Stimulus money going elsewhere

photo by: File Photo

A Lawrence resident and Clinton Lake State Park camper lounges out with a book underneath a pavillion at the park Friday, July 31, 2009.

In what the Kansas Chamber of Commerce calls “a travesty,” out-of-state contractors are handling most federal stimulus work.

Granted, not all projects have been awarded.

But a check of a federal database listing contracts under the American Recovery and Reinvestment Act shows that more than 90 percent of the more than $52 million in work being done in Kansas is headed to non-Kansas firms.

The database doesn’t include contracts where funding was funneled through state agencies, such as for highways or housing projects.

From paint to picnic tables, federal agencies have awarded 31 contracts for Kansas projects. Nine of them went to Kansas businesses, garnering around 6 percent of the total $52 million.

Kansas Chamber of Commerce President and CEO Amy Blankenbiller called the numbers a “travesty.”

“When they say we are going to get this many dollars of federal money, you are hoping that it is coming to Kansas businesses, it is supporting our tax base, it is supporting our economy, it is providing the jobs we need and it is helping our state,” Blankenbiller said. “Seeing this has really sparked my concern about the fact that we are not getting clear and truthful information.”

Examples of out-of-state contracts for Kansas projects include:

• A McAlester, Okla., company providing $25,000 worth of picnic tables for Clinton Lake.

• A Rock Island, Ill., company being paid $200,000 for paint at Fort Leavenworth.

• A Chicago firm hired to do $300,000 worth of design work to make the Robert Dole U.S. Courthouse in Kansas City, Kan., more energy efficient.

“It is hard to imagine we have zero qualified companies or industries here in the state,” Blankenbiller said of some of the contracts that went out of state.

The contracts from the federal database are the earliest to be funded under the Recovery Act, and federal agencies expect a flood of additional contracts in the next several months.

Officials with these agencies said they aren’t allowed to give preference to companies in the home state, but they do consider factors such as whether the company is a small business, in a distressed area or owned by a veteran, a minority or a woman.

In a written statement, U.S. Rep. Dennis Moore, D-Kan., said he would prefer that projects go to in-state companies, but he recognizes each agency has its own bidding process that must balance the company’s size, expertise and location.

“In the end, though, these projects create jobs throughout the country and make investments in our communities — and that benefits everyone,” he said.

The largest out-of-state contract under the Recovery Act — $24 million — was awarded to a Tampa, Fla., company called Treviicos South Inc. Since 2005, the company has worked on a $175 million U.S. Army Corps of Engineers project to make Tuttle Creek Dam near Manhattan earthquake-proof.

Without the stimulus money, the project would have had to shut down until funding was renewed in the next budget cycle, which could have been as late as October.

Under the contract with Treviicos, the corps was facing delay costs of a half-million dollars a month — a price the corps already was paying while the project was partially shut down this spring.

Few companies in the country, even in the world, are qualified to do the work at Tuttle Creek, according to corps Kansas City civil branch manager John Holm.

Other large out-of-state contracts include an El Paso, Texas, company that is being paid $10 million for mine remediation work in Baxter Springs in extreme southeastern Kansas.

Stanger Industries, a Kansas City, Mo., company, was awarded $3.8 million to replace the heating and cooling system at the federal courthouse in Wichita.

In the past, the U.S. General Services Administration hasn’t had success with Wichita-based businesses bidding on projects, GSA regional recovery executive Linda Phillips said.

And projects funded with Recovery Act money had to move fast. Specifications for projects went to a list of companies that were already qualified by the government.

“A lot of this work was put out this way in order to put it out quickly to get more people working more quickly,” Phillips said. “If we go out and start from scratch, it takes a lot longer.”

Not every contract went out of state.

Kaaz-Lexeco Construction Companies in Leavenworth was given a $1.3 million contract for parking lot and road repair work at Fort Leavenworth.

The company was also hired by The Ranger Group, a Waldorf, Md., company of disabled veterans that was awarded a contract to remodel the military base’s chapel.

The work financed by stimulus money allowed the company to keep 10 to 15 employees working, a sizable chunk for a company that has about 40 people in the field during the peak construction season.

“We are very happy with Fort Leavenworth and the way people are employed up there,” company vice president Jody Kaaz said.

Even when work does go out of state, Phillips said, many of it returns through subcontractors.

“When it comes to the actual constructions, those will probably be local people doing the actually physical work,” she said.

Still, Blankenbiller sees it as Kansas businesses losing money.

“At every point as you go from the primary to the secondary or third- or fourth-level contractor, clearly they are not reaping the greatest benefit,” Blankenbiller said.