According to a post on www.propublica.com, it appears the speed at which stimulus money is being spent is much slower than originally projected. An accounting error in Vice President Joe Biden’s May 5 report overstated expenditures by a mere $10.4 billion.
The original report stated that as of May 5, 2009, $28.5 billion had already been distributed (mostly in the form of Medicaid, food stamps, and unemployment benefits). $11.5 billion from the Labor Department was a large component of this. But last week, these numbers were corrected. The Labor Department said in a footnote that the numbers should have been $1.1 billion instead–an overstatement of $10.4 billion.
The New York Times estimates less than 5% of the stimulus dollars has been paid out to date. To meet the Congressional Budget Office’s projected timelines for disbursement, the pace will need to pick up significantly.
For vendors (and agencies), this supports the general feeling in the market that money isn’t moving as quickly as hoped. While there seems to be little doubt the money is coming, it’s uncertainty as to a delivery time frame causes difficulties in planning and budgeting. Vendors need to be supportive during this time, helping customers prepare for the day when the ball drops and funds are available.
Also this illustrates vendors still have time to up their game in the government space. As we have stated previously, this is no short term event, but instead a longer-term strategic course. The funding picture will become clearer, and prepared vendors will have an advantage.