Information for Construction Contractors Operating Under the Federal Government Shutdown The fiscal year 2013 appropriations law expired October 1, 2013, the beginning of FY 2014.  The failure by lawmakers to reach an agreement on funding for the new fiscal year resulted in a federal government shutdown.  The shutdown has left contractors wondering how or even if they can continue to perform their federal contracts.  Construction contracts awarded on a fixed-price basis will be substantially unaffected by the shutdown.  However, for most cost-type contracts, time and materials contracts, IDIQ/MATOC/MACC contracts, and those contracts that have yet to be awarded, the shutdown will likely suspend operations completely.  Therefore, it is important for contractors to prepare for the consequences of a government shutdown.

The House and Senate were unable find compromise and pass a continuing resolution (CR) by last night’s 12:00 a.m. deadline. Congress failed to enact any of the twelve appropriations bills that annually are necessary to fund government functions. Therefore, as of today, the federal government has been shutdown, furloughing about 800,000 federal workers and suspending most non-essential federal programs and services. For direct federal construction contracts, the vast majority of ongoing and already awarded contracts are not impacted by the shutdown. However, pending solicitations and awards, including task orders for existing multiple award contracts, will be delayed until the shutdown is over. In addition, agency action on permitting and project management decisions will likely face delays.

Total construction spending hit an unknown level in August because the Census Bureau was unable to release new data as a result of the federal government shutdown according to AGC of America. Association officials cautioned that the impacts of the shutdown will go beyond data as solicitations for many new construction projects come to a halt.

In its continuing effort to lay the groundwork for next year’s need to reauthorize the highway and transit programs, the Senate Environment and Public Works (EPW) Committee held a hearing Wednesday to address the status of the Highway Trust Fund and examine options for providing the revenue needed to keep the trust fund operating. EPW chairwoman Sen. Barbara Boxer (D-Calif.) opened the hearing by reading from a statement submitted by AGC, which highlights the dire situation facing the HTF at the end of FY 2014 – when there will be an insufficient balance to allow for new federal funding obligations, again calling for continued support for increasing the traditional motor fuels tax, including allowing for inflation adjustments and identifying new revenue sources. Sen. Boxer suggested that she is looking at the idea of replacing the 18.4 cents per gallon tax on gasoline purchases with a sales tax fee paid by oil wholesalers, she believes the option would help close an approximately $20 billion annual shortfall in transportation funding. There was not unanimous support for this idea among Committee members present and Senator Boxer pointed out that this decision is in the hands of the Senate Finance Committee, but is a concept she will encourage the committee to look at.

Because of the uncertainty of government funding over the next few days, AGC has compiled a Government Shutdown Resource Center that includes information on what contracts will be in jeopardy and which will be unaffected.  The document also gives advice on how to proceed with federal owners if certain approvals may be needed or if there are question about how to bill costs associated with delays caused by the government shutdown.

What You Need to Know Now: Preparing for a Possible Government Shutdown The fiscal year 2013 appropriations law currently funding government operations, including many federal contracts, will expire on October 1, 2013, the beginning of FY 2014. A failure by lawmakers to reach an agreement on funding for the new fiscal year will result in a federal government shutdown. The possibility of a shutdown has left contractors wondering how or even if they can continue to perform their federal contracts. Construction contracts awarded on a fixed-price basis will be substantially unaffected by the shutdown. However, for most cost-type contracts, time and materials contracts, IDIQ/MATOC/MACC contracts, and those contracts that have yet to be awarded, the shutdown will likely suspend operations completely. Therefore, it is important for contractors to prepare for the consequences of a government shutdown.

Alabama voters went to the polls in the first of three elections to choose a successor to resigned Rep. Jo Bonner (R) last night, who departed the House in August to accept a position at the University of Alabama. The end result met predicted expectations, as Democratic former state Representative candidate Burton LeFlore easily won his low turnout primary with 70 percent of the vote. He now awaits the winner of the Nov. 5 Republican run-off.

AGC joined several of their colleagues in the trucking and bus industry in supporting H.R. 3095, a bill that will ensure that any action taken by the Federal Motor Carrier Safety Administration (FMCSA) regarding obstructive sleep apnea among commercial truck and bus drivers may occur only after a formal rule making process.  The bill passed the House by a vote of 405-0 and now heads to the Senate.

There have been several important developments in the ongoing battle over the precise scope of federal jurisdiction over “waters of the United States,” as dictated by the Clean Water Act (CWA).  Most notably, the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) sent a draft proposed rule – one that would clarify the definition of waters of the U.S. and their CWA permitting jurisdiction – to the Office of Management and Budget (OMB) for final interagency review. The resulting rule may add countless “water bodies” to the list of federally-controlled waters and make CWA Section 404 permitting an even more onerous and costly proposition.

On Sept. 24, the U.S. Department of Labor’s Office of Federal Contract Compliance Program’s (OFCCP) long-anticipated final rules on veterans and individuals with disabilities (IWD) were posted in the Federal Register. Both rules increase the affirmative action requirements of direct federal contractors and subcontractors. The agency pre-released each of the final rules in August but announced that they would not go into effect until 180 days after being published. The effective date of both rules is March 24, 2014. However, for contractors with a written affirmative action program in place at that time, the affirmative action program requirements do not go into effect until the beginning of the next plan year.