1. 2010
THE NEXT ECONOMY:
Government Market Outlook Report
© 2010 Onvia, Inc. All rights reserved.

2. CONTENTS
EXECUTIVE SUMMARY 3
INFRASTRUCTURE 6
Highways and Ports 6
Transportation Reauthorization Status 8
Transit 9
ENERGY 11
INFORMATION TECHNOLOGY 13
Healthcare IT 13
Broadband 14
STIMULUS AND RECOVERY 17
2010 ARRA Impact 17
Jobs for Main Street 18
CONCLUSION 20
AUTHORS 21
2010 PROJECT HIGHLIGHTS 22
2009 TOP CONTRACTORS 23
GLOSSARY 25
THE NEXT ECONOMY: 2010 Government Market Outlook 2

3. EXECUTIVE SUMMARY
In 2009 trillions of dollars were spent stabilizing the economy through
the Troubled Asset Relief Program (TARP), The American Recovery and
Reinvestment Act (ARRA), Cash for Clunkers and other government-funded
programs.
This trend will continue through 2010 with initiatives Economy” companies that ignore the government
like the Jobs for Main Street Act. Spending by sector will be significantly disadvantaged. Businesses
federal, state and local governments now represents that are not doing business in the government
almost half of total GDP in the United States and that marketplace are guaranteed to have one or more
percentage is expected to increase in the coming competitors who are.
years.
Doing business with the government is no longer
Regardless of where business owners and an arcane process reserved only for those companies
managers fall on the political spectrum, a new with perseverance, tolerance for bureaucratic red tape
reality has set in. A hybrid economy, one in which and a cadre of lobbyists. Barriers to entry have come
government and business operate more closely, down. For companies that don’t do business directly
is emerging. Forward-thinking organizations now with a government entity, subcontractor and supplier
incorporate the government sector into their overall go- opportunities continue to abound from companies that
to-market strategy to take advantage of this large and are doing business with government entities in the
growing marketplace. That approach is independent of United States. With national unemployment above 10
rhetoric or political views about big government, small percent, more and more businesses are turning to the
government and conservative or liberal views. The government sector as a primary source of revenue.
government sector is a vast marketplace. In this “Next
U.S. Government Spending As Percent of GDP THE FEDERAL, STATE
U.S. Government spending has steadily increased to its highest sustained levels. & MUNICIPAL MARKET
60 $5.5 Trillion a year.
$105 Billion per week.
50
$15 Billion a day.
40
$625 Million an hour.
Percent of GDP
30 $10 Million a minute.
$175,000 a second.
20
10
“The government has moved in
next door and it ain’t leaving.”
0
1903
1906
1909
1912
1915
1918
1921
1924
1927
1930
1933
1936
1939
1942
1945
1948
1951
1954
1957
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2009
Year — Jeffrey Immelt, International
Economic Forum of the
Source: USGovernmentSpending.com Americas, June 9, 2009
THE NEXT ECONOMY: 2010 Government Market Outlook 3

4. EXECUTIVE SUMMARY
In this report, Onvia’s fourth annual analysis of the with large general contractors will emerge as the large
government marketplace, we surveyed thousands of players are extended across multiple infrastructure
government officials across every level of government. projects. Volume of projects will increase through 2010
We partnered with REMI, the definitive leader in but it will remain a buyers’ market as more companies
economic forecasting and policy analysis modeling, follow the money. The impact of recovery investments,
to examine the impact of ARRA funding on regional both ARRA and Jobs for Main Street, will begin to be
economies in the U.S. as a harbinger of things to felt in mid-2010 as heavy equipment manufacturers,
come in the government sector. material suppliers and engineering service providers
fully engage in the government purchasing process.
There are several emerging, general government Look for a measurable rise in the cost of construction
market trends which will influence capital allocation materials.
and projects undertaken. First, transparency initiatives
are here to stay. Government spending at all levels will Third, information technology will be a key
continue to be scrutinized, and public officials will be component of all projects undertaken, across
held to a higher level of accountability for the inefficient multiple verticals. A wave of modernization, from
allocation of taxpayer capital. Access to more detailed regional health information networks and intelligent
information will drive the transformation from the transportation systems to smart power grids coming
retrospective “auditor” view to one better positioned online and green buildings being constructed, is
to be predictive in support of strategic planning. afoot with information technology at its core. Further
Governments will invest in tools to drive down cost and expansion of electronic procurement and cooperative
increase productivity. purchasing practices by government agencies will
continue to be implemented to improve efficacy of
Second, while the government market continues spending.
to grow there will be increased competition for
government contracts as commercial markets recover With these components as the backdrop, our
into 2011. An increase in subcontracting opportunities analysis for 2010 focuses on impacts in three major
Businesses Pursuing Government Contracts
2010 SPENDING PRIORITIES
Government is the last client standing for many businesses that otherwise Defined by Surveyed Officials
relied on the commercial sector. This chart represents activity with state and
local agencies tracked in the Onvia 200 index.
Public Safety
Infrastructure
40,000 12% Energy
35,000 Unemployment (%)
10% Information Technology
# Unique Businesses
30,000
% Unemployed
8%
Education
25,000
20,000 6%
15,000
4%
“The frontier between the
10,000 state and market has shifted,
5,000
2% the realm of the state has
0 0%
been enlarged.”
Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
— Daniel Yergin, Wall Street
Period Journal, After the Bailouts,
Washington’s the Boss,
Source: Onvia 2010 December 28, 2009
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5. EXECUTIVE SUMMARY
areas of upcoming spending: Infrastructure, Energy
and Information Technology.
In its first year in office, the Obama administration
has taken on the mantle of change and begun
executing on its reform agenda across healthcare,
manufacturing and energy, as well as the financial
markets and other sectors. These changes and their
impacts are now spreading through the state- and
municipal- level government markets, and none will
take place without significant business engagement.
THE NEXT ECONOMY: 2010 Government Market Outlook 5

