Construction Opportunities Will See Boom Due To DoD ARRA Allocation

Though we all know that many areas of the United States economy are suffering right now, the federal construction market is likely to soon see a huge boom. The Department of Defense presented a 191 page report to Congress which details how it plans to spend the money is has been allocated by the Stimulus Package, more properly known as the “American Recovery and Reinvestment Act (ARRA) of 2009.”

The Stimulus Package currently includes just under $7.5 billion allocated for the Department of Defense (less than 1% of the total). The DoD stated recently that it intends to spend its funding with “unprecedented full transparency and accountability.” www.Recovery.gov has been created in order to help citizens monitor the progress of the spending of ARRA dollars, and the DoD will be making use of this. They have also set up a website at http://www.defenselink.mil/recovery to further this initiative.

How does this apply to the construction market? The DoD has “identified specific investments in construction, facility improvements, and energy efficiency projects that will help improve the quality of life for our troops and their families.” Their report to Congress included an extremely detailed breakdown of how their share of ARRA dollars will be spent. The report includes anticipated costs, descriptions of work, and project locations for each expense they are proposing.

The Department of Defense intends to spend roughly $2.1 billion on military construction and family housing projects, including $1.3 billion to construct two new hospitals (to be located at Camp Pendleton, California and Fort Hood, Texas). DoD has also indicated that it will be “pursuing architectural and engineering services greater than $1 million for 5 projects, conducting repair projects greater than $7.5 million for 56 projects, and carrying out 45 Energy Conservation Investment Program projects, respectively.”

The DOD also provided a list of roughly 3,300 other Facilities Sustainment, Restoration, and Modernization (“FSRM”) projects costing an estimated total $3.4 billion. These FSRM projects account for over $3.83 billion of their entire Stimulus spending.

The U.S. Army Corps of Engineers, the federal agency that is the most heavily involved in construction, has also provided Congress with “informed estimates” of existing capability to perform additional work. Of that, about $2.1 billion is appropriated for construction projects.

These and other projects will provide enormous opportunities for companies acting as federal construction contractors. Time will tell whether there are enough procurement officers currently active in the government to issue this many solicitations in such a short time and whether the specific agencies have the capability to properly administer all of this work, but there is certain to be a surge in construction projects over the upcoming months!