New Opportunities Limited in Stimulus Plan Federal contractors will see only limited opportunities for new business in the Recovery Act, according to the market research firm FedSources. FedSources estimates the $787 billion economic stimulus program contains only about $62 billion in direct federal procurement—$21 billion to be spent in the remaining six months of the current fiscal year and $41 billion next year. State and local governments will award far more contract dollars on road-building and other infrastructure projects. At least 90 grant programs will funnel federal dollars to state and local projects. Because of the emphasis on spending money quickly to revive the economy, much of the federal spending on services will be used to accelerate programs that are already under way, such as the improvements to the Social Security Administration’s IT systems, said Ray Bjorklund, executive vice president of FedSources. In many of those programs, contracts have already been awarded and contractor teams have been assembled. Although the Office of Management and Budget has told agencies to give “maximum practicable opportunities for small businesses,” Bjorklund said the Recovery Act’s emphasis on competition will discourage contracting officers from making sole-source awards to 8(a) firms or other small businesses. Any sole-source award must be posted in a special section of the Recovery.gov website, putting those contracts under a spotlight. Bjorklund said federal agencies’ task of spending $21 billion in the next six months “is scary, very scary.” Many program offices and contracting shops are likely to be overwhelmed. He cited the Energy Department’s smart grid program, with a current annual budget of $134 million. Under the Recovery Act, the program office will be spending almost that much every month.