6. INFRASTRUCTURE
2010 will prove to be a strong year for government the 2010 contribution of highway spending to regional
contractors who serve the infrastructure market. economic productivity will increase over 2009
Although 2009 saw considerable activity with the spending levels.
obligation of ARRA dollars, the majority of the actual
Throughout 2009, Onvia analysis found that
spending on those ARRA-funded projects will happen
infrastructure projects came in below estimated costs
in 2010. Of the more than 35,000 infrastructure
driven by a combination of stiff competition and falling
projects Onvia tracked throughout 2009 only 27
construction material prices. Some of these savings
percent, or 9,500, had been awarded to contractors by
served to expand the scope of projects funded by
the end of 2009.
ARRA .
$90.4 billion across 25,500 fully or partially recovery-
According to the American Road & Transportation
funded projects are in the pipeline and expected to
Builders Association (ARTBA), 38 states increased
begin in 2010. This represents a meaningful leading
the real value of their contract awards between
indicator for the infrastructure market in the year
January and October 2009 compared to the same
ahead. It is important to note that recovery dollars
time period in 2008. The real value of contract awards
are funding projects in conjunction with traditional
for highways and bridges over the same periods was
matching funds programs.
nearly $50 billion, an increase of $5 billion and an
As these outstanding dollars reach local economies, important leading indicator for the 2010 construction
expect to see resulting direct and indirect infrastructure season. Expect these trends to carry into 2010 as
job creation to exceed 900,000. The Southeast is more contractors vie for government projects.
expected to produce the most jobs with the Great
Highways & Ports
Lakes region setting the pace for average salaries.
Spurred by record federal investment in surface
With continued strong government investment in
transportation and increased spending through the
infrastructure through economic recovery initiatives,
ARRA, the highway construction market is expected
2010 ARRA Infrastructure Jobs ARRA Infrastructure Spending
More than 900,000 infrastructure jobs will be retained or created as a result of The majority of stimulus spending will hit
2010 ARRA spending. the economy in 2010.
300,000 $70,000 27%
Number of Jobs Created
Average Salary Per Job
$60,000
250,000
$50,000
200,000
$40,000
150,000 Average Salary Per Job
$30,000 73%
100,000
$20,000
50,000 $10,000
$0
2009 Contract Awards
0
Southeast Far Mideast Great Plains Southwest New Rocky $33,123,839,733
West Lakes England Mountain
U.S. Region 2010 Project Pipeline
$90,447,420,169
Source: Onvia and REMI 2010 Source: Onvia 2010
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7. INFRASTRUCTURE
to grow 8 percent in 2010 as only two states, New investment in smart roads, otherwise known as
Hampshire and Wyoming, had obligated all of their intelligent transportation systems (ITS), will expedite
transportation stimulus funds by the end of 2009. With job creation.
the addition of the prospective Jobs for Main Street
ITS initiatives are proven to produce significant
Act passed by the U.S. House of representatives in
economic and environmental advantages. State and
December 2009, an increase from 8 percent to double-
local agencies investing in ITS, for example, have
digit growth is not out of the question.
found that each dollar spent on technologies such as
As of January 2010, Onvia was tracking more than E-Z Pass programs and synchronized and adaptive
12,500 funded highway projects across the US, many traffic signals returns at least $40 to the public in time
of which are much needed maintenance efforts and and fuel savings while reducing emissions by as much
upgrades that had previously been deferred. as 22 percent.
According to the Reason Foundation, the percentage In advance of the Jobs for Main Street bill,
of deficient bridges has been on the rise and the an American Association of State of Highway
condition of urban interstates continues to degrade. Transportation Officials (ASHTO) survey captured
In their December 2009 Report on the Performance a summary view of the 9,588 ready-to-go (formerly
of State Highway Systems, a number of key metrics known as “Shovel Ready”) highway, transit, rail, port
improved, such as urban interstate congestion, but and aviation projects across the U.S. awaiting funding.
the findings highlight the difficulty in “making across These projects, valued at $70 billion, can be ready to
the board progress in road conditions.” The thousands break ground within 120 days of enactment.
of ARRA funded projects, many of which will start in
Infrastructure-related businesses of all sizes should
2010, are targeted to address the substandard areas
be poised to capture contracts and to serve as indirect
of the nation’s transportation infrastructure.
beneficiaries through subcontracting, materials supply
Beyond traditional highway construction, increased and heavy equipment manufacturing.
ARRA Actual Contract Values As Percent of Government
Estimated Project Value
2010 ARRA Infrastructure GDP
Competition for projects has increased resulting in lower contract values than by US Region
expected on many projects.
FAR WEST: $13 Billion
80 SOUTHEAST: $12 Billion
GREAT LAKES: $6 Billion
Actual Contract Values As Percent
of Gov’t Estimated Project Value
72
PLAINS: $3 Billion
64 MIDEAST: $7 Billion
SOUTHWEST: $5 Billion
56
ROCKY MOUNTAIN: $2 Billion
48 NEW ENGLAND: $2 Billion
40
March April May June July Aug Sept Oct Nov Dec
2009
Source: Onvia 2010 Source: Onvia and REMI 2010
