Stimulus for tech and telecom $3B, but jobs still guesswork

Onvia estimates stimulus spending has created about 8,000 such jobs

WASHINGTON -- The U.S. government has spent about $700 million on IT and telecommunications products and services under its economic stimulus program, part of a total of $3 billion that's in the spending pipeline, according to a private analysis of this data. But how many jobs have been created is not as clear.

Congress approved $787 billion in February to promote job growth and the White House recently claimed that some 600,000 jobs have been created by the stimulus spending so far. But the government data, made available through Recovery.gov, provides no details about the types of jobs and salaries and uses formulas to estimate the job impact.

Onvia Inc., which tracks government contract spending and has set up a separate site, Recovery.org, to look at stimulus spending specifically and has tallied the amount of technology spending (Update: As of 2010, Recovery.org was no longer a site that tracks federal stimulus spending.). It calculates spending, and planned spending, based on actual contracts, or parts of contracts, that have allocated funding for IT and telecommunications communications and services.

The companies receiving stimulus funds report the number of direct jobs created, but don't estimate the indirect help. For instance, the U.S. Social Security Administration is upgrading some IT equipment with money from the stimulus, but according to reports on three projects underway in Maryland, which represent just a fraction of the agency's tech spending, only 17 jobs were created or saved on about $11 million in spending.

IBM was awarded in September a Social Security Administration contract, worth about $8.5 million, to upgrade systems around the country. IBM put the number of jobs created or saved at 16.8 is based on a combination of formulas developed by IBM and the White House, according to the company's filing. Oracle Corp. reported from the same agency a contract of $1.25 million that didn't cite any jobs created. Similarly, Hewlett-Packard Co., didn't report any jobs also for a $1.25 million computer equipment contract.

Onvia estimates that the direct stimulus spending has created just under 8,000 tech and telecom jobs, but this is a calculation based on a White House formula that says for approximately every $92,000 in recovery dollars spent, one job is created or saved, said Michael Balsam, the chief solutions officer of Onvia.

The government's formula attempts to look at indirect job creation that stem from direct awards, but Balsam has questions about way the government is reporting its data. The U.S. job creation claims is not based on actual contract awards, said Balsam. "Only 25% of that [stimulus] money has actually left Washington," he said.

That may help explain why newspapers such as the Milwaukee Journal Sentinel are reporting that that U.S. claims that 10,000 jobs were saved or created in Wisconsin "rife with errors, double counting and inflated numbers based more on satisfying federal formulas than creating real jobs."

The newspaper came to this conclusion after looking at some of the local job creation reports. Other newspapers are turning up similar findings after examining local project spending.

Copyright © 2009 IDG Communications, Inc.

 
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