Congress to AEC industry: Drop dead!
Robert Cassidy, BD+C Editor-in-Chief
Comments? Email Robert Cassidy
Seven hundred eighty-seven billion smackers, and just scraps for the U.S. nonresidential design and construction industry. That's what the stimulus plan amounts to. Bucket loads for roads, bridges, and water projects—peanuts for schools, colleges, and public institutions. Talk about highway robbery!
Of the $134.5 billion in the American Recovery and Reinvestment Act (ARRA) for construction, $93.2 billion goes to civil projects—$49.3 billion for transport infrastructure, $21.4 billion for clean water and waste remediation, $18.2 billion for wireless/broadband grants and upgrading the grid, and $4.3 billion for “workforce development.” All valuable programs, but they won't put bread on your table.
Here's how Congress screwed you. First, $14 billion for K-12 school construction and $6 billion for higher ed facilities in the House version—$20 billion in potential work for AEC firms—got zeroed out by the Senate. In its place, Congress set aside $8.8 billion for governors to use at their discretion for constructing schools, college buildings, and, in a last-minute change to the bill, public safety facilities. So now students will have to arm-wrestle with the police for scarce dollars. Who do you think will win that battle?
The compromise bill also cut billions that might have led to work for your firm: $1.6 billion in energy-efficiency grants and loans to institutions, $1.6 billion in federal justice facilities, $150 million for the Smithsonian, and $2.7 billion for NASA, NIH, and CDC facilities construction—a total of $4.5 billion wiped out with a stroke of the pen.
The second way Congress screwed you was to more or less sequester billions for construction into categories where only “existing project backlogs” are eligible. Thus, $5.6 billion for GSA federal buildings must be used only for projects already in GSA's pipeline.
The same holds true for military construction ($2.8 billion), DOD facilities renovations ($4.2 billion), VA hospitals ($1 billion), National Science Foundation labs ($400 million), USDA projects ($200 million), USGS buildings ($140 billion), Social Security Administration facilities ($500 million), and $3 billion shared by a half-dozen other agencies.
Of the $29.5 billion in ARRA building projects, there's $2 billion for HHS community health centers, $700 million for the construction of ports of entry, $210 million for fire stations, and $130 million for USDA rural community facilities. Of the $29.8 billion for energy and technology, the DOE can award $5 billion to the states for weatherization assistance and $6.3 billion for state and local government energy grants on a competitive basis.
At best, that's $14 billion out of $135 billion to be awarded on a discretionary basis. Even if you've got a project in the agency's pipeline, it's highly unlikely that most AEC firms will be “stimulated” by the stimulus.
Thanks for nothing, Congress.
Note: Kudos to the AGC for its excellent rundown of ARRA infrastructure investment provisions.