Source: Onvia 2010
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8. INFRASTRUCTURE
The Jobs for Main Street Act builds on the $10.7 billion in additional funding, which resembles
investment programs initiated by the ARRA. Of the the authorization for FY 2009. The bill also includes
almost $37 billion in proposed transportation funding provisions to stabilize the Highway Trust Fund by
in the Jobs for Main Street Act, $27.5 billion is directed restoring $19.5 billion in forgone interest payments
to additional highway infrastructure investments. In and adds $1.7 billion based on accounting changes
keeping with the 2009 stimulus package, the terms for fuel tax exemptions. In keeping with the ARRA, the
and conditions for these funds focus on expediting legislation waives the requirement that states provide
contracts with businesses. States will lose 50 percent matching revenue to receive these funds.
of any funding that is not under contract within 90
Many states are concerned about the lack of a
days of apportionment. In addition, there is a stated
prospective reauthorization spending bill going into
priority to focus on projects in economically distressed
2010. Although the Obama administration says states
areas and those that can be completed within a 3-year
shouldn't be concerned that a new law is not yet
timeframe.
in place, there is growing anxiety as transportation
Transportation Reauthorization Status improvement plans are left in limbo. Planning for
a new bridge, highway interchange or light rail line
The Jobs for Main Street Act includes an extension typically takes years, and states need early insight
of highway and transit program authorization through into how much the federal government will invest in
Sept. 30, 2010 at current levels. It also provides transportation.
additional Highway Trust Fund revenue to fund these
programs. Since SAFETEA-LU expired on Sept. 30, Without a reauthorized transportation spending bill
2009, these programs have been extended on a short- in place, "Our industry surveys tell us that contractors
term basis at a funding level that is significantly below won't be able to do long-term planning to purchase
the FY 2009 authorized level. equipment," said Jeffrey Solsby, spokesman for the
American Road & Transportation Builders Association.
The pending Jobs for Main Street Act includes
US Transit Buses By Alternative Fuel Type
Sales opportunities for new and retrofitted energy efficient fleets continues to
increase.
14,000
CNG & Blends 12,000 50% of Agencies are
Number of Vehicles
Electric & Hybrid 10,000 Currently Using eGovernment
LNG & Blends
8,000
Tools and an Additional 20%
6,000 are Actively Considering
4,000 Implementation
2,000
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Year
Source: Public Transportation Fact Book 2008
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9. INFRASTRUCTURE
Based on spending levels from existing stimulus and in alternative fuel vehicles to increase efficiency,
other recurring programs, Transportation Secretary support green transit and drive down operating
Ray LaHood remains confident that the billions of costs. In addition to increased federal investment in
dollars in the pipeline for road, bridge and transit mass transit initiatives beyond traditional dollars for
projects will suffice until a new law is in place. highways, government fleets are also driving toward a
greener economy.
Transit
Businesses that will see growing demand include
In the face of an economic downturn with high vehicle manufacturers, fleet maintenance providers,
unemployment, overall mass transit ridership is the alternative fuels supply chain as well firms
down as fewer people are traveling to and from specializing in energy performance audits and
work. Similar to unemployment mass transit use is management.
a lagging economic indicator. As result, the majority
of transit systems have seen a decrease in funding Infrastructure Jobs for Main Street
from state, local and regional programs. But aided by
The Jobs for Main Street Act allocates $8.4 billion for
the significant transit funding through the ARRA as
transit funding, the majority of which will be distributed
well as the Jobs for Main Street, prospects are strong
via formula grants, which are based on predetermined
for new light rail systems as we continue to see the
criteria, such as population. $800 million is proposed
benefit of economic regeneration of transit corridors
for Amtrak fleet modernization and $1.75 billion is also
such as those in Washington, D.C., Denver, Colorado
proposed for fixed guideway modernization, which
and Portland, Oregon. Moving into 2010, less than half
refers to any transit service that uses exclusive or
of the approximately $7 billion in transit investment
controlled rights-of-way or rails, entirely or in part.
dollars made available through the ARRA are under
This includes heavy rail, commuter rail, light rail,
contract.
monorail, trolleybus, aerial tramway, inclined plane,
Transit agencies across the country are investing cable car, automated guideway transit, ferryboats, that
Federal Alternative Fuel Vehicles By Fuel Type
The federal government has been rapidly expanding its AFV fleet.
“Efficiency and renewable
incentives and financing
150,000
E-85 programs have the most
Number of Vehicles
120,000 CNG
small business and job
90,000
LPG
creation opportunity here for
Electric
LNG
2010 and beyond.”
60,000
H2
30,000 M-85
— Government Official Survey
0 Participant, December 2009
2000 2001 2002 2003 2004 2005 2006 2007 2008
Year
Source: www.afdc.energy.gov/afdc/data/ 2008
Source: www.afdc.energy.gov/afdc/data/ 2008
THE NEXT ECONOMY: 2010 Government Market Outlook 9

