American Recovery Act – A Long-Term Shift in Business Opportunity


While the the American Recovery and Reinvestment Act has sparked both discussion and controversy, one thing seems to be clear:  a whole new world of opportunity has opened up for many American businesses.  Of the $787 billion stimulus package, approximately $575 billion is assigned for spending projects. 

While the goal of the Act is an immediate stimulation of the economy, we believe this will not be a short-term aberration, but rather a longer-term shift in business opportunity with regards to government-involved funding.  Here’s why:

MAGNITUDE
The sheer magnitude of this stimulus package is unprecedented.  While the distribution of this money will go through existing agencies, the agencies’ infrastructure are not prepared to handle the volume.  Like “immediate” funding of projects following September 11, 2001, expect deadlines to be extended in order to handle the logistics.

OVERSIGHT
It appears the Administration is serious about placing significant oversight requirements on those spending the money and the vendors who provide needed goods and services (for example, the Obama Administration issued rules barring lobbyists from conversations or meetings with federal officials about specific stimulus projects).  While details are being worked out, it appears reporting and tracking will be significant at multiple levels, causing a bottleneck in the process.

PHILOSOPHY
Whichever side of the aisle you’re on politically, it is pretty evident that the adminstration has strong tendencies toward a government-led economy, particularly in the current recessionary environment.  In our view, the stimulus package is a glimpse into longer-term policy, and a method for driving social change.

As a result, businesses would do well to plan strategically for this shift in business opportunity.  Understanding how to identify and align its business to grant funding and various agency needs could open the door to significant growth if implemented correctly.

-Lorin Bristow

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