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Some may see rainbows and pots of gold, but applicants from state and local government that are pursuing the American Recovery and Reinvestment Act (ARRA) stimulus also will find that funding approval presents its own complications, and that recovery projects require skillful management.
In this uneasy era of federal bailouts for banks, insurance companies and auto manufacturers, it seems fitting that funds also are being made available to improve services delivered to U.S. citizens at the state and local government (SLG) level. Consequently SLG organizations are rapidly responding to ensure their cut of the ARRA funds.
Developing a solid business case and completing the justification process necessary to quickly receive ARRA funding are smart ideas, especially because SLG coffers are all but tapped out. For those who delay, major projects may necessarily remain frozen that were put on hold indefinitely due to lack of funding. And costs are mounting on social programs, with no additional revenues on the horizon to cover them.
For state and local groups that are considering their options, why not apply for these federal grants? For one thing, bear in mind that the funds are not charitable gifts and there are plenty of strings attached. And if the process of competing for federal funds seemed bureaucratically cumbersome, the real job of fulfilling grant objectives will require even more discipline.
Successful SLG recipients of ARRA funds are learning quickly that the significant terms and conditions require substantial effort and oversight. Still, for the majority of organizations that apply for and receive stimulus funds, the benefits far outweigh the planning commitment and potential challenges.
Even so, the consequences of success (or failure) are extraordinarily high for projects funded by the American Recovery and Reinvestment Act. Stimulus dollars will be invested with unprecedented levels of accountability and transparency, so it's important to note:
o These funds are for temporary use only.
o Availability is based upon many competing priorities.
o Spending requires significant management oversight and accountability.
Federal, state and local agencies need to be acutely aware of the substantial demands and increased scrutiny that accompany recovery funds. Each program and related project now is more visible and must meet the compliance, accountability and reporting requirements of the Recovery Act. Thoughtful planning and groundwork in advance will go a long way toward keeping deliverables on track and avoiding unnecessary issues.
Once a project is ARRA-funded, important next steps should include:
o A review of the business case with all stakeholders to ensure that the expected project outcomes can be realized in a relatively short time. It's recommended that this review include key stakeholders from the project, acquisition, finance and management departments. All assumptions, estimates and requirements need to be reset before finalizing the project plan. Remember that only a good beginning makes a good ending.
o Creation of a communication plan to ensure that the project reporting requirements described in the ARRA legislation are completely satisfied. All stakeholders should be updated periodically to make sure the project is delivering its planned value.
o Development of an acquisition strategy, which helps to determine the most appropriate type of contracting process and method of procurement. The best contracting vehicle may assign all or some of the reporting and tracking of the project's status to the successful bidder or contractor.
o Application of a disciplined project management methodology, both internally and externally.
o Creation of a comprehensive risk plan that mitigates the expectation that the resulting higher
levels of service may become the expected norm after funding is exhausted.
Many savvy SLGs also have established dedicated offices to manage the ARRA administration process. And more states would be wise to establish an integrated project team (IPT) approach to their recovery projects and programs. In doing so, projects will sustain a far better chance of meeting the outlined requirements on time and within budget.
An IPT ensures that key stakeholders -- those involved from the requirements development stage through the acquisition process, and throughout the entire project life cycle -- are engaged and committed to the project's outcomes. In addition, changes in project scope and schedule can be more efficiently managed in an IPT. Individual roles of the IPT members can also be developed to address risk, reporting and other functions in a more disciplined manner. Ultimately discipline is what's needed to fully comply with ARRA transparency and accountability standards.
In some cases, a group of experts -- called "tiger teams" -- may be assembled to facilitate rapid completion of specific project stages. Originally a military reference for a team of commandos, the term has a somewhat different meaning in the civilian world. Its role in the nonmilitary work environment can vary, along with the effectiveness and efficiency of its use.
