INPUT Delivers Revealing Report Card On Economic Stimulus Package
Report card grades Obama Administration's implementation of The American Recovery & Reinvestment Act of 2009
Reston, VA (Vocus/PRWEB ) June 5, 2009 -- INPUT, the leading authority on government business, announced the first report card grading the Obama Administration on its execution of stimulus package objectives during the inaugural 100 days of the American Recovery and Reinvestment Act (ARRA) of 2009. Grades were issued on four key recovery areas: Speed of Spending, Job Creation, Transparency & Reporting, and Contracting Effectiveness.
Speed of Spending received INPUT's highest mark by earning a B+, but the administration came up short in both Transparency & Reporting and Contracting Effectiveness, receiving a D and C- respectively, while earning an Incomplete in Job Creation. INPUT explained its tough grades for Transparency & Reporting by noting that the Obama Administration created confusion among contractors, states and units of local government with its changing reporting requirements, while providing inadequate information to the American people.
"The federal government demonstrated uncharacteristic adeptness in dispensing a tremendous amount of money in a very short time," said Timothy Dowd, CEO of INPUT. "But what happens after the funds are distributed is where the administration struggles and where INPUT's report card offers sub-par grades. Federal, state and local government agencies across our country are confused by the regulations and require greater guidance on how to best comply with reporting requirements."
According to INPUT's analysis of Vice President Biden's first Quarterly Report to the President on Implementing the American Recovery and Reinvestment Act of 2009 and the weekly financial and activity reports submitted by federal agencies as of May 22, 2009, the federal government will spend $294.1 billion by September 30, 2010 if it continues distributing funds at its current pace. The administration's goal is to spend $350 billion by September 30 of next year. Based on these facts, the economic stimulus package received a B+ in Speed of Spending. INPUT analysis uncovers that the shortfall to meeting the Administration's goal is likely caused by agencies spending money much like they have in the past, relying extensively on cost-plus contracts and existing contractors to fulfill its requirements.
In President Obama's address to the joint session of Congress on February 24, 2009, he indicated ARRA will save or create 3.5 million jobs. Since the Act was signed into law, the national unemployment rate has climbed from 8.1 to 8.9 percent. Currently 13.7 million people are unemployed. During April, more than half a million people lost their jobs. INPUT analysts doubt that the American people will ever know exactly how many jobs are created by the stimulus package, a significant factor in the administration receiving an Incomplete grade for Job Creation. While recipients of ARRA funds are required to report on job creation, those reports will not measure indirect job creation.
The Council of Economic Advisors' (CEA) report on ARRA job creation, released on May 11, 2009, included guidelines to government agencies on how to report job creation. The report included what is referred to as a 'simple rule' for calculating job-year creation: $92,000 of government spending creates one job-year.
"INPUT believes the CEA's calculation is unsound when applied to calculating the number of jobs created or preserved by ARRA," continued Dowd. "The calculation cannot accurately account for indirect jobs created, nor predict jobs that may or may not be lost in the future--this rule appears to be a form of new math."
On Reporting & Transparency, INPUT gave the government a D. With reporting guidance delayed or not available, the government has created confusion among government agencies and contractors. The D also reflects a lack of information and functionality on the Administration's Web site, www.recovery.gov.
"The administration's launch of Recovery.gov is a good first step but the information there is not comprehensive," said Dowd. "Meanwhile, the reporting requirements are still unclear. For example, since the House version of the legislation was introduced, the Office of Management and Budget (OMB) has issued six memos directing agencies on how to administer the funds. With all of the changes to guidance, the administration has gotten off to a rocky start and has created much confusion among the organizations being asked to comply with these new requirements"
In the Federal Contracting category, the Obama Administration scored a C-. INPUT evaluated the Administration on its goal of maximizing the use of fixed-price contracts and competitive procedures rather than relying on no-bid and cost-plus contracts that generate higher costs for taxpayers. By this measure, federal fall short as only 18 percent of the reported value of contracts to date have been fixed price. Conversely, nearly 90 percent of the reported contract obligations are being channeled through competitive contracts. Just more than 11 percent have been to small businesses, well below the government-wide goal of 23 percent*. With the small business sector responsible for creating 60-80 percent of new jobs since the mid-1990s, this pattern of spending may not translate into significant job growth generated by small businesses.
Comment and Graphics Available
INPUT CEO, Tim Dowd, is available for media inquiries.
INPUT's report card is available here.
About INPUT
INPUT is the authority on government business. Established in 1974, INPUT helps companies develop federal, state, and local government business and helps public sector organizations achieve their objectives. Over 2,000 member organizations, including small specialized companies, new entrants to the public sector, and the largest government contractors and agencies, rely on INPUT for the latest and most comprehensive procurement and market information, consulting, powerful sales management tools, and educational & networking events. For more information about INPUT, visit www.input.com or call 703-707-3500.
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*Small Business Administration, FY 2007 Government-wide Scorecard, http://www.sba.gov/idc/groups/public/documents/sba_homepage/gov_wide_assessment08.pdf
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