2009 Federal Stimulus Act: Opportunities and Risks
Not since World War II has the federal government sought to spend so much money in so little time, with such a sense of urgency. The American Recovery and Reinvestment Act of 2009 (the “Recovery Act” or the “Act”) presents tremendous opportunities for companies involved in infrastructure, including engineering, construction and supply contractors. At the same time, the sprawling Act includes many specific requirements and compliance risks that companies need to understand. There are also many downstream oversight and enforcement risks associated with the funds provided by the Recovery Act. We have identified and summarized the most important opportunities and risks.
Section I: Opportunities
Section I is a table that provides a summary of the principal sections of the Act that provide funding for infrastructure and construction projects. We identify the amounts available, the method by which the funds are to be disseminated and the purposes for which the funds are intended. This table is intended as a useful guide to the Act, not an exhaustive summary.
Section II: Restrictions and Compliance Issues
Section II identifies and analyzes provisions in the Act that restrict uses of the funds, including the controversial Buy American provision, award preferences and environmental requirements. We also identify several compliance issues, including reporting requirements, and compliance program and mandatory disclosure provisions imposed by the Federal Acquisition Regulation.
Section III: Oversight and Enforcement Risks
Section III identifies and summarizes the risks that companies will face downstream after projects are awarded. These risks include inspector general audits, oversight by the newly constituted Recovery Accountability and Transparency Board, potential antitrust actions, lawsuits alleging fraud under the False Claims Act and congressional oversight and investigations.