7 Ways the Government Shutdown Impacts Federal Design/Build Projects

Earlier this week we shared an interactive graphic depicting the far-reaching impact of the government shutdown across the country.  As we head into the end of the second week of the 2013 shutdown, here’s a look at how the protracted furloughs and closures are beginning to impact the government design/build industry both at the federal and state and local level.

Here’s what you need to know:

  1. The impact on the Federal-aid highway program will be minimal. Because the Federal Highway Administration (FHWA) is funded out of the Highway Trust Fund, and since MAP-21 authorized funding through the end of FY 2014 (September 30, 2014), FHWA will not be shut down (source).
  2. The Federal Transit Administration (FTA) is not funded from the HTF and is shut down. On-going construction funded under a full funding grant agreement is subject to annual appropriations and therefore the local transit agency would have to pay invoices out of its own budget with the expectation of being reimbursed by FTA in the future (source).
  3.  The Federal Aviation Administration (FAA) is also not funded out of a trust fund, however, the Airport Improvement Program (AIP) is. Ongoing construction work funded through AIP should not be impacted, although reimbursements to airport authorities could be delayed (source).
  4. Despite the recall of 350,000 civilian furloughed defense employees on October 5, the Army Corp of Engineers civil-works employees are still on the furloughed list. The trickle down effects has hampered approvals of construction permits. The bottom line? Andrew Goldberg, American Institute of Architects managing director for government relations, speaking to ENR says some buildings projects with obligated funds are active, but a long shutdown may harm non-federal design and construction, too. He says, "For an industry that is still getting back on its feet, this could ... cause a real backward slide."
  5. Over at the Environmental Protection Agency, 93% of its workers, including those doing highway-project reviews have been furloughed delaying “monster projects” including 129 road and bridge jobs currently under review.
  6. In San Francisco state agencies are also feeling the impact, the Department of Emergency Management postponed a series of disaster response exercises scheduled for the week of Oct. 7, citing the lack of ability of military personnel to participate due to the shutdown (Source)
  7. 12,000 defense workers are furloughed at the Huntsville Redstone Arsenal with an estimated $10.5 billion dollar economic impact on the four county area. In addition, contracts in Huntsville are being delayed leading to layoffs among GIS analysts whose bosses can no longer accurately forecast revenues (Source).

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