Government Shutdown: How it Affects the Construction Industry Part 2
In part one of our article, we discussed what a government shutdown is, shared America’s shutdown history, and the details of the most recent shutdown. In this part, we will talk about how it affects the construction industry and the potential consequences of a shutdown. In part three, we will talk about its effects on the Occupational Safety and Health Administration (OSHA).
How Does a Shutdown Affect the Construction Industry?
Sometimes government contractors are overlooked in the wake of a government shutdown. However, a shutdown could greatly impact federal construction workers who depend on government funding for their services. Whether you are considered an essential or non-essential worker, you are not paid whether you work or do not work. It is not a vacation for many who depend on consistent income. If the government does not authorize back pay, it only exacerbates the problem.
Whether or not a contractor is entitled to associated costs as a result of a government shutdown may depend on the Sovereign Acts Doctrine. The doctrine grants the U.S. government immunity from contractual obligations for acts performed in its sovereign capacity for the public good. Our Miami construction attorneys are well versed in contract law and advise contractors to always review their contract to ensure they comply with the terms therein and consult with their contracting officer.
Unintended Consequences of a Government Shutdown
Fortunately, the recent government shutdown did not last long. However, if a shutdown were to last much longer it could have a major impact on federal construction workers in the following ways:
- Critical path deals
- Increased costs due to suspensions
- Delayed project solicitations for new federal construction projects
- Delayed approvals (e.g., changes orders)
A government impasse can have unintended consequences for federal contractors. However, a shutdown may qualify as an excusable, compensable delay which may entitle a contractor to a time extension. If a project is suspended by a shutdown, contractors need to be ready to show how the shutdown impacted their project schedule. A contractor would be wise to secure the counsel of a Miami construction attorney.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.