ARPA Overview for Vendors Targeting Government Sales
The American Rescue Plan Act, or ARPA, is a follow up to the CARES Act. The ARPA overview is for organizations that sell to government. It is advantageous to know what ARPA is, who is eligible, and when funds are available.
Introduction to the American Rescue Plan Act
If you are selling into the government sector, you need to get to know the American Rescue Plan Act [ARPA]. In a nutshell, included in its $1.9 trillion dollar price tag is Covid relief funding for state and local governments. We have seen relief funding before with the CARES Act, however, nothing quite at this level. Not only are the dollar amounts large, but its spending guidelines are flexible. Plus, timeframes are considerably longer than its predecessor, setting the stage for a government spending spree. Many municipalities see this as a great opportunity to fund much needed technology upgrades, perform infrastructure enhancements, support public health initiatives, and more.
With such a vast list of potential expenditures and a ‘use it or lose it’ mentality, it’s a perfect time to target government prospects. In fact, it is doubtful that government agencies will ever see this type of money again…so, let the calling begin!
ARPA At-a-Glance
In March 2021, ARPA was signed by President Biden. The spending package includes $1.9 trillion for public health, stimulus to households, unemployment assistance, education, vaccine distribution, and more.
The Coronavirus State and Local Fiscal Recovery Fund [SLFRF] is part of ARPA. It is dedicated specifically to state and local jurisdictions, providing $350 billion in funding:
- $195 billion for states
- $130 billion for local governments
- $25 billion for territories and tribal areas
Besides the extraordinary amounts, it gives 19,000 municipal governments direct, non-competitive federal grant funds. These funds are available for technology modernization and must be spent by December 31st, 2024.
ARPA Eligibility
As we stated earlier in this ARPA overview, guidelines are loose and open for interpretation. According to the Treasury, recipients may use SLFRF funds to:
- Replace lost public sector revenue,
- Respond to the far-reaching public health and negative impacts of the pandemic,
- Provide premium pay for essential workers; or,
- Invest in water, sewer, and broadband infrastructure.
Distribution of ARPA Funds
Municipalities with populations greater than 50,000 will receive ARPA funds directly from the US Treasury. States are required to sub-allocate funding according to a per-capita formula to small municipalities with less than 50,000 residents. States who fail to sub-allocate funds will be penalized and ARPA allotments will be clawed back.
ARPA Reporting Requirements
Municipalities who receive direct ARPA funds must submit one Interim Report plus Quarterly Project and Expenditure Reports until December 31st, 2026. Best practices regarding compliance and reporting guidance include:
- Documenting how the cost and project was determined,
- Ensuring the money is spent how it was intended to be spent and retain supporting documentation; and,
- All procurement transactions must follow typical procurement processes and provide for full and open competition.
The US Treasury has published a Compliance and Reporting Guidance which provides additional detailed information beyond what is covered in this ARPA overview.
Plan to Sell as Governments Plan to use ARPA
Municipalities are in the planning stages of how they will spend their allocated funding, and there are opportunities galore. Remember, however, not everyone can be your customer. Keep your Serviceable Addressable Market [SAM] and Ideal Customer Profile [ICP] in mind when targeting the government sector. This will help you focus your time, efforts, and money wisely. Now, get calling…
Is your Growth Plan Out of Reach?