How Will SLED Sector Spend Nearly $800B in Federal Stimulus?

Published: March 08, 2021

Administration TransitionArchitecture Engineering and ConstructionCoronavirus (COVID-19) PandemicEducation (Higher)Education (Primary/Secondary)Food & Sanitary Products and ServicesHealth CareHealth ServicesInformation TechnologyLand Vehicles & EquipmentMedical & Scientific EquipmentOperations & MaintenanceProfessional ServicesPublic FinancePublic UtilitiesTransportation

The U.S. House is poised to pass the reconciled version of the $1.9 trillion American Rescue Plan Act of 2021 this week with President Biden signing it in short order. The U.S. Senate negotiations resulted in some tweaks to the state, local, and education (SLED) components of the bill. The following is a breakdown of each of the major SLED fiscal infusions with significant addressable opportunity for contractors.

Analyst’s Take

  • The unprecedented amount of aid--despite dire predictions from other quarters--combined with generous timeframes for SLED governments to utilize the funding, will be adequate to cover the bulk of revenue shortfalls and ensure the rehiring of most of the laid off or furloughed SLED workforce.
  • As stated in our B2G Market Advisor blog post, Deltek expects the 2021 bid volume for the SLED market to rebound to 96% of its 2019 peak level.  This stimulus infusion will accelerate that rebound and could push it beyond 2019 levels.
  • Given the fairly broad allowable uses for most of the funding, SLED contractors will have to react to localized government needs rather than expect a federally driven convergence of spending toward highly specific federal policy goals (as is the case with routine federal grants in aid).
  • Funding for mass transit and airports is for sustaining purposes until ridership can resume.  These industries will be at the center of any future infrastructure program intending to modernize or improve their sustainability post-COVID.

K-12 Education Stabilization Fund

Amount: $128,554,800,000 (available through September 30, 2023)

Special Allocation: Each local education agency (i.e., independent school districts and charter schools) shall reserve 20% to address learning loss through the implementation of evidence-based intervention

Allowable Uses:

  • Developing and implementing procedures and systems to improve the preparedness and response efforts of local education agencies
  • Training and professional development for staff of the local educational agency on sanitation and minimizing the spread of infectious diseases
  • Purchasing supplies to sanitize and clean the facilities of a local educational agency, including buildings
  • Planning for, coordinating, and implementing activities during long-term closures, including providing meals to eligible students, providing technology for online learning to all students
  • Purchasing educational technology (including hardware, software, and connectivity) for students who are served by the local educational agency that aids in regular and substantive educational interaction between students and their classroom instructors, including low-income students and children with disabilities, which may include assistive technology or adaptive equipment
  • Providing mental health services and supports
  • Addressing learning loss among students…including by…tracking student attendance and improving student engagement in distance education
  • School facility repairs and improvements to enable operation of schools to reduce risk of virus transmission and exposure to environmental health hazards, and to support student health needs
  • Inspection, testing, maintenance, repair, replacement, and upgrade projects to improve the indoor air quality in school facilities, including mechanical and non-mechanical heating, ventilation, and air conditioning systems, filtering, purification and other air cleaning, fans, control systems, and window and door repair and replacement
  • Developing strategies and implementing public health protocols including, to the greatest extent practicable, policies in line with guidance from the Centers for Disease Control and Prevention for the reopening and operation of school facilities to effectively maintain the health and safety of students, educators, and other staff.

Funding for COVID-19 Vaccine Activities

Amount: $7,500,000,000 (to remain available until expended)

Allowable Uses:

Cooperative agreements to, State, local, Tribal, and territorial public health departments for enhancement of COVID–19 vaccine distribution and administration capabilities, including…

  • the distribution and administration of vaccines licensed under section and ancillary medical products and supplies related to vaccines;
  • the establishment and expansion, including staffing support, of community vaccination centers, particularly in underserved areas;
  • the deployment of mobile vaccination units, particularly in underserved areas;
  • information technology, data, and reporting enhancements, including improvements necessary to support sharing of data related to vaccine distribution and vaccinations and systems that enhance vaccine safety, effectiveness, and uptake, particularly among underserved populations;
  • facilities enhancements;
  • communication with the public regarding when, where, and how to receive COVID–19 vaccines; and
  • transportation of individuals to facilitate vaccinations, including at community vaccination centers and mobile vaccination units, particularly for underserved populations.

Funding for COVID-19 Testing, Contact Tracing, and Mitigation Activities

Amount: $47,800,000,000 (to remain available until expended)

Allowable Uses:

Provide technical assistance, guidance, and support, and award grants or cooperative agreements to State, local, and territorial public health departments for activities to detect, diagnose, trace, and monitor SARS–CoV–2 and COVID–19 infections and related strategies and activities to mitigate the spread of COVID–19, including…

  • establish and expand Federal, State, local, and territorial testing and contact tracing capabilities, including investments in laboratory capacity, community-based testing sites, and mobile testing units, particularly in medically underserved areas
  • enhance information technology, data modernization, and reporting, including improvements necessary to support sharing of data related to public health capabilities
  • award grants to, or enter into cooperative agreements or contracts with, State, local, and territorial public health departments to establish, expand, and sustain a public health workforce
  • cover administrative and program support costs necessary to conduct activities

State Health Insurance Exchanges (HIX)

Amount and Allowable Use: $20 million (to remain available until expended) to modernize or update any system, program, or technology utilized by such Exchange to ensure such Exchange is compliant with all applicable requirements

Coronavirus State and Local Fiscal Recovery Funds

Total Amount: $219,800,000,000 (to remain available until expended)

Special Allocations:

  • $195,300,000,000 to make payments to each of the 50 States and the District of Columbia.
  • $45,570,000,000 to make payments to metropolitan cities
  • $19,530,000,000 to make payments to States for distribution by the State to nonentitlement units of local government in the State
  • $65,100,000,000 of such amount to make payments directly to counties

Allowable Uses:

  • respond to or mitigate the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts
  • cover costs incurred as a result of such emergency
  • replace revenue that was lost, delayed, or decreased (as determined based on revenue projections for the State, Tribal Government, or territory as of January 27, 2020) as a result of such emergency
  • address the negative economic impacts of such emergency

Transit Administration Grants

Amount: $30,461,355,534 (to remain available until September 30, 2024)

Allowable Uses:

  • reimbursement for payroll of public transportation (including payroll and expenses of private providers of public transportation)
  • operating costs to maintain service due to lost revenue due as a result of the coronavirus public health emergency including the purchase of personal protective equipment
  • paying the administrative leave of operations or contractor personnel due to reductions in service

Relief for Airports

Amount and Allowable Use: $8,000,000,000 (to remain available until September 30, 2024) to prevent, prepare for, and respond to coronavirus