Q: How Does the Government Shutdown Impact Construction?

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You’ve probably heard recently about the government shutdown. Contrary to the hyperbole surrounding the subject, the government is not shut down entirely and some modes of operations are ongoing. While the shutdown shouldn’t impact any MBI members directly, it could delay anyone working on a federal project until the time the government is re-opened. However, AGC of America has put an article together that provides further detail of the effects the shutdown has on our industry:

The content below is attributed to AGC of America, and was last updated on January 10, 2019.

The partial government shutdown that began on December 22 continues. AGC is aware of limited impacts on the construction industry to date. As it stands, the E-Verify system—which allows enrolled employers to confirm the eligibility of their employees to work in the United States—is unavailable (see details here). In addition, AGC knows of at least two state departments of transportation—New Mexico and Oklahoma—that have cancelled their January lettings.

Whether contractors are expected to work during the partial government shutdown depends on the type of work the contractor executes with any particular federal agency. If a contractor works for a branch of a federal agency that performs essential work that remains open during the shutdown, the contractor will in turn likely be required to continue work.

AGC of America recommends that members consult AGC’s What Contractors Should Know in the Event the Government Shuts Down. Here is a list of major federal construction-related agencies and their status during the partial government shutdown:

Unaffected Construction-Related Agencies & Programs

  • The Department of Labor (including but not limited to the Occupational Health and Safety Administration, Wage and Hour Division, and Office of Federal Contract Compliance Programs)
  • Construction agencies within the Department of Defense including but not limited to the Army Corps of Engineers (Military Construction and Civil Works Programs), Naval Facilitates Engineers Command, and Air Force Civil Engineer Center
  • The Bureau of Reclamation
  • The Department of Energy, including the National Nuclear Security Administration
  • Department of Veteran’s Affairs Major and Minor Construction Programs

Affected Construction-Related Agencies

  • Department of Transportation (minimal impact)
    • The federal-aid highway program has not been significantly impacted by the shutdown to date. Because Congress has enacted authorization legislation through September 2020 for the Highway Trust Fund (HTF), state DOT requests for reimbursement for on-going highway projects will continue to be honored. States will also be able to continue to enter into contracts with the assurance of federal reimbursement. Nevertheless, states may consider holding back on lettings because of general uncertainty the longer the shutdown lasts. As it stands, New Mexico and Oklahoma have cancelled their January lettings.
    • Some of the grant programs (e.g., BUILD a.k.a. TIGER) receive funds through the General Fund—not the HTF—and could be impacted. Federal Transit Administration (FTA) Capital Grants are also funded through the General Fund. As such, there could be a slow-down in reimbursements there. That stated, some FTA funds for construction come from the HTF account. While funding for these projects is still available, the personnel that process reimbursements are furloughed and payments could be slowed.
    • DOT Operations During a Lapse in Annual Appropriations
  • Department of Interior (including but not limited to the National Parks Service, Forest Service, Fish & Wildlife Service)
  • General Services Administration
  • Department of Agriculture (Natural Resource Conservation Service)
  • Department of Homeland Security (including but not limited to the Coast Guard and Customs and Border Control, and E-Verify through U.S. Citizenship and Immigration Services)
  • Department of Housing and Urban Development
  • Department of State (including but not limited to the Bureau of Overseas Building Operations)
  • U.S. Environmental Protection Agency
  • Small Business Administration

Additional Resources