December 30, 2008

By: Jisha V. Dymond

The Obama Economic Stimulus Package and Pay-to-Play

The incoming Obama administration and members of Congress are reportedly close to an agreement on the principles of an economic stimulus package.  The costs of the plan have been reported to be anywhere from $800 billion to $1.2 trillion.  So what does this have to do with pay-to-play? A major part of the plan includes making $25 billion immediately available for infrastructure projects, including rebuilding roads, bridges and schools.  Indeed, as evinced by the letters written yesterday by several governors, including the governors of New York and New Jersey, many states are in such financial turmoil that the only hope for some infrastructure projects is this stimulus money.  Of course contractors are needed to actually build these roads, bridges and schools. The stimulus plan does not, at this point, specify whether federal dollars will allocated for specific projects, or whether states will be given grants to complete the projects as they see fit. Either way, pay-to-play laws should be on every contractor’s radar screen. Federal contractors are prohibited from making political contributions to a federal candidate, a political party or a political committee. (A federal contractor is also prohibited from using appropriated federal funds to pay any person to lobby federal officials.)   Additionally, many states, including New Jersey and Connecticut, have restrictions on eligibility for state contracts based on political contributions the business entity or affiliated persons make. In these tough economic times, don’t let pay-to-play restrictions get in the way of what could be a significant contract.

Tags: New JerseyFederal