Navigating Recovery.gov

The federal government's recovery.gov website is actually becoming functional for those who want a centralized, sort of searchable site for seeking out projects to bid on. Here's how to do it:

Open the Recovery.gov home page by typing Recovery.gov into your Google search box. When the home page opens you will see a block on the lower right portion of the page headed "State Progress and Resources." Click on that block. Doing this will open a page which has one blue link "Agency Recovery Sites," which will open a list of federal government agencies that already have their own sites listing projects they are building. The same page has a U. S. map. If your state is colored blue on the map, clicking on your state will take you directly to your state's own web site for Recovery Act projects. If your state is still tan, your state site is not yet up and running. I suggest checking back daily to see when it goes up, so you don't miss out on any of the bidding.

Along similar lines, the Senate Homeland Security and Government Affairs Committee just reported out a bill which would require establishment of a single federal website for announcing, applying for and processing all federal government grants. They are trying to eliminate all paper from the process and to put everything on line.

Monday Senators will have a chance to offer amendments to the omnibus appropriation bill passed this week by the House for fiscal 2009, which must be completed by March 6 or the government will run out of cash. Look for a conference committee to be convened mid week after the Senate markup. However, nobody expects the Senate to eliminate any of the 8,330 earmarks costing an estimated $7.7 billion from the legislation.

Finally, if you are in the D.C. area, protest marches expected Monday may spur the federal government to fund a project for converting all of the boilers in the D.C. power generating plant from coal to natural gas. This will provide a lot of jobs to local contractors and tradespeople.

Please use this information to help your construction business participate in the government funded recovery of the economy of our industry.

Fiscal '09 Budget Passes House

On a vote of 245 in favor and 178 opposed, the $410 billion fiscal year 2009 omnibus appropriations bill passed the House February 25. The Senate has to vote on the bill next week because the continuing resolution funding federal government operations at fiscal 2008 levels expires March 6. Unless the Senate passes the omnibus before that deadline, another continuing resolution would be necessary to avoid a government shutdown.

This appropriation for fiscal 2009 includes budget increases of about 8% for most federal government operations. It also contains 8,330 earmarks, which can be viewed at this link:

http://appropriations.house.gov/FY2009_consolidated.shtml

Senate Majority Leader Harry Reid says he expects the bill to pass the Senate before the March 6 deadline, so when federal employees leave work Friday afternoon they will know they can report back on Monday morning, expecting to get paid for their efforts.

Meanwhile, President Obama unveiled his budget outline for fiscal 2010, which for the first time in many years actually includes every dollar the federal government truly expects to spend, including war spending by the Department of Defense, and a contingency fund for natural disaster relief. The total budget is $3.55 trillion.

The Obama budget outline includes plans for spending over the next ten years, rather than the five year plans the Bush administration was fond of presenting. The outline contains a few things which should give encouragement to the construction industry:

Spending $150 billion over ten years for clean energy initiatives.

Spending $5 billion over 5 years for high speed rail construction, in addition to the $8 billion appropriated in the stimulus legislation.

Spending $64.5 billion on other transportation projects.

In other pro-construction talk around Washington, Interior Secretary Salazar wants to fund a Civilian Conservation Corps of 10,000 young trades workers to begin addressing the $8 billion backlog in national park projects, starting with such urban facilities as Independence Hall in Philadelphia and the Frederick Douglass Home in Washington, D.C.

One negative in the outline is the suggestion that the stimulus bill's one year deferral of the new three percent withholding tax on government contractors will not be made permanent, and collection of the tax will start next year.

Have You Ever Seen An Earmark?

There has been a lot of talk during the presidential campaigns, and since the inauguration of President Obama, about Congressional earmarks in appropriations legislation. Have you ever seen an earmark? If not, click on this link to the House Appropriations Committee home page and you can see 9,000 of them:

http://appropriations.house.gov/FY2009_consolidated.shtml

The link will take you to a listing of the various portions of the $410 billion omnibus appropriation bill pending in the House of Representatives for fiscal year 2009. Congress has to pass this bill before the end of March to avoid a government shutdown. After each section of the bill you will see a line that looks like this:

Summary : Bill : Statement : Certification Letters

Click on "Certification Letters." These letters are the "earmarks" everyone has been talking about. They are requests by individual Senators and Representatives that money be set aside out of the appropriations for specific projects. Note well that the letters do not specify how much is being requested in the earmark.

