Federal spending in the Washington area, originally thought to have dropped about $1 billion in 1989, actually rose by more than $500 million, the Greater Washington Research Center announced yesterday.
The erroneous figures, which were released by the research center last April and heralded in newspaper headlines throughout the region, created the impression that the already slowing Washington economy was in more trouble than it actually is.
The federal agencies responsible for calculating the figures gave conflicting explanations yesterday for how the $1.5 billion discrepancy could have occurred. The possibilities ranged from revisions by the Department of Defense in its contract calculations to a new computer system at the agency that compiles contracting information.
Angry research center officials said that at least one federal agency had known about the error since May, but that the research center had found the mistake only two weeks ago when examining computer tapes of the actual contracts.
For five months, Washingtonians -- already worried about declining real estate prices, slow growth in retail sales and shaky financial institutions -- also believed that the federal government was no longer one of their few sources of economic strength.
"They acted as if they didn't know that $1 billion was a psychological blow to this economy," said Atlee E. Shidler, president of the research center. "Nobody said a word to this community. You would think a good citizen would want to let his fellow citizens know. They owe it to this town."
Officials of the Federal Procurement Data Center (FPDC) and the Census Bureau said they had issued the new figures as soon as they were available and that they had had no reason to formally notify recipients of the data that the figures had been revised substantially.
According to the research center, contracting in the metropolitan area was first reported to have fallen 9.6 percent, from about $10.6 billion in fiscal 1988 to $9.6 billion in fiscal 1989. The new report said that contracting instead rose 5.2 percent to more than $11.1 billion in the District, suburban Maryland and Northern Virginia.
The message, experts said, is that it is Washington's private sector that explains the slumping local economy, not the federal government.
"We can't look at federal purchases as being our Achilles' heel," said Stephen S. Fuller, a consultant to the research center and a professor at George Washington University. "It points to the significance of the non-federal private sector in our growth and our decline."
The errors were concentrated principally in the District, where the Census numbers were nearly $800 million too low. In Northern Virginia, the contracting figures were off by more than $100 million; in Maryland the difference exceeded $620 million.
Brenda Johnson, FPDC director, said the error was discovered when the agency changed its computer system this spring. In order to accommodate the new system, the Defense Department supplied the FPDC with a new computer tape of its contracting nationwide. When FPDC officials ran the tape, they noticed "something seemed out of whack," Johnson said. Eventually, computer tapes with the revised figures were sent to regular customers, including Fuller. But Johnson said there was no reason for her to formally notify the research center that the error had occurred.
David Kellerman, a statistician at the Census Bureau, said his agency was made aware of the problem in August, when staff members to legislators from Maine and Louisiana complained that their totals were wrong. However, he said, he did not believe the Defense totals for the metropolitan areas were incorrect in the old report.