Agencies may need help managing stimulus money

Federal agency officials may need outside help to spend and track $21 billion in economic stimulus law money by Sept. 30 as stipulated under the new law, according to an analysis released today by the market research firm FedSources Inc.

“That is six months, folks,” Ray Bjorklund, senior vice president and chief knowledge officer of Fed Sources, said at a conference. “That is not a lot of time to execute on this. I think they [agencies] will need some help.”

A large portion of the $787 billion goes for new grants, subsidies and tax incentives, while about $62 billion is to be distributed through federal spending accounts accessible to contractors.

The $62 billion flowing to federal accounts is considered directly addressable by contractors, which means companies bid for work paid for from those accounts. Of that amount, $21 billion must be spent in fiscal 2009 and $41 billion in fiscal 2010 and beyond, Bjorklund said.

Agencies also must meet reporting requirements that include weekly updates that started March 3, agencywide recovery plans due on May 1, grants award transaction data feeds that start May 5 and monthly financial reports that begin May 8.

“This is a fast-moving train,” Bjorklund said. “There is not a lot of time left.”

Federal procurement officials may need to consider hiring professional services consultants to perform risk management and set up systems for reporting and tracking the stimulus money and outcomes, he said.

Also, agencies may speed the process by using existing contracts, he said. Bjorklund estimated that about 20 to 25 percent of the contractor-addressable stimulus funding will be spent through existing contracts, up from about 15 percent from current fiscal year funding.

In carrying out the law, agencies also may consider foregoing some of the small business preferences and set-asides to streamline processing of the stimulus-related contracts, he added.