemble lists of projects for which funding can begin to flow immediately. The administration and Congress have put much of their emphasis on "shovel ready" infrastructure projects that can push money into the economy quickly, but there is also a goodly sum available for technology initiatives, where the challenge is to identify projects that can benefit from an immediate influx of funding.
Focusing on so-called shovel-ready projects is helpful, agreed Robert Atkinson, president of the Information Technology and Innovation Foundation. “Everyone needs to understand that timeliness is the most important thing,” he said.
The economic recovery legislation contains large IT-related allocations, including $19 billion in new spending and tax incentives for health information technology, $7 billion in new spending for broadband, $4.5 billion for smart electrical grids and $4.5 billion for green federal buildings.
In a report released Feb. 13, the Congressional Budget Office said $1.7 billion would be spent on those four programs in 2009, leaving the bulk of the spending to occur in 2010 or later.
The programs most likely to benefit in the short term are those for which contracts are already in place, according to research firm Input. “Shovel-ready is a meaningful term” for such projects, said Schalene Dagutis, a project manager at Input.
Input has identified $66 billion in funding in the stimulus package — mostly for technology — that could be channeled through existing contracts. For example, there is $1 billion in funding for additional Transportation Security Administration scanners for checked baggage at airports. Using the existing contract for that technology would save time that otherwise would be spent writing new contracts or establishing new program offices.
“One of the goals is to get the money in place and moving,” said John Slye, a principal analyst at Input. “Adding money to existing programs makes sense.”
Shovel-ready IT spending could also be a boon for state and local governments. The U.S. Conference of Mayors on Jan. 17 issued a “Ready-to-Go” list that identified more than 18,000 infrastructure projects on which $149 billion could be spent immediately. The projects would create 1.6 million jobs in about 800 cities in 2009 and 2010, the organization said. Some of that spending will cover computers and networks.
The mayors’ list includes $30 billion for energy block grants and green jobs, $7 billion for school modernization, $6 billion for public safety jobs and technology, $5 billion for airport technology and infrastructure, and $1 billion for Amtrak.
An additional $48 billion would be channeled immediately to state governments’ economic stabilization efforts, of which a portion might be spent on discretionary projects such as IT. A portion could pay for school modernization and school computers, said Michael Wendy, a spokesman for the Computing Technology Industry Association. But those might be lower priorities than fiscal stabilization for some states, he added.
Much of the health IT spending is in the form of incentive payments to doctors who buy and use electronic health record systems. CBO estimates that those payments will total about $600 million in 2009 and 2010 but will jump to $4.7 billion in 2011. Even so, the marketing push to doctors is likely to begin soon, Dagutis said.
There is also an immediate opportunity for small-business owners, including physicians, to receive an accelerated depreciation tax benefit for as much as $250,000 in equipment purchases, including computers, Wendy added.
In other areas, CBO estimates that $64 million will be spent on rural broadband and $83 million for Commerce Department broadband this year. The spending jumps to $350 million for rural and $756 million for Commerce broadband in 2010 and remains high through 2014.
The quickest way to get the broadband money spent in rural and underserved areas would be to immediately issue a request for proposals for service to areas where no broadband service exists, Atkinson said. He suggested allowing all qualified companies to bid and providing funding to one company in each designated geographic area.
“I would get something on the street immediately,” Atkinson said.