10. INFRASTRUCTURE
portion of motor bus service operated on exclusive or
controlled rights-of-way, and high-occupancy-vehicle
(HOV) lanes. In comparison, the ARRA provided $750
million for the Fixed Guideway Modernization formula
program.
Fixed guideway modernization projects typically
include purchase and rehabilitation of rolling stock,
track, line equipment, structures, signals and
communications, power equipment and substations,
passenger stations and terminals, security equipment
and systems, maintenance facilities and equipment,
operational support equipment including computer
hardware and software, system extensions, and
preventive maintenance.
As with the proposed highway funding, states
will lose 50 percent of any funding that is not under
contract within 90 days of apportionment. In addition,
there is a stated priority to focus on projects in
economically distressed areas and those that can be
completed within a 3-year timeframe.
PRIMARY INFRASTRUCTURE PURCHASING CATEGORIES
Infrastructure: Roadway, Bridge and Tunnel Contractors
Heavy Equipment
Signage and Supplies
Environmental Consulting
Engineering Services
Transportation & Traffic Studies
Transit: Rapid Transit Vehicles
Buses
Specialty and Vocational Vehicles
Fleet Operations and Maintenance
CCTV
Security Services
THE NEXT ECONOMY: 2010 Government Market Outlook 10

11. ENERGY
According to the Department of Energy, every $1 the Company received a $200 million ARRA grant as
government spends on state energy programs results part of the Energy Smart Florida initiative to advance
in energy cost savings of $7.22. Smart Grid, including the installation of over 2.6
million smart meters, 9,000 intelligent distribution
As of January 2010, Onvia was tracking 2,700 devices and advanced monitoring equipment in over
energy-related initiatives funded partially or in full by 270 substations. With a total project value exceeding
$13.5 billion from ARRA, which will create jobs in 2010 $575 million, the effort will be completed in 2011.
and lay the foundation for energy efficiency, renewable General Electric will supply the meters, Silver Spring
energy, upgrades to electricity transmission, carbon Networks will provide the wireless network and Cisco
capture and storage and advanced energy research. will provide networking capabilities. The proposed
The ARRA allocated $40 billion for energy initiatives, meters will be based on open network architecture,
with several billion more likely through the Jobs for so companies can create consumer applications like
Main Street Act. Most of this funding is required to Google PowerMeter that use smart meter information
be spent within the next two years. Congress has to measure and manage energy consumption.
also allocated $1.6 billion for Clean Renewable
Energy Bonds (CREBs) to help finance construction In 2009 a number of states created specially
of renewable energy facilities run by public utilities, focused teams and programs to maximize the impact
electric cooperatives and city, state and tribal of federal energy programs across regional and local
governments. economies.
In 2010, pilot groups of consumers and businesses These include initiatives to support small businesses
will continue to be fitted with smart meters and various and industry through energy savings. States are
accessories to begin smart grid pilot programs. Other creating programs to provide technical and financial
initiatives, like Energy Smart Miami, will begin to assistance to businesses who proactively address
demonstrate larger scale implementations of citywide energy efficiency, including grants for commercial
smart grids. In November 2009, Florida Power & Light institutions that adopt alternative energy means such
2010 ARRA Energy Jobs
2010 ARRA Energy GDP
More than 100,000 energy jobs will be retained or created as a result of 2010
by US Region
ARRA spending.
FAR WEST: $1 Billion
70,000 $70,000 SOUTHEAST: $3 Billion
Number of Jobs Created
Average Salary Per Job
60,000 $60,000
50,000
GREAT LAKES: $400 Million
$50,000
40,000 $40,000 PLAINS: $120 Million
30,000 $30,000
Average Salary Per Job
MIDEAST: $670 Million
20,000 $20,000
10,000 $10,000
SOUTHWEST: $400 Million
0 $0 ROCKY MOUNTAIN: $160 Million
Southeast Far Mideast Great Plains Southwest New Rocky
West Lakes England Mountain NEW ENGLAND: $200 Million
U.S. Region
Source: Onvia and REMI 2010
Source: Onvia and REMI 2010 Source: Onvia and REMI 2010
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12. ENERGY
as solar, wind power and biomass. States are seeking innovations around renewable
energy technologies and resources. Look for
States are also focusing on improving government continued creation of grant programs to foster the
energy efficiency. Upgrades will address maintenance development and commercialization of technology that
and renovation projects at state agencies, universities supports green business.
and community colleges. The targets for these efforts
are initiatives that generate significant energy savings, Energy initiatives will continue to grow and garner
including retro-commission HVAC controls, lighting recognition through 2010 as the flow of funds from
fixture upgrades, boiler and water heater improvement ARRA and Jobs for Main Street Act reach businesses
and incandescent exit light and bulb replacement. that drive the Next Economy.
Other programs promote residential energy
efficiency and renewable energy. Housing authorities
are promoting energy efficiency in new, affordable
housing including manufactured homes. In addition,
many states will subsidize energy efficiency
audits for those homes that implement energy
recommendations.
PRIMARY ENERGY PURCHASING CATEGORIES
Generation: Plant Asset Management Software
Load Forecasting
Generation Plan and Scheduling
Transmission & Grid Asset Management Software
Distribution: Capacitors
Outage Management
GIS
Energy Management Systems
Distribution Management Systems
Energy Balance Management
Metering: Advanced Metering Infrastructure
Meter Asset Management
Meter Data Processing
Automated Meter Management
Smart Meters
Pulse Meters
Switches and Routers
Net Metering
Smart Appliances
Building Automation Software That Integrates and Normalizes Data From:
Systems: Building Systems, IT, Energy Supply & Energy Demand
Security Identity management and access control
Technology: Threat defense
Data center security
Utility Compliance
Security monitoring and management
Physical safety and security
Professional services
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13. INFORMATION TECHNOLOGY
Advances in intelligent transportation systems, Grants for electronic healthcare initiatives are
energy efficiency and patient care are all dependent expected to flow in earnest during the second half of
on technologies that outpace the industries they serve. 2010, setting up 2011 as a breakout year for eHealth
With healthcare and energy front and center on the initiatives. In the next twelve months, there will be an
domestic agenda, technology firms of all types will increased emphasis on digitizing medical records as
benefit. Almost $20 billion in healthcare technology standards and strategies fall into place. There will a
spending was included in the ARRA and $80 billion will considerable number of new entrants in the eHealth
be spent on energy-related initiatives approved in 2009. marketplace as venture-backed startups figure out how
Funds from healthcare, energy and other programs are to create businesses on top of previously unavailable
now funneling down to the commercial entities that will data and platforms.
be the pioneers of Next Economy technologies.
Building on the $19 billion investment in the ARRA,
Healthcare IT the Administration will continue efforts to further the
adoption and implementation of Health IT (HIT) as
“2010 will be about laying the eHealth groundwork,
an essential tool to modernize the U.S. health care
particularly at the local and regional levels, in order to system. $2 billion in ARRA investments will continue
develop a nationwide support structure to ensure that to be implemented in 2010, while the remaining
providers and hospitals are prepared for 2011 when the $17 billion will be available as temporary incentive
electronic health record incentive programs launch,” payments starting in 2011 to physicians and hospitals
says Brian Wagner, Senior Director of Policy and participating in Medicare for using certified Electronic
Public Affairs at the eHealth Initiative in Washington, Medical Records.
D.C. “Now is the time for companies that serve the
eHealth market, both as a primary and secondary With no industry standard for the use or sharing of
focus, to develop and burnish their reputations. There Electronic Health Records (EHRs) widely in practice,
is a lot of money in the queue, but that comes with high each medical facility is an island, using whichever
expectations that companies will have to meet.” method of record storage they chose. Strategies for
Estimated ARRA Health IT Spending
PRIMARY IT PURCHASING CATEGORIES
$40 Healthcare IT: Core Routing And Switching
Wireless Infrastructure
$35 Network Security
Storage Solutions
$30 Collaboration Solutions
Telemedicine Solutions
$25
Communication Solutions
Wireless Solutions
Billions
$20
Core Infrastructure
$15 Interoperability Solutions
$10
$5
$0
FY 2009 ‘15 ‘19
Source: Congressional Budget Office 2009
Source: Congressional Budget Office 2009
THE NEXT ECONOMY: 2010 Government Market Outlook 13

