Deadlines fuel stimulus opportunities
Contractors are automating processes needed to meet federal reporting reqirements
Eight months ago, President Barack Obama was getting his feet wet in his drive to increase transparency and accountability in government spending. His $787 billion economic stimulus package ushered in a host of new reporting requirements for federal, state and local agencies.
Watchdogs call it a good government initiative. Contractors are also calling it good business.
“In many cases, the states do not have the mechanisms in place to report on how the funds are being spent," said Mark Cleverley, director of strategy for global government industry at IBM Corp. “This is a natural fit for us.”
“There is an opportunity here to help with the reporting,” said Carolyn Brubaker, director of strategic policy and programs at Microsoft Corp. “A lot of the state and local governments really want to have control of the information.”
Large and small contractors have entered the government transparency market in recent months, offering commercial software, customized solutions and extras such as interactive mapping, dashboards and visualization tools. They also are assisting in maintaining data quality and data security. Because agencies vary in their ability to collect, aggregate and analyze their spending, some clients are undertaking ambitious transparency overhauls that exceed the requirements of the American Recovery and Reinvestment Act (ARRA).
Ray Bjorklund, senior vice president and chief knowledge officer of FedSources Inc., a market research firm, said in March that the Obama administration’s transparency goals would drive growth among contractors that offer sophisticated tools for financial reporting and analysis. The White House has issued guidance that allows agencies to spend a share of the stimulus funds on administrative needs, including reporting.
“We are seeing some very large companies waking up and realizing that there is opportunity in the stimulus reporting,” Bjorklund said. “This is a cottage industry that will continue to grow.”
Although the stimulus law has a finite time frame, with most spending scheduled for completion by 2014, federal transparency efforts likely will continue for several years and will have a ripple effect among state and local governments, Bjorklund said.
Federal agencies have been submitting spending reports to the Recovery.gov Web site since March. By Oct. 10, state and local agencies that have received stimulus funds were required to submit their first comprehensive spending reports. Recovery.gov will display those results by Oct. 30.
Agencies differ in how prepared they are for the detailed stimulus reporting. For example, the Veterans Affairs Department has been using a financial reporting and data warehousing solution provided by Aquilent Inc. for five years. Vice President Joe Biden recently recognized VA as one of 10 agencies to be on or ahead of schedule for fulfilling the stimulus law goals at the 200-day mark.
With the Aquilent technology in place, VA could easily generate reports for Recovery.gov, said David Fout, Aquilent’s president and chief executive officer. “We were able to access the system for [stimulus] reporting,” Fout said. “All the information was available in the data warehouse. There were specific tiers of data tailored to meet the ARRA requirements.”
Assistance and advice
Meanwhile, state and local clients are seeking contractors’ expertise. For example, IBM announced earlier this year that the Arkansas Department of Education is implementing IBM’s technology to monitor its stimulus spending to meet federal requirements. IBM’s solution helps agencies manage spending data, increasingly in real time, and make connections among systems so eventually the reporting can be automated, Cleverley said. IBM often can present the reporting data in a dashboard format without disrupting the existing systems, he added.
“Everybody is committed to the principles behind this,” Cleverley said. “It just makes sense to manage the flow of information.”
Microsoft has been marketing its Stimulus360 planning, tracking and reporting software. Its state and local clients are working with different data formats, both structured and unstructured, for their stimulus law reports, Brubaker said. They also are looking for solutions that can interact with the private sector and offer visualization tools, she said.
“We have a fairly short window of time, and because of that, it has been a very active market,” Brubaker said.
Sherry Amos, director of industry strategy at SAP Public Services, said many state and local organizations are still working with spreadsheets and decentralized data, and they need help developing strategies for managing and integrating their spending data, both for Recovery.gov and long term. Some of SAP's larger clients are putting data into Extensible Markup Language formats.
In many cases, those efforts are encouraged by state officials who want to achieve greater transparency and accountability in their financial reporting systems to avoid any surprises in a federal audit. “They are not comfortable with finding out after-the-fact,” Amos said. “They are taking a proactive approach.”
Another step that some agencies are taking is to use financial data for performance reporting and monitoring. SAP is offering value-added tools, including text analysis tools that can search for data and information in e-mail messages, blogs and other sources, she said.
“This is a brand new field of interest,” Amos said. “With ARRA, there is a drive to make the data transparent, and it is exciting and different for a lot of our customers operating within short time frames.”
Opportunity for all
Small vendors also are diving into the market. Fedarra, a veteran-owned business based in Oregon, is selling a Web-based recovery act reporting assistance service with tools for data collection, field population, accuracy checks and audit trails. For clients who need more assistance, the company offers a concierge service for transparency reporting, which it bills as similar to hiring a tax preparer to handle tax forms.
Government agencies have had eight months to overcome the challenges. For those who are having difficulties, FederalReporting.gov is providing some infrastructure to help with data formatting. Nevertheless, the deadlines are quickly approaching.
Even with vendor assistance and federal guidance, Craig Jennings, senior federal fiscal policy analyst at the OMB Watch advocacy group, said he expects confusion, errors and technical problems at the last minute.
“The states do not really have the resources to make sure these data are accurate,” Jennings said. “We expect the data quality to get better over time.”