AGC: Stimulus money moving much too slow

|  July 30, 2009 |

Hailed just months ago as the savior of the construction industry, the American Recovery and Reinvestment Act (aka the stimulus bill), is now characterized as disappointingly slow.

That’s the word from Stephen Sandherr, CEO of the Associated General Contractors of America, who said in a press conference today: “With construction employment at almost double the national rate, it is disappointing to see so many stimulus programs get off to a slow start.” Sandherr also shared the results of a recent poll the association took of nearly 1,000 of its members. The poll shows that even after five months into the federal stimulus program there is little difference in hiring and purchasing patterns between the companies doing stimulus funded work and companies that are not.

The bottleneck seems to be the government itself. The Army Corps of Engineers got $4.6 billion in stimulus funds but to date has obligated only $715 million and paid out just $84 million. The General Services Administration got $5.9 billion to play with yet has obligated only$656 million and paid out $12 million. The Environmental Protection Agency was given $6 billion for clean water and drinking water programs, but has spent just half of one percent of that.

A critical shortage of state and federal contracting officials is contributing to the slow pace of disbursements, Sandherr said, and the AGC has sent letters to all these agencies urging them to rehire recently retired officials to help clear the expedite the process and get the money flowing.

A panel of contractor-members present at the press conference also noted that confusion about the Buy American requirements in the ARRA have caused some confusion and that federal and state agencies are still struggling to interpret the mandates.

Sandherr said that he considers the ARRA to be a worthwhile effort, but just not fast enough. Where the funds are being spent it is helping to save jobs, but as of yet has had no impact on companies ability to hire additional or previously laid off workers. “The stimulus will keep our industry alive, but it will not turn around a trillion dollar construction industry overnight,” he said.

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