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Keep up to date with the evolving world of government bidding with tips, best practices, trends, research and observations. Let BidNet's knowledge and experience work for you.

How Contracting with the Government Can Help Boost the Economy


How Contracting with the Government Can Help Boost the Economy

The economy of the United States is not as healthy as it was ten years ago.  While it is normal for economies to grow and contract over time, the financial crisis that began in 2008 has been particularly damaging to the American economy and recovery has been sluggish at best.  According to the U.S. Department of Commerce, the national economy decreased by 0.2% in the first quarter of 2015, before reversing course and growing by 2.2% in the fourth quarter. Despite the difficulty of current economic conditions however, one thing that remains certain is the necessity of government spending in the public sphere.

The American Recovery and Reinvestment Act

In 2009, President Obama signed the American Recovery and Reinvestment Act into law. This legislation was created in response to the economic crisis the U.S. was facing, and was rolled out with the goal of jumpstarting the economy. Under this Act, Congress appropriated funds to federal agencies that in turn provided the funds to state and local agencies to be used for contracts and grants, among other expenditures. Since the program’s beginning, the Federal government has dished out billions of dollars to states and agencies to help boost state and regional economies. According to Recovery.gov, the five states that awarded the most contracts between 2009 and 2012 were California, Maryland, Virginia, Texas and Colorado; combined, these states benefitted from an estimated total of $13.2 billion in federal funds that were passed on through contracts to local businesses in the states.

The charts below list the top ten states in terms of highest number of contracts awarded and amount of funds disbursed from 2009 to 2012:

Top 10 States listed by most contracts awarded, 2009-2012

State

# of Contracts

Funds Awarded

1. California

2,509

$4,195,968,628

2. Maryland

1,584

$2,741,678,554

3. Virginia

1,310

$1,913,437,011

4. Texas

1,266

$2,549,230,933

5. Colorado

1,034

$1,751,007,004

6. Oregon

1,001

$   578,548,956

7. Washington

982

$2,897,383,085

8. District of Columbia

850

$2,512,061,834

9. Georgia

822

$   619,381,443

10. New York

808

$1,317,941,207

 

Top 10 States listed by most funds awarded 2009-2012

State

# of Contracts

Funds Awarded

1. California

2,509

$4,195,968,628

2. Washington

982

$2,897,383,085

3. Maryland

1,584

$2,741,678,554

4. Texas

1,266

$2,549,230,933

5. District of Columbia

850

$2,512,061,834

6. Virginia

1,310

$1,913,437,011

7. South Carolina

323

$1,897,362,668

8. Colorado

1,034

$1,751,007,004

9. Tennessee

526

$1,626,138,482

10. New York

808

$1,317,941,207

*Source: “The American Recovery and Reinvestment Act.” Recovery.gov, n.d.  

You may have noticed that the ten states that received the highest amount of funds are not exactly the same as the ten states that reported awarding the highest number of contracts. The differences in these charts show that some contracts are worth more money, depending on the project or service being purchased, but also make it clear that the need for states to purchase various goods and services remains robust.

Working for the Government Helps Your Business – and the Economy

The government spends billions of dollars on goods and services every year. This is good news for you because it means that you could be awarded long-term contracts that could allow you to expand into other territories and maybe hire new employees. Another great aspect of working in the government sector is that the employees who work in those agencies will get to know who you are and what your business is all about, which may lead to them hiring you for personal business or recommending your company to other individuals and businesses, which also contributes to the overall strength of the economy.

Local, state and federal governments will always need to solicit all sorts of items, from equipment parts to vehicles, transportation to shipping services, or maintenance work and related supplies. - Importantly, the budgets that government agencies are given each year must be spent, or they may lose funding for the next year. The U.S. government is the largest purchaser of goods and services in the world and by awarding you contracts that align with your service offer they not only help your business, but stoke the fires of the national economy as well – good news for taxpayers, business owners and employees alike.

Danielle Calamaras | BidNet.com

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