For instance, a tiger team cannot wave a magic wand and complete the entire acquisition and project life cycle for a major project in only a few days; nor can they be responsible for fixing "broken" projects. Let's face it: Processes that were dysfunctional before adding stimulus funds are still dysfunctional. Instead, the tiger team might be called upon to complete a specific stage in the process. For example, a team of internal and external experts could be created to help write the statement of work after project requirements have been completely analyzed and documented.
As tempting as it may be to "bring in the hired guns," there are benefits to using internal IPTs to manage ARRA-funded projects. In the long run, for instance, internal IPTs have a vested interest in each phase's outcome -- from requirements conception to project completion. ARRA projects also can provide beneficial development opportunities for internal team members. And so, project leads who are planning the implementation of recovery projects will want to consider on a case-by-case basis whether or not the use of internal IPTs is the most efficient method, given the project's variables.
Perhaps the most effective approach to managing an ARRA project is to combine the IPT effort with the use of existing contract vehicles. SLGs have access to many existing federal and state contracts that fulfill most needs. However, if the team decides that an alternate procurement strategy is warranted, a performance-based contract is the recommended vehicle. It should be awarded to the contractor that incorporates performance metrics and milestones in best alignment with the project's work breakdown structure. In addition, the contract should include reporting standards and milestones that correlate with the ARRA requirements. Bear in mind that the most widely accepted reporting process to measure project performance is earned value management.
Regardless of the variables, in order for any IPT to function properly, it's essential to train team members and extended supporting members in the best practices of program and project management. Here's a key to putting this all in perspective: If you've ever traveled to a foreign country where you don't fluently speak or understand the local language, you've probably found that speaking slower or louder in your own language isn't an effective way to get your point across (i.e., It's amusing to the listener, but not effective). Similarly the most efficient and effective method of managing projects is to ensure that all stakeholders speak the same language -- literally and
News reports indicate that thousands of new jobs are being created through specially funded ARRA stimulus fund programs, which is a bit hard to believe considering that most companies are not hiring or expanding, and some are barely making ends meet. Instead, it's more likely that layoffs are being temporarily staved off by staffing ARRA projects with workers who were recently let go or soon will be. Realistically the most significant portion of the billions in aid to SLGs will be made available to address state budgetary problems, not to create new jobs.
Another lesser known reality: As reported by Recovery.gov, in federal fiscal 2009, almost two-thirds of Recovery Act funding to states and localities will support health-related services. This figure isn't surprising given that in some states, including Maryland, the number of newly insured Medicaid recipients has grown exponentially over the past year, due primarily to the increase in jobless rates. And this enrollment expansion is being necessarily funded directly and indirectly by ARRA dollars.
While the expenditure is important, climbing Medicaid figures limit available funds for other critical ARRA-related projects; not surprisingly, reducing the unemployment rate is a primary goal of the ARRA legislation.
The good news is that stimulus spending has the ability to create and save jobs, but it must take place quickly. Statistics in regard to stimulus funds change regularly, but of the approximate $330 billion available, state and local governments can apply for approximately $100 billion in competitive or discretionary grants to fund unique ARRA projects. And these projects directly impact state unemployment statistics.
Although the ARRA legislation is very complex, and it can be hard to see through the red tape to the ultimate benefits, numerous projects are already under way that impact local communities. TIGER (Transportation Investment Generating Economic Recovery) Discretionary Grants, for example, specifically fund transportation surface and infrastructure projects. These projects present outstanding benefits for the public and are highly visible because of signs required to identify them as ARRA-funded.
Could it be considered fiscally irresponsible not to seek stimulus funds at the SLG level? Perhaps that's a bit strong; but it doesn't hurt to be aware of the positive economic and social impact that well targeted, well planned and well funded projects can make. And given the deteriorated economic situation that's coupled with disappointing state budget forecasts, it's without a doubt the time to maximize the use of stimulus dollars.
To make the most of these hard-won and coveted funds, projects need to be launched without delay, and they need to be executed using an airtight IPT to reduce the risks of poor results and project failures. Opportunity is on the horizon, but only solid planning and skillful management will make it real.