If you are looking for specific projects in your locality to bid on, scroll through the 9,000 earmarks in this bill and find the letterhead of your own Senators or Congressman, and the letter will identify the project money is being earmarked for.

Happy Hunting!

Earl Devaney To Head "RAT" Board

Deftly ducking any risk of another Senate confirmation embarrassment, President Obama today named Interior Department Inspector General Earl Devaney to head the Recovery Accountability and Transparency Board ["RAT" Board] charged with overseeing the efficient and effective expenditure of the billions of dollars appropriated in the economic stimulus legislation. How much do we pay the guy who dreams up these acronyms - the RAT board to rat out waste and corruption?

Because Devaney was confirmed as Interior Inspector General by the Senate in 1999, no confirmation process will be required for this new post. Slick. Devaney, a former Secret Service agent, led investigations into the Jack Abramoff lobbying scandal, and party hearty misbehavior by officials in Interior's Minerals Management Service. Look for Devaney's hard hitting reports soon on Recovery.gov.

Congress Takes Up Electricity Grid Modernization

The next big Congressional appropriation for the construction industry will be funds for modernization of our aging electric transmission grid, according to Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi, House Energy and Commerce Chairman Henry Waxman, Senate Energy and Natural Resources Chairman Jeff Bingaman, and House Global Warming Chairman Edward Markey. Speaking today at a gathering attended by Bill Clinton, Al Gore, T. Boone Pickens and other leading clean energy advocates and investors, Pelosi said: "The [stimulus legislation appropriations for] renewable energy resources will mean nothing if there's not a grid to transmit it. ... We have an opportunity to shape this framework."

Obama transition team leader John Podesta is looking for appropriations to fund the modernization of 2,000 miles of electricity grid, and installation of smart meters in 40 million homes.

OMB Issues Recovery Contracting Guidance

Wednesday, February 18, Peter Orszag, Director of the Office of Management and Budget, issued a 60 page memorandum of guidance to all federal agencies responsible for awarding contracts, loans and grants under the stimulus legislation signed earlier this week. The memo contains many details about various government accounting processes and procedures, and how they will have to be augmented to provide the public with information regarding where all of the billions of dollars get spent.

Nevertheless, buried in the morass of detail is some key information important to construction businesses regarding where to look for projects to bid on, grants to apply for and loans which will be made available under the dozens of new and ongoing programs which will get the $149.8 billion appropriated specifically for construction by federal government agencies.

Before contracts are let for bid by federal agencies, the information about the bids will be posted here:

http://FedBizOpps.gov

Grants available under the federal programs will be listed here:

http://grants.gov/

Finally, available federal loan programs for construction projects will be listed here:

http://govloans.gov/

Your state government, and many large city government agencies will have comparable web sites up and running soon, if they do not have them already, listing the same sort of information about contracts, loans and grants in your local area. Good luck, and good hunting!

Obama Signs Stimulus Law

Today, February 17, 2009, President Obama signed the American Recovery and Reinvestment Act into law at a ceremony at the Denver Museum of Nature and Science. The economic stimulus law is the largest public spending in this country since World War II.

Appropriations in the legislation include a total of over $149.8 billion in funding for various construction projects by federal, state and local government agencies. As finally passed by Congress and signed by President Obama, the bill made a few significant changes from earlier versions passed separately by the House and Senate. Provisions specifically appropriating $20 billion for elementary school, high school and college construction projects were dropped from the law, though states are permitted to use education program funds provided elsewhere in the legislation for modernization of existing school buildings if they choose to do so. Given the threat of program cutbacks and teacher layoffs in so many public school districts, however, such use of these other monies seems unlikely.

The "use it or lose it" clawback provisions in the earlier versions of the legislation were softened in the final law, which now requires half the funds to be appropriated within 120 days, and the other half appropriated within one year, in recognition of the seasonal nature of much construction and the inability of the industry to absorb half the cash by the end of 2009.

The final law as signed by the President also includes three tax provisions important to construction industry businesses, including delaying the effectiveness of the new 3% withholding tax on construction project payouts until 2011, extension of the tax loss carry back period for up to five years for businesses with less than $15 million in annual revenue, and deferral of the recognition of income from discharge and renegotiation of business debts until 2014.

