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Stimulus Plan Offers Plenty of Construction Work, Despite Heightened Emphasis on Tax Cuts

L. Robert Kimball & Associates President and CEO Jeff Kimball says that the American Recovery and ...

March 12, 2009

L. Robert Kimball & Associates President and CEO Jeff Kimball says that the American Recovery and Reinvestment Act will be a major boost to the engineering and construction industries, despite the final legislation's shift to provide a greater proportion of stimulus in the form of tax cuts.

The Kimball organization, one of America's leading providers of architecture, engineering and technology services, analyzed the stimulus plan and expects it to revitalize both industries and communities, with a clear emphasis on green building techniques and facilities.

"Even though more of the plan's dollars than originally anticipated have shifted to tax cuts, the construction portion holds plenty of opportunity for employment and business recovery," Jeff Kimball said. "Opportunities for construction abound in the new stimulus program. The majority of the funding focuses on building and refurbishing federal facilities in communities across the nation, with a strong preference for work that incorporates green building principles. Individuals in the construction industry should be working to gear up for the re-engineering of America."

Roughly $288 billion of the $787 billion program goes for tax relief and $144 billion is targeted for state and local fiscal relief, while $111 billion goes to infrastructure and science and $43 billion goes to energy.

Transportation Benefits

Kimball's analysis indicates transportation will be one of the major beneficiaries of stimulus funds, with $27.5 billion for highways and bridges, a $1.5 billion discretionary fund allocated by the Secretary of Transportation, $8 billion for high-speed rail and $6.9 billion for transit assistance to communities, among other provisions.

The Environmental Protection Agency is allocated $7.2 billion for projects that include superfund cleanup dollars and underground storage tank remediation, as well as clean-water programs and state assistance grants for brownfields.

The Defense Department will be a principal recipient of construction funding, with $6.2 billion for construction, sustainment, restoration and modernization of facilities, along with $300 million for improved energy efficiency and $400 million for Defense health-program facilities. A total of $4.6 billion will go to the Army Corps of Engineers, including $2 billion for environmental infrastructure construction and $375 million for upgrading the Mississippi River corridor.

The extension of broadband technology to rural areas will be largely controlled through the National Telecommunications and Information Administration (NTIA), which will disburse $4.7 billion in competitive funding, Kimball's analysis showed. Other federal agencies directly controlling grants include the Department of Justice, for programs to put more police officers on the streets of American cities, and the Federal Emergency Management Agency (FEMA).

"Congress has indicated that full and open competition should be inherent in the awarding of contracts for federal projects, but preference is given to those projects that are virtually ready to go," Jeff Kimball noted. "This contradiction has yet to be resolved, but Congress has eased the 'use it or lose it' provisions by only 'strongly encouraging' agencies to spend half their funds in the first 120 days and requiring a Sept. 30, 2010, deadline to get funds committed, while allowing many exceptions to extend deadlines."

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