Partially Postponed Projects

The government shutdown is hurting construction, trade, and manufacturers

National News Professional Practice
The current government shutdown indirectly affects outside contractors such as construction companies, building product manufacturers, and transportation authorities that rely on smooth international trade and reimbursement on federal loans. (Courtesy National Oceanic and Atmospheric Administration via Creative Commons)
The current government shutdown indirectly affects outside contractors such as construction companies, building product manufacturers, and transportation authorities that rely on smooth international trade and reimbursement on federal loans. (Courtesy National Oceanic and Atmospheric Administration via Creative Commons)

Now in its third week, the partial government shutdown is proving extremely tough for not only direct federal employees but also outside contractors who work with and rely on funding from U.S. agencies. In New York alone, that means big-name organizations like the Metropolitan Transportation Authority and smaller businesses helping with capital construction efforts throughout the five boroughs.

It’s estimated that over 50,000 federal contract employees in the New York metropolitan area are out of work and pay with no end in sight. While some organizations aren’t running at all, others are still forcing people to work but without hope of immediate reimbursement.

For example, Senator Chuck Schumer (D-NY) said on Sunday the MTA could lose up to $150 million each month in federal funds as long the shutdown remains. This would halt major track repair work still ongoing after Hurricane Sandy and further construction on the Second Avenue Subway, according to the New York Post.

This would happen because the General Fund, managed by the U.S. Bureau of Fiscal Service, is currently compromised, meaning companies working on state and city projects sponsored through the Federal Transit Administration’s capital investment grants program will see a slow-down in reimbursement. New York will be forced to pay out-of-pocket for the above subway improvements and work on the Select Bus Service lines, among other things.

Because most public building and infrastructure construction projects in New York City are managed and funded by local government agencies, work will carry on. But that doesn’t mean it will all run as smoothly as expected. As weeks pass on, it will likely become increasingly difficult to import the necessary building materials selected for these construction projects.

This is not only because of President Trump’s trade war but because of international shipping delays and a slow-down in safety checks through other agencies. The Federal Maritime Commission is closed and cannot smoothly regulate cargo clearance or port activity. In addition, hazardous materials being imported into the United States might be held up as all port investigators within the U.S. Consumer Product Safety Commission have been furloughed.

What’s more, the Commerce Department can’t process requests from manufacturing companies who want an exemption from Trump’s metal tariffs. These are all big issues for U.S.-based manufacturers that can’t plan for the year ahead if they don’t have an accurate estimate of how much important imported materials will cost them and how long those products will take to reach them.

Trump plans to make a televised, prime-time address tonight to discuss what he calls a humanitarian crisis at the U.S. Southern border. It’s unclear whether he’ll give an actual timeline for getting the government up and running again, though he’s repeatedly said he won’t cancel the shutdown until Congress gives him the full $5.6 billion needed to build his border wall. Until then, contractors in every city and state will have to make do with potential delays and money coming from their own bank accounts.

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