Key dates for government agencies and contractors under the new law are June 17, 2009, when half the money appropriated for state governments must be obligated under contract, and February 17, 2010, when all of the funds must be obligated.

What Do You Want To Know About The Stimulus Bill?

When President Obama signs the legislation, expected to happen on Tuesday in Colorado, the American Recovery and Reinvestment Act clock begins ticking. The bill imposes time limits on awarding contracts for the construction projects it will fund, and for spending the money to complete them. These time limits seek to insure that the economic impact of this spending is strong and quick, but no one knows for certain whether either the government bureaucracies or the American construction industry have the capacity to actually perform according to this time schedule.

In a very small way, I am trying to help in this effort by explaining the provisions of this law, over 1,000 pages long, to the people in the construction industry who will have to operate according to its provisions, and who can benefit from these appropriations. You can preview my slide presentation on the new law here:

http://www.linkedin.com/profile?viewProfile=&key=37888633&locale=en_US&trk=tab_pro

If you have a professional organization, or a group of ten or more people from your own business, who would like to hear my presentation, feel free to call or E-mail me to set up meeting. The new law gives preference to projects where the contract can be awarded within the next four months, and requires that the funds be committed within the next six months, so time is of the essence.

If you want to read the bill, and the accompanying conference reports on how the appropriation provisions and the tax provisions of the bill resolve the differences between the House and Senate versions of this important legislation, there is a link at the lower right hand corner of the front page of my website which will take you directly to the government printing office text:

http://james-g-mcconnell.com/

If you would like to arrange an in person presentation of this material, with time for questions and answers afterward, feel free to call or E-mail me to make arrangements.

American Recovery And Reinvestment Act Passes

By a vote in the House of 246-183, and in the Senate of 60-38, Congress has passed President Obama's economic stimulus legislation. Obama was watching on C-Span at his Hyde Park home as the Senator from Ohio returned to Washington, D.C. following his mother's wake to cast the deciding vote on the Senate floor at 10:47 p.m. Washington time.

The bill will be promptly enrolled, and delivered to President Obama, who is expected to sign it Tuesday in Colorado. His pen on the paper will begin the clock ticking on all the time limitations in the measure for awarding of construction contracts and expenditure of funds appropriated in the bill. The construction industry will be receiving contracts worth over $145.6 billion funded by this legislation, which the provisions of the bill require to be completed and paid for within two years.

President Obama also signed an executive order Friday encouraging federal agencies which will be spending this money to use project labor agreements on the major projects funded by the bill, favoring union contractors on those projects. The legislation also requires all contractors building any projects funded by the measure to pay Davis Bacon prevailing wages, to hire only citizens and aliens here legally to work on the projects, and to buy American steel and manufactured goods for use on these jobs.

Every estimator who has been paying attention is going to be unusually busy for the next five months or so putting sealed envelopes into the hands of federal, state and local contracting officers all over the country. Good luck to you all.

Stimulus Bill Text And Conference Reports

The entire text of the H R 1 as revised by the conference committee, and the accompanying reports on the appropriations and taxation measures in the bill are available by following this link. The House passed the bill earlier and the Senate vote is expected late Friday afternoon.

Link:

here

House Passes Final Stimulus Bill

On a strict party line vote of 246 yeas and 183 nays, the House of Representatives passed the conference committee version of the American Recovery and Reinvestment Act Friday afternoon, with no Republican members voting in favor of the legislation, and despite the fact that the tax titles of the conference committee version are still not available for review by Congressmen. The House Rules Committee website does have up the appropriations titles and the conference committee explanatory statement of both the appropriations and taxation revisions made in conference.

School Modernization Funding Restored In Part

At the urging of House Democrats, the Conference Committee has restored funding of $6 billion for school modernization and repairs to the total $789.5 billion cost of the American Recovery and Reconstruction Act, slated to be voted on in the House tomorrow and in the Senate Friday, and likely to be signed by President Obama as soon as the bill can be enrolled and delivered to the Oval Office. Total appropriation for construction projects of all sorts is $145,632,000,000.00.

