It has been over three months since President Obama signed into law the American Recovery and Reinvestment Act (“Recovery Act”), a $789.2 billion stimulus package intended to rescue the nation’s struggling economy. With a focus on quick job creation, the Recovery Act authorized more than $460 billion in spending. Approximately $160 billion of that stimulus spending is allocated to a wide range of infrastructure projects that directly benefit the construction industry. Although the majority of Recovery Act spending will not occur until after 2009, two Recovery Act infrastructure projects are creating opportunities for private construction businesses this year.
Highway Infrastructure Investment
Title XII under Division A of the Recovery Act provides funding for highway infrastructure projects. Specifically, the provision adds an additional $27.5 billion in funding restoration, repair, construction, rail transportation and port infrastructure under 23 U.S.C. §§ 601(a)(8), 133(b). The funds, which remain available through 2010, are distributed to states through a formula allocation administered by the Federal Highway Administration. In order to prevent redistribution of allocated funds, states are required to obligate more than 50 percent of the Highway Infrastructure Investment funds by June 19, 2009.
The first funds under this provision were released on March 3, 2009, when $26.6 billion of Highway Infrastructure Investment funding was released to the various states. This wave immediately led to new contracts when the Maryland State Highway Administration contracted with a private company for $2.1 million to resurface Maryland Highway 650 on the same day of the funding release. Other states were quick to follow in subsequent weeks. By May 29, 2009, $14.8 billion had been obligated to more than 5,000 highway projects nationwide.
As an example of how one state has taken advantage of these stimulus funds, the state of Georgia was allocated over $930 million under the Highway Infrastructure Investment provision. A large portion of these funds has been directed to areas at both extremes of population density—both the metropolitan planning organizations for large urbanized areas and areas where the population is less than 5,000—which will collectively receive $279 million. An additional $28 million is being allocated specifically to transportation enhancement projects. Finally, a general fund of $624 million has been established for highway and infrastructure projects anywhere in the state.
After receiving over 2,500 funding requests for local projects, the Georgia State Transportation Board approved a list of 135 eligible projects on March 19, 2009. By May 5, 2009, Governor Perdue had certified over 100 Recovery Act funded highway investment projects totaling approximately $390 million. Bidding for the Georgia Recovery Act highway investment projects began in May, and will continue throughout the summer months. According to the Georgia Department of Transportation, additional projects will be certified through 2010.
Thus far, the major certified projects in Georgia include: please see table.
Federal Buildings Fund
Title V of the Recovery Act provides an additional $5.55 billion to the Federal Buildings Funds to convert General Service Administration facilities to high-performance green buildings and renovate land ports of entry and courthouses. Of the $5.55 billion, $750 million is being allocated to renovate and construct federal buildings and courthouses, $300 million is being allocated to renovate and construct land ports of entry and $4.5 billion is being allocated to convert federal buildings to high-performance green buildings. All funds must be obligated by September 30, 2011.
On March 31, 2009, the General Service Administration submitted to Congress a list of projects selected to receive Recovery Act funding. The project list includes hundreds of projects in all 50 states. Pending congressional approval, the General Service Administration will spend over $6 million on green building conversion to the following five federal buildings in Georgia: please see table.
Taking Advantage of the Recovery Act
Through the Recovery Act, the federal government is providing an unprecedented opportunity for nearly every private company engaged in the construction industry: steady work and assured liquidity in a time of economic distress. In order to reap the benefits of over $460 billion in new federal spending, businesses must begin properly positioning themselves today—not only anticipating the compliance obligations that will be bundled with the spending, but the likely increasing challenges facing actual and potential contractors, from an uptick in protests arising out of hastily awarded contracts to increased oversight obligations to ensure spending meets anticipated goals.
Federal stimulus opportunities can be monitored on www.grants.gov and www.fedbizopps.gov. State opportunities can be monitored on state recovery web pages that can be accessed at http://www.recovery.gov/?q=content/state-local-tribal-and-territorial-resources