Government Shutdown: Expect Delays

By Gavin Jenkins, Senior Managing Editor

Earlier this morning, the federal government shut down after negotiations on funding failed between Democratic leaders in Congress and President Donald Trump, as well as his Republican allies in Congress. 

A government shutdown doesn’t mean everything stops, but for people working on federal roads, bridges and highways—especially under government contracts or in agencies that manage those programs—the impact can be significant. 

The U.S. Department of Transportation released guidance on Sept. 30 on how each modal administration will operate during the shutdown. It said most federally supported transportation construction programs will continue uninterrupted.

One exception is the Capital Investment Grant program. Delays to surface transportation projects may occur because the program is partially funded by annual appropriations. 

The shutdown likely will affect the workers who have jobs constructing and maintaining federal infrastructure. This includes contractors. There likely will be a ripple effect that reaches state and local infrastructure. 

Congress failed to pass appropriations or a continuing resolution before the midnight deadline. Government functions that are considered “excepted” or “essential” might continue. However, those workers are often not paid until funding resumes. 

For contractors, the ability to continue work depends on whether the contract or program is already funded, and whether that funding is subject to annual appropriations that are being cut off.  

After the shutdown ends, there is a law (the Government Employee Fair Treatment Act of 2019) that generally guarantees retroactive pay to federal employees furloughed or asked to work without pay during the shutdown. But, for contractors, guarantees are less certain. 

Some contracts, especially those funded in prior fiscal years or with multi-year appropriations, may have enough money “on hand” to keep workers on jobsites. However, many infrastructure contracts rely on annual appropriations and would probably be subject to suspension of payments or work.

If contractors are permitted to continue working, they might see delays in payments, invoices, reimbursements and approvals. They also might experience delays in inspections and government oversight, as many federal workers will be furloughed. 

This also likely will impact environmental compliance processes. 

The amount of disruption depends on the length of the shutdown. A prolonged shutdown can lead to cost overruns, project delays, contractual disputes, and even project cancellations.

Road and bridge projects on the state and local levels might face indirect effects if they depend on federal funding, matching, approvals, or oversight. But projects fully financed and managed locally may continue largely unaffected—unless those roads tie into federal systems.

While Republican and Democratic leaders point fingers at who is to blame, workers in the roads and bridges industry could suffer. And, just like this shutdown, that could have a ripple effect on the condition and safety of infrastructure.