The cost figure was held in large part by cutting President Obama's middle class tax cut from $500 per individual or $1,000 per family down to $400 per individual and $800 per family. Other tax measure reductions include elimination of the deductibility of car loan interest, and restrictions on availability of the home purchase tax credit and business loss tax carry backs.

The airwaves will undoubtedly be filled to overflowing for the next two days with analysis and commentary respecting the details of this legislative measure, as well as steamy political rhetoric from the extremes of both parties regarding what they had to give up to get a bill which can pass both houses of Congress. Economists of various stripes will debate ad nauseam whether or not this particular formulation of spending and tax relief will reinvigorate the American economy.

To me, passage of the bill will mean at least this: there is a profit opportunity of $7.25 billion or more out there for businesses in the construction industry which position themselves to take advantage of it.

Construction Stimulus Totals $145.632 Billion

The conferees have agreed on a breakdown of the American Recovery and Reinvestment Act, to be voted on Thursday in the House and Friday in the Senate, including total appropriations of $145,632,000,000 for construction projects.

Stimulus Top Line Now $789.5 Billion

The Conference Committee has reached agreement on the overall price of the stimulus legislation at $789.5 billion, with details remaining to be hashed out. The bill is expected on the House floor Thursday and the Senate floor Friday.

Stimulus Bill Goes To Conference

Tuesday afternoon, February 10, the Senate passed the Nelson-Collins version of the American Recovery and Reinvestment Act by a vote of 61-37. As expected, Senators Collins, Snowe and Specter crossed the aisle to support the measure. The Congressional Budget Office prices the Senate version at $838.2 billion, somewhat more than both the House version costs, at $819 billion, and the cap Collins, Snowe and Specter say they will accept in a final bill, at $800 billion.

House and Senate conferees to be named will meet as soon as possible in efforts to hammer out the differences between the two versions of this legislation, in hopes of presenting an agreed bill on the floor of both houses Friday for a final vote, before the recess scheduled to begin Saturday.

The most contentious issues to be faced by the conference committee are:

SPENDING:

School construction funds of $20.1 billion, completely gutted in the Senate.

State fiscal stabilization appropriations which the Senate cut severely.

TAXES

Alternative Minimum tax patch added by the Senate.

Full repeal of the 3% tax on government contractors.

The Senate added "golf cart" tax credit.

OTHER

E-verify requirement.

H-1B visa ban for TARP recipients.

Buy American requirements.

Broadband open access requirements.

Senate Majority Leader Harry Reid and House Majority Leader Steny Hoyer have both promised to keep Congress in session until a bill is sent over to the Oval Office for signature. Meanwhile, President Obama takes Air Force One from one economically depressed community to another, stumping in support of quick passage of the package.

If you are interested in perusing the text of the 778 page Senate version of this legislation, you can find a link to it at the lower right hand corner of the front page of my website:
James G. McConnell - Home.

Nobody Is Talking About This

What happened behind the closed doors of that Senate caucus room last week to provoke three particular, desperately needed Republican Senators to cross the aisle and pledge their votes in favor of the Nelson-Collins compromise version of the Senate's stimulus bill? Buried deep in the middle of the measure, under Title VI, Homeland Security, is a $450 million appropriation for construction of land side facilities in support of a new Coast Guard icebreaker. The legislation does not specify, but I'm willing to wager dollars to doughnuts that this new seaport will be built somewhere along the rocky coast of Maine [Senators Collins and Snowe], and though there is nothing in this bill for construction of the icebreaker vessel itself, my money says it will be built in the Philadelphia shipyard [Senator Specter]. So much for President Obama's "no earmarks" pledge.

As for the ultimate outcome of politics as the art of the possible, we will have to await the conference committee version of the bill later this week, but it seems certain that no matter what other tweaking the conferees may do to the particulars of the measure, the Coast Guard is going to be getting a new icebreaker based in Maine.

If you are interested in the changes made to the House version of the appropriations by the Nelson-Collins compromise, this link will take you to Senator Nelson's detailed spreadsheet: http://bennelson.senate.gov/documents/Nelson-Collins Stimulus Final.xls

Senate Explores Stimulus Compromise

After three days of floor debate on 568 proposed amendments to HR 1, the House version of the American Recovery and Reinvestment Act, it appears Senate leaders have the 60 votes required to pass their compromise version, now known as the Nelson - Collins amendment. Senate debate continued Saturday, February 7, and will resume Monday, February 9, with a Senate floor vote expected late Tuesday evening. The 58 Democratic Senators are expected to be joined by Republicans Susan Collins of Maine, Olympia Snowe of Maine, and Arlen Specter of Pennsylvania expected to vote in favor of terminating debate, and of passing the measure. The Senate and House versions will then go to a Conference Committee, and the Conference Committee version will go back for floor votes in both houses before being sent to the Oval Office for signature.

