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Federal Government Gearing Up to Assist States with ARRA Reporting Requirements

On April 30, Representative Edolphus "Ed" Towns, D-NY, the Chairman of the Committee on Oversight and Government Reform, introduced the "Enhanced Oversight of State and Local Economic Recovery Act" (H.R. 2182). The bill has three major provisions:

  1. Modifies Section 1552 of the American Recovery and Reinvestment Act (ARRA) so that state and local governments may retain up to 0.5 percent of any economic stimulus funds they receive for administrative and oversight purposes.
  2. Modifies Section 502 of Title 40 U.S. Code so that state and local governments may use any GSA Schedule for goods or services funded by ARRA.
  3. Modifies ARRA Section 1512 by requiring the Office of Management and Budget (OMB) to provide user-friendly means to meet economic stimulus reporting requirements, including jobs created and jobs retained.

These changes would apply to any state, local, regional or tribal government, including Native Alaskan villages and corporations, local educational agency, or public institutions of higher education.

On April 23, Vice President Biden released a letter he sent to the Senate Committee on Homeland Security and Governmental Affairs. In the letter, he informed Senators Lieberman and Collins that OMB will be reviewing the economic stimulus guidance released to date to determine where it may be supplemented. Biden reiterated that OMB would be issuing additional guidance in early May that addresses the concerns of the Government Accountability Office (GAO) expressed in a recent report and those of state and local officials, including:

  • Additional detail on data reporting requirements, including data definitions, formats, and methods of transmission
  • Roles and responsibilities of recipients and sub-recipients with respect to data collection, data quality, and other compliance and performance issues
  • New flexibility for states for costs of administrative activities
  • Changes to the single audit process to ensure economic stimulus activities receive special emphasis and scrutiny
  • A standard procedure for recipients to calculate jobs created

The National Academy of Public Administration has been hosting a national dialog on information technology solutions to assist in the development of effective public monitoring of economic stimulus funds.

GovWin's Take

Even though over $15.4 billion of economic stimulus funding has been paid out as of April 24, the federal government is still finalizing the rules surrounding administration and oversight. For cash-strapped states, clarity cannot come fast enough. Several grant application deadlines are looming and starting on October 10 states have to begin providing financial reports to Recovery.gov.

However, once the final guidance is in place, expect the pace of spending activity to pick up dramatically. Be sure your company is ready. By this time, you should have identified the economic stimulus spending initiatives that are appropriate pursuit targets, developed a business development and sales strategy, and marketing messaging specific to the goals and objectives of ARRA. If you are planning to capture state and local economic stimulus funding, federal assistance vehicles should already be identified and well understood. Your business development and sales professionals should now be in contact with state administering agencies.

Don't overlook the importance of H.R. 2182 opening up several new GSA Schedules for use by state and local governments. It's likely that these schedules will remain available to state and local governments after ARRA.

Opportunities for Vendors -- Energy Efficiency and Conservation Block Grant

The American Recovery and Reinvestment Act (ARRA) includes $16.8 billion for energy efficiency and renewable energy initiatives. Of that amount, $3.2 billion has been appropriated to fund the Energy Efficiency and Conservation Block Grant (EECBG) program (GovWin member login required). This block grant was created by the Energy Independence and Security Act of 2007 (EISA) but never received funding until the economic stimulus legislation was enacted. $2.8 billion will be awarded to states, cities, counties, U.S. territories and possessions, and tribal governments based on formula guidelines set forth in EISA; and $400 million will be awarded on a competitive basis. The U.S. Department of Energy anticipates distributing:

  • $1,880,310,000 for formula grants to eligible cities and counties
  • $767,480,000 for formula grants to states (60 percent of the funding received by states must be sub-allocated to local governments within 120 days of award)
  • $54,836,200 for formula grants to tribal governments

The purpose of the EECBG program is to:

  • Reduce fossil fuel emissions in an environmentally sustainable manner while maximizing benefits to state and local governments
  • Reduce total energy use by state and local governments
  • Improve energy efficiency in the building and transportation sectors

Grant funds may be used for the following activities:

  • Development of an energy efficiency and conservation strategy
  • Technical consultant services
  • Residential and commercial building energy audits
  • Financial incentive programs
  • Energy efficiency retrofits
  • Energy efficiency and conservation programs for buildings and facilities
  • Development and implementation of transportation programs that conserve energy
  • Building codes and inspections
  • Energy distribution technologies
  • Material conservation programs
  • Reduction and capture of methane and greenhouse gases
  • Traffic signals and street lighting
  • Renewable energy technologies in government buildings

Allowable activities to conserve energy for transportation programs include synchronized traffic signals, intelligent transportation systems (ITS), and programs to reduce single-occupancy vehicle use, which may include congestion pricing.

