AGC Federal Government Shutdown Update

The partial government shutdown that began on December 22^nd has entered its 13^th day (the longest was the 21-day shutdown in 1995–96). The dispute over funding for the southern border wall remains the roadblock preventing Democrats and Republicans from funding many government agencies. While several of the major federal construction agencies are funded, you may have members who work for those agencies that are partially shutdown. In addition, because the Department of Homeland Security lacks funding and operates E-Verify, the system is unavailable (see details here).

Congress has funded about 75 percent of the government through fiscal year (FY) 2019. These funded agencies include: the departments of Defense, Labor, Health and Human Services and Veterans Affairs.  For the remaining 25 percent of federal agencies, roughly 380,000 federal employees have been furloughed (placed on unpaid leave), and 420,000 agency employees have been kept on as essential (working without pay).

Whether contractors are expected to work during the partial government shutdown depends on the type of work the contractor executes with that 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, 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 will not be immediately impacted by the shutdown. 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.
  • 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)
  • DOI Contingency Plans for Operations in the Absence of Appropriations
• General Services Administration
  • GSA Operations in the Absence of Appropriations
• Department of Agriculture (including but not limited to the Natural Resource Conservation Service and Rural Utilities Service)
  • NRCS Contingency Plans
• 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)
  • Lapse in Funding for DHS
• Department of Housing and Urban Development
  • HUD Contingency Plan
• Department of State (including but not limited to the Bureau of Overseas Building Operations)
  • State Guidance on Operations During a Lapse in Appropriations
• U.S. Environmental Protection Agency
  • EPA Plan During a Lapse in Appropriations
• Small Business Administration
  • SBA Plan for Operating in the Event of a Lapse in Appropriations

Additional Resources

• Associated General Contractors of America – What Contractors Should Know in the Event the Government Shuts Down
• Office of Management and Budget – Frequently Asked Questions During a Lapse in Appropriations
• Office of Management and Budget – Agency Contingency Plans
• Congressional Research Service Report – Shutdown of the Federal Government: Causes, Processes, and Effects

Jimmy Christianson

Vice President, Government Relations

Associated General Contractors of America

703-837-5325 (office)