The graph below from the GAO illustrates an expected 6% of the total $787 billion will be disbursed in 2009 and 14% in 2010. Barring deadline extensions (which will happen), funds will be disbursed through 2016.
Also interesting is the change in composition of expenditures over time. The majority of 2009 dollars (64%) will go toward healthcare (specifically beefing up Medicaid). Education is second at 18% (state stabilization funds), and transportation follows at 8% (highway and infrastructure improvements).
This composition will change over the next two years as dollars are shifted into what the Administration considers to be more “long-run economic growth opportunities.” The healthcare portion will diminish to almost nothing as the “one-time” injection of dollars into Medicaid dries up. Transportation projects will grow from 8% to 30%. Energy and Environment will grow from 1% to 17%. And, the broad category of Community Development will grow from 3% to 16%. Education remains nearly constant as a percentage of dollars.
For companies doing business with the government, market potential will begin maturing in the 2010 and 2011 time frame. Companies offering services and products in Transportation and Energy (particularly green initiatives) will see opportunities unfold, as will companies targeting public safety and other “community development” initiatives. Vendors in these markets should consider altering (or developing if non-existent) strategic plans that align themselves with this market potential.
Now is also the time to conduct quantifiable market research to guide product development and lessen decision-making risk, as the margin for error over the next few years is going to be small.
Real solutions will be needed–not hype, as government buyers will be inundated with companies trying to spin their stories (consider how many companies are now identifying themselves as being “green”). Overall, strong value coupled with solid communications will win as the full potential of the stimulus is realized over time.