14. INFORMATION TECHNOLOGY
hospital record keeping range from paper records agencies have until September 2010 to award all
to highly integrated eHealth systems which cover funding.
patients from admittance to billing, and everything
In 2010, technology providers will be vying for
in between. This lack of standardization cripples
the business of doctors and hospitals, which will
information sharing in an industry where time often
have significant incentives to make meaningful use
means the difference between life and death.
of eRecords in 2012. Technology providers and
In addition to a lack of standards, there is a healthcare providers need to determine the best time
significant gap in digital connectivity between the to get in the game. Those that wait too long may be
medical professionals and the data and images caught far behind what is a rapidly advancing curve.
on which they rely to do their jobs. Without ample
Broadband
broadband availability across the U.S., there is no
way for EHRs to be used effectively. The infrastructure The expansion of broadband access across the US
necessary to achieve electronic data exchange does will be a significant contributor to economic growth
not exist in most states. The ARRA-provided funding and global competitiveness. As part of the ARRA,
that will directly impact the adoption of broadband several billion dollars have been allocated to create
service and electronic health records. broadband-enabled jobs, close the broadband gap,
stimulate investment in broadband, spread high-speed
At the end of 2009, the government took several
access to schools, universities, libraries, community
critical steps toward a nationwide, interoperable,
centers, job training centers, hospitals and public
private and secure electronic health information
safety personnel in addition to encouraging demand
system. The U.S. Department of Health and Human
for broadband.
Services (DHHS) released two proposed regulations
affecting HIT. The first, a notice of proposed rule- The first step in designing a national broadband
making (NPRM), describes how hospitals, physicians, strategy is an inventory initiative intended to inform
and other health care professionals can qualify for policymakers' efforts and provide consumers with
billions of dollars of extra Medicare and Medicaid improved information on the broadband Internet
payments through the meaningful use of EHRs. The services available to them. The ARRA provided up
second, an interim final regulation, describes the to $350 million to develop and maintain a broadband
standards and certification criteria that those EHRs inventory map. In order to build a national strategic
must meet for their users to collect the payments. In plan, states have been tasked with gathering and
addition, between August and December 2009, the verifying state-specific data on the availability, speed,
DHHS Office of the National Coordinator for Health location and technology type of broadband services.
Information Technology announced nearly $2 billion The data they collect and compile will also be used to
worth of new programs to help providers become develop publicly available state-wide broadband maps
meaningful users of EHRs and to lay the groundwork and to inform the comprehensive, interactive, and
for an advanced electronic health information system. searchable national broadband map that the National
All these actions were authorized by the Health Telecommunications and Information Administration
Information Technology for Economic and Clinical (NTIA) is required by the Recovery Act to create and
Health (HITECH) Act, which was part of the ARRA. make publicly available by February 17, 2011.
The formalization of these regulations brings a In 2010, inventory mapping efforts will accelerate
higher degree of clarity to the Health IT roadmap, with and create short-term opportunities for:
investments expected to ramp up in 2011 and funding
available through the middle of this decade. Federal • Early stage expansion of broadband
THE NEXT ECONOMY: 2010 Government Market Outlook 14