The Nelson - Collins compromise cuts total cost of the measure from the $819 billion in the House version down to $780 billion. Construction appropriations in the Nelson - Collins amendment have been cut from the $153.3 billion voted by the House, down to $126.7 billion.

The Nelson - Collins construction appropriations reduce cash for state and local government construction by $25.28 billion, increase construction funds to federal agencies by $11.51 billion, and cut power grid construction funding by $12.9 billion, making up the net construction appropriation reduction of $26.67 billion. Of course, some, all or more may yet be added back in the conference committee version.

Construction categories increased by the Nelson - Collins compromise include agriculture, up $0.66 billion, defense up $5.15 billion, highways and surface transportation up $2.56 billion, passenger rail up $7.50 billion for high speed rail corridor construction, and a new category of "emergency preparedness" construction adding $2.04 billion for FEMA and the Coast Guard.

Construction appropriation cuts in the Nelson - Collins amendment include airport construction down $1.90 billion, general federal buildings down $0.02 billion, federal health construction down $0.39 billion, local transit construction down $0.50 billion, power grid construction down $12.9 billion, public housing construction down $5.94 billion, school and college construction eliminated entirely for a cut of $20.10 billion, and water and environmental construction down $2.83 billion.

There could be a surprise or two still down the road, but right now these numbers look pretty solid, and the measure seems to be still on track for passage before the President's Day recess. The good news is there is room for almost all of the construction appropriation cuts to be restored in conference without busting the $800 billion ceiling which it seems Senate psychology has put on the total cost of this measure.

Senate Debates Stimulus - House Prepares For Conference

While floor debate on President Obama's economic stimulus measure proceeds amendment by amendment in the Senate, House Majority Leader Steny Hoyer announced today that the House will be in session Monday to begin work on a joint House/Senate Conference Committee version of the legislation. Speaker Pelosi says the bill is still on track to reach the Oval Office before Valentine's Day.

Senators Ben Nelson of Nebraska and Susan Collins of Maine will be offering a bipartisan amendment aimed at stripping non-stimulative appropriations out of the spending side of the bill, such as Interior Department and Agriculture Department new computers, along with funds for HIV screening, wildlife management and NASA. As it stood late Wednesday afternoon February 3, the cost of the Senate version of the measure exceeded $900 billion. The major additions approved thus far have been an $11 billion tax credit for car purchasers, and $6.5 billion for National Institutes of Health research projects.

Senators Patty Murray and Diane Feinstein are preparing another attempt to increase spending for construction by $13 billion for highways, $7 billion for water and sewer construction, and $5 billion for transit construction, to be offset by cuts in other programs.

Senator Charles Schumer wants an even bigger increase for transit funding, of $6.5 billion rather than the $5 billion Feinstein and Murray will propose.

Domestic steel mills are fighting to keep the "buy American" requirements for construction steel in the measure, while other interest are assuring trading partners the protectionist requirements will not exceed those already in existence in general Congressional appropriation measures.

Senator Johnny Isakson of Georgia will offer a proposal to double the home buyer tax credit from $7,500 up to $15,000, and remove the restriction to first time buyers, at a cost of $20 billion.

President Obama, at a White House meeting Wednesday afternoon, urged key Senators not to "make the perfect the enemy of the essential" in finalizing the measure, and remarked that the recession will turn into "a catastrophe" if legislation is not on his desk before Presidents' Day.

Senate Rejects Infrastructure Increases

By a vote of 59 to 39 during the floor debate, the Senate this afternoon rejected a proposed amendment to the economic stimulus bill which would have added $25 billion in infrastructure appropriations. The amendment, offered by Senator Patty Murray of Washington, would have added $13 billion for highway construction, $5 billion for transit construction, and $7 billion for EPA water and sewer construction projects. It also would have increased the total cost of the measure to $1.1 trillion. According to House Majority Leader Steny Hoyer, the goal is to keep the price of stimulus under $900 billion.

