How Will the Government Shutdown Impact Federal Construction Projects?

October 2, 2013

For direct federal construction contracts, the bulk of ongoing and already awarded contracts will not be impacted by the government shutdown. The majority of construction contracts are awarded on a fixed-price basis and will be unaffected since the funding was likely appropriated at the time of the award.  However, most cost-type contracts and time and materials contracts are incrementally funded and, therefore, will be affected once the prior year’s funding is fully expended.  Pending solicitations and awards will likely be delayed until the shutdown is over.  Even in situations where a contract does not require new funding, performance may still be affected due to a lack of access to federal facilities or the furlough of federal personnel. Ultimately, the total impact will be determined on a contract-by-contract basis. For further illustration of the possible impacts of a government shutdown the Associated General Contractors of America created a very useful informational matrix on the topic.