Impact of the Stimulus Bill on Federal Contractors

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Impact of the Stimulus Bill on Federal ContractorsBrian M. HaneySenior Vice PresidentINPUTApril 20, 2023

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CR?

Administration Transition & Budget Cycle

2

Agency/ President Prep

Congressional Review/Approval

Agency/ President Prep



CR

Agency/ Pres Prep

Source: INPUT

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Leadership Turnover & Human Capital

3

Agencies Most Impacted by Leadership Losses

4.2%

1.1%

3.8%

1.8%

5.2%

.8%

2.9%

Source: OMB, EEOC, INPUT

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Peak:1998-2003

11.9%

INPUT Fcst:2008-2013

3.9%

Federal IT Budget, 1989 – 2013

Source: OMB, INPUT

Low:2006-2011

2.9%

Note: Figures include Defense and Civilian Exec Agencies Only for comparison purposes

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Federal IT Industry Forecast, 2008-2013

5

Source: INPUT

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Stimulus -- What Is It?

6

Source: American Recovery and Reinvestment Act Summary (created using Wordle.net)

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Economic Crisis Recovery in Perspective

Source: OMB, INPUT* Reflects 2009 Budget Request

819-900

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Deficit Spending at 50 Year High

8

2009 Deficit Forecast = $1.6 Trillion (11% of GDP)Most Since World War II

2009 Deficit Forecast = $1.6 Trillion (11% of GDP)Most Since World War II

Source: OMB, INPUT

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Discretionary Spending

$308.0 billion

Direct Spending

$198.0 billion

Components of Economic Stimulus Plan

0.0 200.0 400.0 600.0 800.0 1000.0

In Billions

Tax Cuts

$280.8 billion

Source: H1 Conference Report and Congressional Budget Office

= $786.8 billion

Tax cuts to individuals

Direct spending to individuals

Discretionary spending primarily to governments

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Summary of American Recovery and Reinvestment Act of 2009

Full appropriations total $786.8 billion• $506 billion in discretionary and direct payments

• $281 billion in tax relief for individuals and businesses

Provides funding for technology, science and research, infrastructure improvements, education, energy, healthcare, and training• Funding distributed through new and existing programs

• Many programs to be implemented by states with grant funds

High level of transparency

Quick turnaround• Spending plans within 30-120 days of enactment

• Goal of using 50% of funds for activities that start within 120 days

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Distribution of Funds ($B)

11

Source: Recovery.gov

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Spending Will Occur in Several Areas

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Another $55+ Billion in technology spending is “buried” in other line items

Breakout of $308B in discretionaryspending

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Timeline of Spending

13

Estimated Costs of ARRA by Year, FY2009-FY2019

Source: CBO, INPUT

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Technology Opportunities

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The IT Markets

15

Nearly $67 billion in new technology spending (even before coverage expansion which is majority of ARRA spending)

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Funding Breakdown by Department

16

AF

Census TSA

CBP

ICE

CG

HQ

*Dollars in billions

Army

MC

Navy

NIST

NOAA

FAA EERE

OE

IHS

HRSA

NIH

ONC

BLM

FWS

NPS

USGS

BIA

ETA

OJC

AFARuralUtil.

FSA

VHA

FSA

Admin

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Homeland Security

17

Checked baggage explosives detection systems and checkpoint explosives detection equipment

$20MICE

Non-intrusive detection systems ($100M)Tactical communications equipment/radios ($60M)Border Security fencing, infrastructure and technology ($100M)Construction of land border ports of entry ($420M)

DHS HQ Consolidation - construction, site security, IT infrastructure, fixtures, and related costs

Tactical communications equipment and radios

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Social Security Administration

18

Processing disability and retirement workloads

Includes IT acquisitions and research support

$40M

Replacement of the National Computer Center and the associated IT costs

Health IT for the adoption of electronic medical records in disability claims

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Facilities Modernization at DoD

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Facilities modernization and energy efficiency investments

($3.9B) ($1.1B)

Child development centers and warrior transition complexes($230M) ($230M)

Family Housing (including O&M)($39.6M) ($96.6M)

($712M)

($280M) Included w/Navy

($154M)

N/A N/A

Marine Corp

$154M

Research, Development, Testing and Evaluation (RDT&E) ($3.9B) ($1.1B) ($712M) ($154M)($75M)

($400M – medical facilities)

($400M) Hospital construction

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Energy & State Departments

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Increase the efficiency of information and communications technology and improve standards

Modernize the electric gridEnhance security and reliability Energy storage

Consolidated security training facilityExpand passport agenciesIT security upgradesEstablish back-up information management facilities

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Health & Human Services

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Health IT – tele-health services development and related infrastructure requirements($85M)Facilities construction, maintenance, improvements, equipment($415M)

Health ITModernization of non-Federal research facilities and NIH facilities on Bethesda, MD campus

Construction, renovation and equipment for health centers Health IT systems for health centers

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GSA & Veterans Affairs

22

Energy efficiency projects for federal buildingsConstruction of border stations and land ports ofentry

Maintenance and energy efficiency projects at medical facilities

IT systems

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Agriculture & NTIA

23

Modernization of IT systems

Broadband deployment in underserved areasBroadband inventory map ($300M)

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Contracting Stipulations

Requires use of the FAR

To “maximum extent possible”, federal agencies must use• Competitive procedures

• Fixed-price contracts

• If other approach is used, it must be posted with explanation to Recovery.gov

Agencies can use existing contracts to execute plans

Priority given to programs that:• Can be obligated/executed quickly

• Will result in high, immediate employment;

• Have little schedule risk

• Will be executed by contract or direct hire of temporary labor

• Will complete a project phase or project

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Oversight & Transparency

Establishes Recovery Accountability & Transparency Board

Establishes Recovery.gov as transparency site

Recipients (including contractors) must provide quarterly reports

• Total amounts received and amounts obligated/expended

• List of all projects/activities on which funds have been obligated/expended

• Project name, description, completion status,

• Estimate of number of jobs created, and

• Detailed info on subcontracts

Extensive funds provided to IGs to support oversight

GAO has authority to examine the records or interview employees of contractor/subcontractors who receive funds

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INPUT’s Take

More opportunities will be embedded within larger mandates

Requirement to act quickly could take resources away from existing work

Look for utilization of existing task order vehicles to expedite awards

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Recommendations

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Be prepared to act quickly – many of the program require plans and/or project start within 30-120 days

Revisit your portfolio to identify complete solutions that simplify acquisitions• Energy audits and energy monitoring technologies

• Electronic health records and IT security

Infrastructure providers - Look for construction projects which create new “centers” or establish new offices

Consider partnerships with state and local contractors• Many opportunities funded through S&L grants

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Recommendations

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Vendors should focus on funding sources which already exist• Much of the funding (other than construction) targets existing programs

and augments previous legislation

Keep your nose clean – extensive oversight and reporting requirements

Don’t let exuberance and desire for growth overcome common sense

Impact of the Stimulus Bill on Federal Contractors

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