15. INFORMATION TECHNOLOGY
NEW REGULATIONS AND PROGRAMS CREATED BY THE HITECH ACT
New Regulations Description
Meaningful Use Criteria established for Medicare- and Medicaid-participating providers and hospitals to receive
(issued) incentives for using electronic health records (EHRs) in a meaningful manner, which includes
electronically capturing health information in coded format, using that information to track
key clinical conditions, communicating that information in order to help coordinate care and
initiating the reporting of clinical quality measures and public health measures.
Certification A defined process of ensuring the functionality, security, and interoperability of EHRs that meet
(forthcoming) the standards and certification criteria required to achieve meaningful use of those records.
Providers must use certified EHRs to qualify as meaningful users.
Interim final regulation An initial set of standards, implementation specifications and certification criteria for EHRs.
for certification
criteria and standards
(issued)
Funds
New Programs Description
Allocated
Regional Extension Establish up to 70 RECs to support providers in adopting and becoming $643 Million
Centers (RECs) meaningful users of health information technology (HIT).
Health Information Support state programs to ensure the development of health information $564 Million
Exchange exchange within and across their jurisdictions.
Workforce Training Create several distinct programs that aim to support the education $118 Million
Programs of HIT professionals, including curriculum development, competency
examinations, and training. The goal is to train up to 45,000 new HIT
workers to assist providers in becoming meaningful users of EHRs.
Beacon Communities Provide funding to create up to 15 demonstration communities in which $235 Million
clinicians, hospitals, and consumers show how the meaningful use of
EHRs can achieve measurable improvement in the quality and efficiency
of health services or public health outcomes in a given geographic area.
Strategic Health Fund research focused on achieving breakthrough advances to address $60 Million
Information well-documented problems that have impeded the adoption of HIT,
Technology Advanced including: the security of HIT, patient-centered cognitive support, health
Research Projects care application and network platform architectures, and secondary use
(SHARP) of EHR data.
Nationwide Health Create a common platform for health information exchange across
Information Network diverse entities, within communities, and across the country to promote
(NHIN) a more effective marketplace, greater competition, and increased choice
through accessibility to accurate information on health care costs, quality
and outcomes.
$64.3 Million
Standards and Develop interoperability specifications that identify harmonized standards
Certification and provide detailed technical specifications for how those standards
need to be used; work with health care organizations and standards-
development organizations to ensure the standards are available for use
nationally.
THE NEXT ECONOMY: 2010 Government Market Outlook 15

16. INFORMATION TECHNOLOGY
infrastructure. As with many of the new programs established
through ARRA, timelines have progressed slower
• Acquisition of equipment, instrumentation, than expected. Scheduling and staffing challenges
networking capability, hardware and software, have delayed the review of broadband applications.
digital network technology and infrastructure for In order to award the $4.7 billion appropriated for
broadband services. Broadband Technology Opportunities Program by
September 30, 2010, NTIA and Rural Utilities Service
• Access to existing broadband service by
(RUS) must evaluate applications and award funds in
community anchor institutions.
a compressed time frame. The effort is complicated by
• Access to existing broadband service by low- the fact that NTIA and RUS also face an increase in
income, unemployed, aged, and otherwise the number of applications that they must review and
vulnerable populations in order to provide evaluate in comparison to similar programs.
educational and employment opportunities to
members of such populations.
THE NEXT ECONOMY: 2010 Government Market Outlook 16

17. STIMULUS & RECOVERY
As we move into 2010, the federal government (direct effect), while the other half consist mainly of
continues to grapple with the best equation for Intermediate Demand Employment (indirect effect) and
reviving the economy without completely sacrificing Local Consumption Demand Employment (induced
sustainability through the national debt burden. effect).
Politicians, businesses and citizens alike are divided
The growth in government spending increases
over the merits of big government and big spending
employment and raises real disposable income,
versus tax relief and economic Darwinism.
which drives consumption and ultimately the output
2010 ARRA Impact for at least as long as those funds are flowing into the
economy. Consider this example: a road repavement
Although the ARRA passed in early 2009, the project increases the demand for construction workers
majority of the impact will be felt in 2010 as the and materials. As the workers’ real disposable income
dollars funnel down to local economies in the form of increases, their consumption correspondingly goes up,
government contracts and resultant job creation. At whether it be lunch at a local sandwich shop or going
the end of 2009, only 25 percent of the $275 billion in
out to the movies with their families. The demand
ARRA contracts, grants and loans had been paid out for materials (intermediate inputs) depends on the
by the federal government. Onvia expects the creation requirements of industries that use inputs from other
or retention of over one million direct and indirect jobs sectors. In the case of road repavement, it would
from ARRA contract spending in 2010, in addition to presumably be asphalt and machinery, and those
the 460,000 created or saved by ARRA in 2009. industries would continue to employ workers as long
as there is a demand for their goods and services.
In conjunction with REMI, the recognized authority
Essentially, every dollar spent on a project generates
on regional economic models, Onvia has projected
more than a dollar return to the economy. This
the expected employment increase by type in each
spending and re-spending is the so-called “multiplier
region. Across all regions, approximately half of the
effect.”
employment gains are directly from ARRA funding
2010 ARRA Funded Employment
More than 1 million jobs stand to be retained or created from ARRA spending
in 2010. (For employment category definitions, see the glossary on pg 25.)
Local Government
350
State Government
80% of ARRA-funded
Jobs (Thousands)
300
250 Exogenous Industry Agencies Expect the Majority of
200
Sales Employment
Initiatives to Begin in 2010
Investment Activity
Demand Employment
150
Government Demand
100 Employment
Local Consumption
50
Demand Employment
0 Intermediate Demand
New Mideast Great Plains Southeast Southwest Rocky Far
Employment
England Lakes Mountain West
U.S. Region
Source: Onvia and REMI 2010
Source: Onvia and REMI 2010
THE NEXT ECONOMY: 2010 Government Market Outlook 17

