Washington Firms Soak Up Stimulus

The economic-stimulus package has meant big business for Washington, D.C., and federal contractors around the capital's Beltway.

More than $3.7 billion of stimulus contracts, grants and loans have gone to recipients in the District of Columbia and two adjacent congressional districts—Maryland's 8th District and Virginia's 8th District. That amounts to nearly $2,000 for every resident—nearly three times the national average, according to a Wall Street Journal analysis of reports filed by recipients.

More than $2.2 billion of the stimulus money awarded to the Washington area has gone to private firms, many of which are helping federal agencies with the administrative work generated by the sprawling effort: deciding how to award funds, drawing up contracts and monitoring and auditing spending. Some help federal agencies with their internal monitoring systems and public-relations efforts.

The Journal looked at reports filed in the second quarter of 2010 by recipients of about $210 billion of stimulus grants and contracts. The reports are a new requirement for businesses working with the federal government, and are part of the Obama administration's effort to make stimulus spending more transparent than previous programs. The reports don't cover the tax provisions and aid to states for Medicaid, which make up most of the rest of the stimulus plan's $814 billion price tag.

The stimulus has been criticized by skeptical voters and business leaders both for being too costly and for not producing jobs more quickly. Its focus on government projects and emphasis on disclosing how money is spent have played to the strengths of many capital-area businesses. In part because overall federal spending rose during the recession, Washington's 6.3% unemployment rate was lowest of any major U.S. metropolitan area in July, and well below the national rate of 9.5% that month.

White House spokeswoman Liz Oxhorn said the Journal's analysis showed that only a tiny portion of stimulus funding was going to the capital area and that it didn't reflect how the rest of the funding was "creating jobs in all 50 states."

Tracking the flow of dollars within the states is difficult because of the way state capitals report the funds they receive. But a few other parts of the country have also been clear stimulus beneficiaries because of a particular local industry. In South Carolina, for example, workers are cleaning up a Cold War-era nuclear site in the Central Savannah River Area, under a management corporation that has received more than $1 billion of contracts. The company's partners include Fluor Corp., Northrop Grumman Corp. and Honeywell International Inc.

In the Washington area, Booz Allen Hamilton, a consulting firm in McLean, Va., with a long history of government work is one of the biggest recipients of these types of funds. It has received more than $100 million of management contracts for agencies including the National Telecommunication and Information Administration and Federal Railroad Administration. Booz Allen helped the agencies review grant applications for two high-profile stimulus initiatives, broadband expansion and high-speed rail.

According to reports filed by the firm, the money was funding the salaries of the equivalent of 275 full-time employees during the second quarter of 2010.

A Booz Allen spokesman declined to comment, citing publicity restrictions related to the company's recent registration of an initial public offering with the Securities and Exchange Commission.

Hundreds of firms have provided specialist services such as software, temporary workers, printing and copy editing. But the business has been dominated by bigger players, including data-research firm Westat Inc. in Rockville, Md., and regional offices of International Business Machines Corp. and accounting giant Deloitte.

Clark Construction Group LLC of Bethesda, Md., has awards totaling $161 million for construction of a Coast Guard headquarters building within the new Department of Homeland Security site, office space at Andrews Air Force Base and repairs to the Jefferson Memorial seawall. The awards funded the equivalent of 110 full-time jobs in the second quarter of 2010, according to Clark's reports.

Related

• Senate Passes Small-Business Bill

John O'Keefe, a division president at Clark, said the company's success in winning the awards can be credited to its long history of working with government agencies on construction projects, and ability to show that it had experience managing complex work. Clark says its founder carried out grading and excavation projects in the capital over a century ago. About $1.5 billion in such stimulus funding has gone to Washington-area public agencies, schools, local universities, interest groups and cultural organizations.

Nonprofits, think-tanks and trade associations have also found an additional income source in providing technical assistance on the implementation of stimulus projects. The National Institute of Building Sciences, National Criminal Justice Association, National Association of Regulatory Utility Commissioners, Urban Land Institute and Urban Institute are all among the groups giving advice and evaluation to government agencies under stimulus-funded contracts, according to the reports.