The passage of the Stimulus Bill corresponded almost perfectly with Valentine’s Day, a perhaps unintended but still humorous outcome. While I have not had time to dig through the 1,100 page bill, I know that funding for enough grant programs, new and old, survived to keep grant writers busy, busy, busy. But my topic today is not to peek into the candy store to drool over the tasty funding treats, but rather to consider how the Feds are going to actually shovel $800,000,000,000 out the door.
Since the bill was first proposed, I have been concerned about the logistics of funding distribution and have fired off numerous emails to reporters at the Wall Street Journal, New York Times and Washington Post to try to get them to cover the “how” of the 5 W’s and the H. While I am unsure whether it was a result of my emails, Stephen Power and Neil King, Jr., finally did so with an illustrative piece in the February 13, 2009 issues of the WSJ called “Next Challenge on Stimulus: Spending All That Money.” The reporters take the reader through the tortured process of a Minnesota company trying to access a large Department of Energy (DOE) Loan Guarantee.
Although this company applied during a previous funding round, the Stimulus Bill includes billions more for this initiative, which is supposed to fund the kind of “green, energy-efficient” businesses and jobs that President Obama heralds. As of today, the DOE actually has an open competition for this program. What’s particularly fun is that we happen to be writing a proposal for the DOE Loan Guarantee program. While a non-disclosure agreement prevents me from discussing the project on which we are working, I am very familiar with RFP, which was originally issued on September 22, 2008 with a deadline of December 31—but it was extended to the end of February. I guess the DOE hasn’t gotten the memo from the White House about how growing green jobs helps solve the economic crisis. But I digress.
This RFP is one of the most complicated RFPs I have ever encountered and is filled with confusing directions, references to obscure regulations that are not included in the package, bizarre questions, and so on. It also requires the applicant to produce a dizzying array of attachments, certifications, etc. In other words, the DOE has made it about as difficult as they can to get loan funds, which makes great work for grant writers but presumably discourages applicants. And, remember, these are loans that have to be repaid, not grant funds.
The WSJ story recounts the sad tale of Sage Electrochromatics’ attempts to get its hands on the loan proceeds. Although the loan guarantee was long ago approved, the company won’t see the money until the end of this year at the earliest. The reporters use Sage’s experience to discuss the challenge to be faced by applicants for Stimulus Bill funds. As one who wrote his first funded Department of Energy grant in 1979 during the last energy crisis for the long gone Electric Vehicle Demonstration Program, I know this is not a new situation, as Federal bureaucrats are usually in no mood to work quickly. But the story does raise the specter of what is going to happen, or more likely not happen, when the ink dries on the Stimulus Bill.
Most folks don’t understand and the press rarely covers how, in most cases funds have to be appropriated, regs written, RFPs issued, applications submitted, applications reviewed and ranked, award letters sent out, final budgets negotiated and contracts signed to spend money. The key personnel in this folderol are the small number of Program Officers in the various Federal departments who manage the process. Unfortunately, we don’t have a National Guard of Program Officers who train one weekend a month shuffling papers to be ready to answer the call. That means Federal agencies will find themselves up to their eyeballs in spending authority with existing staff levels pegged at much smaller budgets.
As a result—and despite the best intentions of our President and Congress—it’s going to take quite a while to get the money to the streets. Most Federal agencies usually take anywhere from three to six months to select grantees and probably another three months to sign contracts. My experience with Federal employees is that they work slower, not faster, under pressure, and there is no incentive whatsoever for a GS-10* to burn the midnight oil. Federal staffers are just employees who likely don’t share the passion of the policy wonks in the West Wing or the grant applicants. They just do their jobs, and, since there are protected by Civil Service, they cannot be speeded up. Also, there are no bonuses in the Federal system for work above and beyond the call of duty.
Let’s take my old friend YouthBuild in the Department of Labor, which was transferred out of HUD a few years ago. The deadline for the FY ’09 YouthBuild program was January 15, so there are hundreds of applications sitting under half-filled coffee cups and stale donuts in the sub-basement of the DOL building in various stages of review for the $59,000,000 – $70,000,000 then available (the range comes from Senate/House conflicts in the original appropriations bill). Along comes the Stimulus Bill, which adds $50,000,000. Now we’re talking as much as $120,000,000 for YouthBuild, or well over twice the amount awarded in the last funding cycle in FY ’07.
The question is, what is DOL going to do? It has two choices: (1) more applications that were submitted in January could be funded; or (2) there could be another funding round, opening up the competition and allowing new applications. Logic says door number one, but if I know my federal bureaucrats correctly, door number two will be picked, because this will spread out the work load for the Program Officers and will give DOL time to hire more staff, so that existing Program Officers don’t end up with twice the grantee caseload. Too few Program Officers also increases the potential for fraud, which will already be heightened because of the unprecedented money flood. I’ll let readers know if I am right or wrong.
Of course in addition to more money for YouthBuild and other existing programs, there is funding for lots of entirely new programs, such as the HUD $2,000,000,000 Neighborhood Stabilization Program (NSP), which no one knows how to implement, and $500,000,000 to provide job training through the “Green Jobs Act” under DOL auspices. NSP is in HUD, which means they will have to take staff from the dozens of other competitive HUD grant programs, which are about to issue FY ’09 NOFAs, to hasten this one. When last I visited NSP in December, ‘Tis the Season for Government Folly, Fa La La La La La La La L.A.!, not a single NSP dollar had been spent since the program’s original “emergency” passage in August, and I believe no dollar has yet been spent.
For grant applicants, this means that agencies should apply for as many grants as they can, taking great care to make sure that the applications are technically correct. Since many applicants will believe the stimulus hype and assume that everything will be funded, the majority of applications are likely to be incomplete or incoherent. Because federal reviewers will be told to get the money out as fast as possible, the review is likely to be primarily checklist-oriented, with the Program Officers throwing the garbage proposals over their shoulders. Thus, this is not the time for amateur hour submissions. While it is always important to fly speck your submissions, it will be essential if you want to “have it all.” As the inimitable Vin Diesel says to heart throb Paul Walker in The Fast and the Furious, “If you have what it takes . . . you can have it ALL!”**
* GS refers to “General Schedule” pay grades for Federal employees, which range from GS-1 to GS-15. Most Program Officers are probably GS-8s to GS-11s. Here’s a fun site for calculating GS pay grades. For example, in 2004, a GS-10 working in DC would have made $46,000 to $59,000. The GS-10 is probably stuck in a cubical with a 14″ CRT and Pentium II, along with mismatched furniture, since it is unlikely that any federal managers read about the tools of the trade. This is not exactly a princely sum and probably less than wonderful working conditions—so how likely is it that they will suddenly spring to life to spend the Stimulus package quickly?
** As luck would have it, the original cast has gathered for Fast & Furious, which opens in April. One can only hope that the plot involves Paul Walker getting a Department of Energy grant to build the “ten second car” he owes Vin. After all, electrics have lots of low end torque and street racers only have to go 1/4 mile, so the 40 mile range wouldn’t be a problem. The tag line for the new movie is, “New Model. Original Parts.” This could also be used to describe the somewhat less than successful attempts at changing Washington evident in the Stimulus Bill passage.