18. STIMULUS & RECOVERY
Although ARRA funding is almost entirely to further stimulate job growth. The bill is designed to
government spending, most of the money will not be continue the momentum created by ARRA investments
spent in the public sector. The largest employment and to help mitigate the potential cliff effect as ARRA
increase from 2010 spending will take place in the programs expend their allocated capital.
construction sector, with close to 480,000 expected
Included in the pending bill are funds redirected
jobs. This corresponds with the fact that most allocated
from TARP for various infrastructure investments,
projects are in the infrastructure market. Coming
stabilization of public service jobs including educators
in second is professional and technical services,
and law enforcement and continued emergency
which consists of industries such as architectural
funding for unemployment and healthcare benefits.
and engineering services, scientific and other
consulting services, and computer systems design The infrastructure funds will be distributed to states
and related services. Transportation and warehousing, by the same formulas that were used to distribute
manufacturing, healthcare and social assistance, and stimulus funds previously provided in the ARRA.
administrative and waste services make up about States are not required to provide any matching
a third of the total employment created by recovery dollars to be eligible to receive these funds, and will
spending. be required to have 50 percent of the funds under
contract within 90 days or lose the remaining funds
As of January 1st, 2010, Onvia was tracking more
(to be redistributed to states which have met this
than 47,000 ARRA funded projects and purchases with
requirement; the second 50 percent must be under
thousands of additional projects yet to be announced.
contract within one year or be lost to other successful
Jobs for Main Street states).
Just as spending from the ARRA began to accelerate This is a far more stringent requirement than ARRA,
in late 2009, the U.S. House of Representatives which required funds to be “obligated” rather than
passed H.R. 2847, “Jobs for Main Street Act of 2010,” under contract. Many of the other provisions related
2010 ARRA Employment By Industry
3% Construction
“We received ARRA funds
4% Transportation and Warehousing
39% in 2009. We anticipate
6% Finance and Insurance spending ~70% of the funds
Administrative and Waste Services in 2010. We are seeing
6%
Healthcare and Social Assistance jobs being created and/or
retained.”
7% Manufacturing
24%
Professional and Technical Services
11% — Government Official Survey
Other
Participant, December 2009
Source: Onvia 2010
Source: Onvia 2010
THE NEXT ECONOMY: 2010 Government Market Outlook 18

19. STIMULUS & RECOVERY
to the use of ARRA funds are included in the Jobs for
Main Street Act.
The U.S. Senate is expected to consider the Jobs
for Main Street bill in January. Passage will be hotly
contested as parties debate the successes of the
last several stimulus bills versus more deficit friendly
strategies such as tax relief.
2010 Jobs For Main Street Act (H.R. 2847) Spending
Funded initiatives from the Jobs For Main Street Act are intended to move quickly
$2.0
$43.7 $4.7
Education $27.1 Billion Energy and Water $4.7 Billion
Education Jobs for States ($23 Billion) Innovative Technology Loan
$27.1 School Renovation Grants ($4.1 Billion) Guarantee Program ($2 Billion)
Clean Water State Revolving
Fund ($1 Billion)
Transportation $37.2 Billion
Safe Drinking Water Revolving
$37.2 Additional Infrastructure
Fund ($1 Billion)
$35.8 Investments ($27.5 Billion)
Environmental Restoration and
Public Transportation Flood Protection ($715 Million)
Labor and Workforce $43.7 Billion Investments ($8.4 Billion)
Small Business Loans ($351 Million) Amtrak ($800 Million) Housing $2.0 Billion
Expanded Unemployment National Housing Trust Fund ($1 Billion)
Airport Improvements ($500 Million)
Benefits ($41 Billion) Public Housing Capital Fund ($1 Billion)
Law Enforcement Jobs ($1.18 Billion)
Job Training ($750 Million) Healthcare $35.8 Billion
Summer Youth Employment Medicaid ($23.5 Billion)
($500 Million) COBRA Subsidy ($12.3 Billion)
Source: Onvia 2010
THE NEXT ECONOMY: 2010 Government Market Outlook 19

20. CONCLUSION
The 89,000 government entities across the as was the case in 2009, but rather to avoid being
United States represent a dynamic marketplace competitively disadvantaged in their industry. While
with opportunities in every industry vertical. The some will determine no fit, most will define a short-
“Next Economy” in which government more actively term and long-term strategy for playing in this sector.
participates in business interests through regulation,
direct ownership or other means, is emerging.
Government spending as a percentage of GDP
is at an all-time high and that will not change in the
foreseeable future. As state lawmakers head back
to their capitals they face increasing pressure to
raise taxes to supplement bankrupt budgets. Tax
increases are inevitable, which will have the effect of
even further increasing the size of the government
marketplace in coming years. Reflection on the first
year of the Obama administration is a portent of the
Next Economy; the reform agenda in healthcare,
manufacturing, financial markets, and energy are
already affecting the state and local government
market.
For businesses, the debate isn’t about large versus
small government but rather how to engage in and
influence this vast and growing market. In 2010 it is
incumbent on every business to evaluate its position
in the government marketplace, not just for survival
Which stakeholders do you expect will have the greatest effect
“Stimulus programs with long
on your company’s economic value in the next 3–5 years?
term effects [such as] energy
Business must proactively and regularly engage with government or be left efficiency, modernization of
behind in the Next Economy transportation infrastructure,
modernization of medical
information systems are
Customers
promising.”
Source of Influence
Government
Employees — Government Official Survey
Participant, December 2009
Investors
Suppliers
Media
Non-Governmental
Organizations
0 10 20 30 40 50 60 70 80
Source: McKinsey Quarterly 2010
Source: McKinsey Quarterly 2010
THE NEXT ECONOMY: 2010 Government Market Outlook 20