Applications from states are due to the U.S. Department of Energy on May 26 and applications from local and tribal governments are due on June 25. State applicants are required to submit an updated State Energy Program Plan and an Energy Efficiency and Conservation Strategy with their applications.

In evaluating applications, preference will be given to those projects that can be started and completed expeditiously. The goal is to expend at least 50 percent of the funding on projects that can be started by June 17, 2009. The term of the grant will be 36 months.

This economic stimulus funding initiative also provides $3.1 billion for the State Energy Program (SEP), (GovWin member login required a formula grant program designed to provide funding to states, the District of Columbia and U.S. territories, which may be used to develop, update or implement state energy plans.

GovWin's Take

For all intents and purposes this is a new grant program and a new opportunity for companies that sell to state and local governments. Energy consulting, energy audits, smart-building automation technologies, and ITS solutions can be funded under EECBG. State and local governments will need assistance developing energy plans and conservation strategies, which are required by the federal government. State energy officials will be administering this grant program. Companies should be reaching out to these officials now.

Late governors' addresses provide post-stimulus insights (or not)

Each year GovWin chronicles all of the initiatives announced by the governors in our annual "state of the states" report (in stores now!). However, due to timing, one or two speeches won't make it into that report. Louisiana Gov. Bobby Jindal (R) delivered his address on Monday. I'll be detailing his proposals below since they are not included in the published report.

These inventory of these speeches is a great resource when used in combination with GovWin's state and local economic stimulus products. (All of the speeches, except for Jindal's and Gov. John Baldacci's (D-ME), were delivered prior to the announcement of the Obama administration's stimulus plan.) The proposals announced during the worst months of the state and local fiscal crisis are the ones most likely to get a boost from the money freed up by federal relief. So, I still recommend giving Gov. Baldacci's speech a read to get a sense of how the other governors would have spoken had they know what sorts of moneys were coming down from Washington.

Unfortunately, Gov. Jindal, being the GOP's lead governor in opposition to the stimulus, was mostly silent on the subject, only mentioning it once in a negative context. He doesn't even mention a single transportation or other infrastructure project since I guess doing so would be a tacit admission that he is using federal dollars. So, let's take a look at what he did talk about. I've tagged each initiative with an GovWin vertical category(ies) for reference versus the report.

Preemptively close a $700 million Medicaid shortfall when federal funding formulas reset in a couple of years.

  • Streamlining civil service, rewarding employees based on performance, not just length of service [General Government Services]
  • Changing the higher education formula by working with the Board of Regents to make sure we're rewarding excellence and not encouraging duplicate programs [Education (Higher)]
  • Bring more transparency to the K-12 education funding formula to make sure those dollars actually go to help the intended students in the intended classrooms to deliver an excellent education for every student in Louisiana [Education (Primary/Secondary)]
  • Setup a commission on streamlining government, whether it's consolidation, out-sourcing, maybe even the elimination of duplicate programs [General Government Services]
  • Make it even safer for our children by closing the loopholes on the background checks for those employees that work at DSS and closing some of the loopholes when it comes to our daycare facilities [Justice/Public Safety]
  • Reduce recidivism rates by providing the education, the training, the services, before prisoners are released back in our general population [Education (Primary/Secondary & Higher), Social Services]
  • Reduce the dropout rate in our high-schools by taking take proven GED models in 14 school districts and expand them to provide work-ready certificates, training, internships to link students to the education of their career futures [Education (Primary/Secondary & Higher)]

To make sure budget cuts don't fall disproportionately on higher education and healthcare, reform the budget process to open up billions of dollars that are protected either by statute or constitution [General Government Services]

  • Every program should have to compete for taxpayer dollars and should be sunset to review their intended purpose and decide whether to renew those dedications. [General Government Services]
  • Every year they should have to report performance indicators to see if the dollars are achieving their intended purpose especially during times of shortfalls [General Government Services]

Make you take some time to download the full report, which is available for purchase (and free to certain GovWin members). It's the best tool available for technology vendors who want to align their products and solutions to the governors' agendas. As always, GovWin's crack team of analysts will keep a watchful eye on these proposals in search of opportunities coming to market.

