Obama promises 600,000 new jobs from stimulus spending
Only $37 billion of the $787 billion has been spent so far. Confusing provisions and the sheer size of the bill have created delays.
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The “Buy America” provisions in the legislation are causing delays, as well. Contractors must obtain certification that most of a piece of permanently installed equipment was made in the US.Skip to next paragraph
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“When contractors are unable to obtain from the manufacturers that certification on a timely basis, it can lead to a delay in awarding a contract,” says Ken Simonson, chief economist for the Associated General Contractors of America (AGC).
That’s certainly the case for Michael Welch, one of seven contractors that AGC brought together Friday to discuss the impact of the federal stimulus package.
Mr. Welch's company, BRB Contractors of Topeka, Kan., won a contract and sought to buy a $2 million piece of equipment made in Austria. Only one US company made a similar item, and it cost 30 percent more.
“We’re having problems getting anyone up the line of command to make a decision if it’s OK for us to buy [the Austrian-made product],” he says.
For their part, states and communities have been slow to hand out contracts to complex jobs, given the paperwork involved, says Mr. Simonson of AGC.
“The more complex the documentation for the bid, the more time it takes to award a contract,” he says. “As summer goes by, we’ll see more bid letting, and some contractors will have a chance to respond to different projects.”
The funds that have been flowing through to states have mostly been “shovel-ready” projects, such as paving projects or some form of road construction.
Pike Industries in Walpole, N.H., for example, reported that it has hired or will hire 120 people as a result of the stimulus package. The company is working on eight paving projects in New England, says Christian Zimmermann, president of Pike Industries.
Last August, Pike was planning to lay off 150 people. “So, the stimulus spending is a swing of 250 employees for Pike, or about 25 percent of our workforce,” says Mr. Zimmermann. “The stimulus has been very good for us.”
Spending on such projects goes well beyond the main contractor. BRB Contractors won a $13 million wastewater contract in Overland, Kan. It was eventually awarded $8 million in stimulus funds. BRB's Welch was able to save 40 jobs at his own firm and many more in the community, he estimates.
“First of all, we will be hiring local suppliers ... who will have to retain or hire more employees as a result of our employment,” says Welch. “We will also purchase process equipment or other materials from all over the United States from 15 or 20 companies.”