21. AUTHORS
About Onvia. Businesses across the United States rely on Onvia
as a comprehensive resource for industry-specific
Onvia (NASDAQ: ONVI) is the leading provider information needed to make intelligent sales decisions.
of Business-to-Government solutions in the United Onvia was founded in 1996 and is headquartered in
States, covering the broadest set of industries and Seattle, Washington.
products at every level of the public sector - Federal,
State, Local and Education. For more than twelve Recovery.org, a service of Onvia, is tracking
years, Onvia has delivered unparalleled coverage American Recovery and Reinvestment Act (ARRA)
of government purchasing activity and commercial/ spending by Federal, State and Local agencies and
residential projects for clients in a variety of industries, provides detailed information about what is happening
including: in our States and Municipalities - from the moment
ARRA funds are approved, to a government agency’s
• Architecture and Engineering issuance of a Bid or RFP, through contract award to a
• Construction business.
• IT/Telecom
Onvia, Inc.
• Healthcare
509 Olive Way
• Operations and Maintenance
Seattle, WA 98101
• Professional Services
206.282.5170
• Transportation
www.Onvia.com
• Water and Energy/Alternative Energy
www.Recovery.org
About REMI.
For three decades REMI has been the leading
authority on how government actions and policy
changes affect the world around us. REMI was
founded on a transformative idea: government
decision-makers should test the economic effects
of their policies before they’re implemented. Their
commitment to a better understanding of the economy
drives an unceasing process of innovation in economic
theory and practice, software development and
application, and the use of quantitative economic
analysis to guide policy decisions. Through a belief
that improved knowledge and information will lead Regional Economic
to better decisions, REMI’s work develops and Models, Inc.
supports the use of leading economic models that 433 West Street
inform government and corporate decisions. REMI is Amherst, MA 01002
headquartered in Amherst, Massachusetts and has a 413.549.1169
regional office in Washington, D.C. www.REMI.com
THE NEXT ECONOMY: 2010 Government Market Outlook 21

22. 2010 PROJECT HIGHLIGHTS
HIGHWAYS & PORTS
2010 PROJECTS LOCATION VALUE
Reconstruction of IR 090 OH $400,000,000
I-85 Yadkin River Project NC $330,000,000
Road Reconstructions CA $321,058,000
East Bridgeport Rail Yard Improvements Bridgeport, CT $90,000,000
HOV Connector between I-405 and SR-22 CA $173,253,000
Sheldon and Arleta Slab Replacement and HOV CA $160,000,000
Port Columbus Airport Security Projects Columbus, OH $35,200,000
Renovation and Improvements to the City’s Port Petersburg, AK $1,000,000
Dock Facility
Wonderland Station Garage Revere, MA $22,700,000
Lone Wolf Historic Bridge/pedestrian Bridge Tom Green,TX $1,590,201
TRANSIT
Heavy Duty Transit Buses ID $51,200,000
ARRA - Fta 5307 Miami Dade Transit Urban Formula FL $69,802,389
Funding
Replacement of up to 132 buses CA $61,652,000
Preventive Maintenance Atlanta,GA $121,300,000
Replacement CNG and Electric Buses - 43 in FY Long Beach; $52,565,000
2009 and 40 in FY 2010. Los Angeles;
Santa Ana, CA
Acquisition of Vehicles Long Beach; $84,000,000
Los Angeles;
Santa Ana, CA
Energy Efficient Bus Components Monroe, MI $84,000
Smartbike Expansion Washington, $3,000,000
DC
Transit Security Houston, TX $3,040,560
Light Rail Projects MD $4,200,000
ENERGY
Five Integrated Smart Grid Techology Systems AL $330,130,432
Implementation of the Smart Grid Miami, FL $578,347,232
Deploy a Smart Meter Network and Advanced Baltimore, MD $451,814,234
Customer Control System
Build a Green Smart Grid Virtual Power Plant Raleigh, NC $520,000,000
Comprehensive Grid Modernization for Duke Charlotte, NC $851,700,000
Energy’s Midwest Electric System
Integrate Smart Grid Technologies Las Vegas, NV $298,000,000
Deploy a Wide-range of Grid-related Technologies New York, NY $272,341,798
Deploy a Smart Grid Network Oklahoma City, $293,201,332
OK
Complete the Installation of 2.2 Million Smart Meters Houston, TX $639,187,435
Green Energy Works! Biogas Projects Dauphin, PA $500,000
THE NEXT ECONOMY: 2010 Government Market Outlook 22

23. 2009 TOP CONTRACTORS
HIGHWAYS & PORTS
TRADING
TOP CONTRACTORS
SYMBOL
Granite Construction Company NYSE: GVS
Watsonville, CA
APAC-Atlantic NYSE: CRH
Alcoa, TN
Ford Construction Company Private
Dyersburg, TN
Rieth-Riley Construction Co. Private
Goshen, IN
MRM Construction Services Private
Phoenix, AZ
Pike Industries NYSE: CRH
Belmont, NH
Ajax Paving Industries Private
Nokomis, FL
Ballenger Construction Company Private
Harlingen, TX
Shelly Company NYSE: CRH
Thornville, OH
James Construction Group Private
Baton Rouge, LA
TRANSIT
The Toro Company NYSE:TTC
Bloomington, MN
Deere & Company NYSE: DE
Moline, IL
Ford Motor Company NYSE:F
Dearborn, MI
General Motors Corporation NYSE:GRM
Detroit, MI
Gillig Corporation Private
Hayward, CA
A123 Systems, Inc NASDAQ:
Watertown, MA AONE
Atlantic Machinery Inc. Private
Silver Spring, MD
Silver Ships, Inc Private
Theodore, AL
Boulton Powerboats Inc. Private
Central Point, OR
Hertz Equipment Rental Corporation NYSE: HTZ
Rohnert Park, CA
ENERGY
Navarro Research and Engineering Private
Oak Ridge, TN
Project Assistance Corporation Private
Walnut Creek, CA
Hydrogen Energy California LLC Private
Long Beach, CA
Sandia Corporation NYSE: LMT
Albuquerque, NM
THE NEXT ECONOMY: 2010 Government Market Outlook 23