As states move to new ID cards, REAL ID debate picks up

Only fifteen months after the Department of Homeland Security issued the new REAL ID regulations states across the country are moving forward with new drivers licenses and identification cards that include new enhancements and more security features. In Michigan, L-1 Identity Solutions, Inc. was awarded a contract worth nearly $40 million for seven years to develop, design and produce enhanced driver's licenses (EDLs) and ID cards. Michigan has left the door open for the possibility of REAL ID compliant licenses and ID cards.

In Texas, the Department of Public Safety (DPS) has unveiled a new design to their driver's licenses and ID cards that include new enhancements and security features, like those in Michigan. The Texas DPS, under contract with Bearingpoint, has been transitioning to a new driver's license system since 2005 and also is contracted with L-1 Identity Solutions, Inc. for the development and now deployment and distribution of the new driver's licenses and ID cards. The new ID cards include facial recognition technology and under the new system, will collect fingerprints digitally. The state of Kentucky is currently soliciting proposals from vendors for an upgrade to the driver's license system. There has been no mention of REAL ID as part of the requirements, but there has also been no formal discussion of the license and ID cards.

It is GovWins belief that as the deadline for states to become REAL ID compliant, exceptions and other changes may be required in order to allow states to meet the guidelines set forth by the DHS. In addition, the DHS may determine that state's new ID cards, like in Texas and Michigan meet the new federal regulations. However, as new information is released on REAL ID, vendors should be prepared to develop ID cards and driver's licenses with REAL ID in mind, while at the time providing the specifications and other requirements the state request. As technology progresses and new biometric and digital fingerprinting systems become the standard, states will have to determine the best course of action: develop standards that comply with REAL ID or technologies that will allow for future REAL ID specifications.

20 states receive ARRA JAG funding valued at $424 million

On April 29th, Attorney General Eric Holder announced that more than $424 million in American Recovery and Reinvestment Act funds will go to 20 states, territories, and the District of Columbia through the Edward Byrne Memorial Justice Assistance Grant (JAG) program. The funds will be used for a variety of things such as job creation and technology improvements. The JAG program ($2 billion) represents half of the $4 billion allocated in the Recovery Act to state and local agencies through the Department of Justice. The rest of the money will be dished out to state and local agencies through additional formula grants as well as a competitive grant.

Of the $424 million already allocated, the top five states based on funding level includes: Florida ($81M), Michigan ($41M), Tennessee ($30.8M), New Jersey ($29.7M), and Maryland ($26.5M). Within these five states, a majority of the funding will be used to create and sustain jobs within public safety agencies. Maryland, Michigan, and Tennessee were the only states out of the top five who mentioned funding will be used for technology improvements. These include communications and forensics equipment, computer and software technology, improving prison and jail security, and other technology improvements.

While other states did not receive the lion's share of the allocations, many smaller states will pursue technology upgrades with their money. For example, Delaware plans to use some of their $6 million for sex offender monitoring. Connecticut on the other hand plans on using some of their $12 million for expanding the Department of Corrections case management system, as well as upgrading their automated fingerprinting systems.

The projects listed in these allocations are a good indication of the type of technological needs many state and local agencies will have as more money is passed down. GovWin has published a report discussing these implications in our Economic Stimulus report on DOJ and DHS ARRA funding for state and local Public Safety agencies. Vendors should begin the process of identifying their target agencies and the amount of money they may receive. Also, vendors should utilize GovWin's Economic Stimulus portal for more information on the type of projects agencies have identified as "shovel ready".

The main focus of the ARRA was job creation, so expect a large chuck of funding being set aside for that. Any leftover money will most likely be used to upgrade or enhance existing systems. Vendors should identify incumbent systems to better understand the type of upgrades or enhancements an agency may need. Be on the lookout for projects dealing with information sharing, interoperable communications, and mobile police applications. GovWin will be hosting a webinar June 2nd, discussing the state and local public safety implications of DOJ and DHS ARRA funding.