Hoyer also suggested that when the measure goes to a Conference Committee, the Senate's strong "buy American" language may be cut back to match the House provision limiting the restriction to steel used in construction projects. Foreign trading partner nations that purchase a lot of U. S. exports are already threatening retaliatory legislation against American made exports should the bill become law with the stronger Senate protectionist provisions.

Another floor battle is brewing as immigrant advocates press for the Senate to remove the House provision requiring businesses awarded contracts paid for by these appropriations to use the federal E-verify system to eliminate illegal immigrants from their work forces. Representative Jack Kingston of Georgia, who sponsored the E-verify requirement in the House measure, said: "We cannot allow for illegal aliens to benefit from this deficit spending. The American taxpayer will one day be forced to pay it back so it should be them that benefit."

Two other controversial amendments still being debated would temporarily reduce the corporate tax rate on repatriated foreign earnings from 35% to 5.25%, in hopes of spurring investment of these earnings in American jobs and investment; and grant an above the line tax deduction for interest on new car loans up to $49,500 for families earning under a quarter million dollars a year, in hopes of spurring new car sales.

General Public Closed Off From Stimulus Debate

In typical Washington fashion, the last version of the stimulus legislation available to the general public is H.R. 1 passed by the House last month. Although three different Senate committees have debated the legislation, and two have voted on proposed amendments to it, the bill is being debated on the Senate floor without any text of the legislation under consideration being available to the public. And Senate Minority Leader Mitch McConnell is busy discussing his "alternative" proposals without having released any text of amendments he may propose, or revealing his floor strategy to anyone.

Should the Senate pass its version of this legislation, the bill will go to a House-Senate Conference Committee, and once the differences between the two versions are resolved, both the Senate and the House will vote the final version of the bill up or down. Your representatives in Congress will be lucky if they see the text of the bill 24 hours before they cast their votes, and the likelihood is that it won't be available at all to the general public until a few days after it is signed by President Obama. So much for transparency and accountability in government.

The truth is that even if you were to keep your eyes glued to C-Span throughout the Senate debate on this legislation, you won't know what it includes until after it is passed and signed into law. Even in this age of computers and instantaneous communication via the internet, it is quite likely that the text of the legislation as passed will not be seen by anyone outside Washington until days after President Obama signs it. And even then it will be weeks more before the actual construction projects to be funded by these appropriations begin to be posted in the Recovery.gov website for the general public to peruse.

We do understand that the current price tag on the Senate's version of the legislation is $888 billion, and that various Senators will likely propose amendments to increase spending on highways by another $27 billion, schools and colleges by $20 billion, and broadband expansion by $9 billion. This could push the construction industry's share of the appropriations as high as $209 billion from the $153.3 billion in the House version.

Infrastructure Stimulus Appropriations Likely To Increase

The Sunday interview shows were populated by Senate leaders from both sides of the aisle, talking about the stimulus legislation coming to the floor the first week in February. Republican and Democratic leaders don't agree on much, except that infrastructure spending in the bill needs to be increased. It's difficult to predict what other changes we may see in the legislation on the Senate floor or in the Conference Committee, except that tax cuts will also likely change in form and increase in overall amount.

It looks at the present moment like the final package may include as much as $200 billion for the construction industry over the two years provided for in the legislation. There is little doubt that the industry can absorb this much activity in two years' time, the real question is whether federal, state and local bureaucracies can handle the work in such a short time. Besides positioning themselves to bid promptly and responsively on this much work, businesses in the construction industry need to do everything they can to assist the politicians and bureaucrats with the paperwork required to move so much money through the pipelines promptly. And union hiring halls need to gear up for an unprecedented demand for building trades workers.

All workers hired for these projects will have to be screened through the federal E-verify system for checking a worker's legal right to be employed in this country. Some of these projects will be on military bases and other government installations where security regulations will also mean drug testing and criminal background checks, even if union/employer labor agreements do not already call for such checking in a particular trade.

If your business is seeking to participate in this bonanza of government spending, it needs to get ready now to be in a position to promptly, effectively and smoothly comply with all the paperwork requirements which will be imposed before payment will forthcoming on these projects.