timulus projects were hindered by Davis-Bacon Act and Buy American provisions according to a Feb. 18 report by the Government Accountability Office (GAO).
The report found that as of Dec. 21, 2009, the 27 federal agencies GAO reviewed as part of its investigation had obligated about 63 percent of the $309 billion appropriated for American Recovery and Reinvestment Act (ARRA) projects and activities, but had spent only about 20 percent.
Four federal agencies cited Davis-Bacon Act prevailing wage requirements as a factor that delayed their ability to spend funds, including the Department of Energy, which had its weatherization assistance program subject to the requirements for the first time under ARRA. The Department of Labor had to determine the prevailing wages for weatherization work in every county in the United States, and at the end of 2009, only 9,100 of the planned 593,000 homes were weatherized.
Following the release of the GAO report, ABC March 3 sent a letter to all member of the U.S. Senate to support the Thune Amendment (S.A. 3338) to the Tax Extenders Act (H.R. 4213) that would have suspended the Davis-Bacon prevailing wage rate on federal construction projects in addition to expanding tax reductions to encourage small businesses to grow.
“By suspending Davis-Bacon for the remaining ARRA funds, the Thune Amendment will allow these dollars to get into the local economies expeditiously, and be competed for on a level playing field by all small business owners,” the letter stated.
Five agencies also cited Buy American provisions as a delay to spending due to the inability to find the necessary American-made parts. In addition, several federal agencies said that projects were delayed due to certification and reporting requirements and environmental review requirements, and newly created programs hit hurdles as agencies had to hire staff to handle them during a time when states and localities faced budget problems.
To read a copy of the report, click
here.