Federal stimulus rules handcuff some agencies

The small town of Stanley, Va., figured on spending its nearly $40,000 share of federal stimulus funds to start replacing its aging fleet of four police cars.

But Stanley learned last summer that the federal government wouldn’t release the town’s stimulus money. The U.S. Department of Agriculture was worried that the town’s plans to buy Dodge, Ford or Chevrolet police cars assembled in Canada could violate the “Buy American” provisions of the American Recovery and Investment Act, records show.

“The situation has put our town of Stanley in an extreme hardship trying to provide public safety to our community,” Police Chief Tim Foster later wrote in letters to Congress.

The situation in Stanley, though later resolved in the town’s favor according to Chief Foster, illustrates a broader problem facing federal agencies and local and state governments. Tasked with spending hundreds of billions of dollars on “shovel ready” projects, officials are finding that a host of rules governing where, when and how money is spent can lead to significant delays.

The aim of the Buy American provisions, for example, is to keep the nearly $1 trillion in stimulus money in the U.S. With a few exceptions, the rules require that the raw materials and other goods used for stimulus-funded projects be made in the U.S.

But in practice, the rules can delay projects as contractors spend time to find alternate suppliers and even change their design plans, according to a government report.

USDA spokesman Caleb Weaver said the department has required that any vehicles purchased with stimulus funds be manufactured in the U.S.

“However, in the event the rule is prohibitive, there exists an exception process,” he said.

In Chicago, the city’s housing authority found that the only security cameras compatible with their existing system were made outside the U.S., forcing officials to delay the project as they sought a federal waiver to the Buy American rules, according to a review by the Government Accountability Office (GAO).

At the Department of Homeland Security, an airport screening project costing hundreds of millions of dollars was slowed as officials awaited a waiver from the Buy American provisions to allow contractors to use foreign-made components, the GAO found.

Homeland Security spokesman Bobby Whithorne said the department gave a waiver to a project in September to expedite airport security projects funded by the stimulus through the Transportation Security Administration. The waiver guarantees that at least 95 percent of TSA’s stimulus funding goes toward buying American-made materials for the in-line baggage machines funded through the project, he said.

“All TSA in-line baggage system projects are currently on track and we do not expect delays,” Mr. Whithorne said.

The Energy Department’s office of energy and renewable energy has disclosed in a notice that some of its stimulus grantees have “encountered difficulties in procuring certain manufactured goods in compliance with the Buy American provisions.”

Kenneth Baer, communications director for the Office of Management and Budget, said in a statement e-mailed to The Washington Times that officials are focused on implementing the Recovery Act “quickly and effectively.” He said Congress “wanted to ensure that all possible Recovery Act opportunities are available for American workers and American companies.”

“We’ll continue to strive to do that, expanding opportunities and jobs for the American people,” he said.

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