Commerce department agrees stimulus deserves middling grades on transparency and effectiveness

Peter Buxbaum Contributor
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The inspector general of the U.S. Department of Commerce (DOC) and a member of the Recovery Accountability and Transparency Board agreed with the less-than-stellar grades given the federal government’s performance by the Reinvestment and Recovery Act by Input, a government market research firm.

At a presentation before an industry group in Washington on Thursday, DOC Inspector General Todd Zinser agreed that the grades given by Input’s Kevin Plexico were “fair.”

Input gave the American Recovery and Reinvestment Act (ARRA) an Incomplete for jobs creation, a C for transparency, a B- for contracting effectiveness and a B for speed of spending.

The Recovery Accountability and Transparency (RAT) Board is made up of 12 federal department inspectors general and was created to coordinate oversight and policy on how the $787 billion stimulus is spent.

At the macro level, according to Input research, only $333 billion of the stimulus funds have been obligated to date and $179 billion have been disbursed.

The speed of spending has varied from one agency to the next. The Departments of Health and Human Services and Labor have successfully disbursed most of their funds.

“Most of those finds covered increased Medicaid and unemployment compensation,” said Plexico. “Those were able to flow out to the economy quickly.”

On the other hand, the Departments of State, Transportation, and Housing and Urban Developments, as well as NASA, have obligated less than 30 percent of their stimulus funds. “Those agencies are handling larger and more complex projects,” Plexico noted.

Transparency under ARRA received a poor grade because of discrepancies in reporting by grantee agencies and because of snafus involving the government website,, that takes these reports online.

More than 134,000 reports have been filed thus far, said Plexico. Of these, more than 17,000 reports were late while 4,300 grant recipients have not filed at all.

At the moment, there is little authorities can do to compel non-reporting entities to comply, Zinser noted. The RAT Board is considering imposing sanctions on errant grantees but he doubted whether it would decide to cut off their funding.

“Once someone gets a grant there is very little political willpower to take that grant away,” he said.

Some federal agencies, such as the Federal Highway Commission, have the authority to do just that, according to Zinser. “But that never happened in the 16 years I was at the Department of Transportation,” he said.

Contracting effectiveness refers to the performance of the stimulus program in promoting contract competition and enhancing efficiency by demanding fixed-price contracts. “A little over 50 percent of the contracts are fixed price,” said Plexico. The government has exaggerated the number of contracts awarded after full and open competitions, he added.

“I don’t have anything to dispute the B- in contract effectiveness,” said Zinser. “There is a shortage of contract management talent in the federal government and contracts often take a long time to complete.”

Job creation received an Incomplete for the lack of reliable data to develop a reasonable estimate. The president’s Council of Economic Advisers at the beginning of the stimulus process produced a formula on the number of jobs that would be created at specific levels of funding.

“The grant recipients were supposed to report the numbers of jobs created with their dollars,” said Plexico. “But if they were unable to do that, they could simply rely on the formula. Not surprisingly, much of the jobs data simply conforms to the original assumptions.”

Guidelines on jobs creation released by the Office of Management and Budget have changed, noted Zinser, but the criteria provided on have remained the same.

Some of the jobs known to have been created through stimulus funding were temporary, Plexico noted. One of the largest contracts to be let under the stimulus — to Teletech, to operate a help desk to advise consumers on the switch from analog to digital TV broadcasting — has since expired, and the jobs it created have gone away.