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Commitments across the country measure the effects of a state closure that came into force on Wednesday.
The interruption will immediately freeze the construction activity in certain areas both temporarily and in some cases.
In the electricity supply sector, the shutdown that influences state energy programs that are financed by funds, including energy efficiency programs, renewable energies, supply support for households with low income and revolving energy funds. It could also slow down or stop the approval and surveillance process for a new energy infrastructure.
The first pain point will be based on projects based exclusively on federal dollars, said Marsia Geldert-Murphey, former president of the American Society of Civil Engineers and current senior association at GBA, one in Lenexa, Kansas, in Kansas in Kansas.
Although the money could be technically available, the contractual officer and other supervisory staff could still be switched off. That could make projects suffer in a neutral man, said Geldert-Murphey.
“The real problem is the federal employee,” said Geldert-Murphey. “Are they judged?
While projects are usually allowed to go forward, activities that require input or approval of government employees simply cannot proceed, said Erik Wright, headmaster at Precision Construction Services, a contractor based in San Luis Obispo, California. He added that delays in these cases are more common than cancellations.
“When the government closed at the end of 2018, early 2019 for around 20 working days, the projects were delayed by three to four months in the last phases of the contract or the early construction phases,” said Wright. “At the end of 2018 we had contracts in processing, which had only landed in April and May 2019, which made us considerable cash flow and personnel challenges.”
Being in a state of the hover would have an immediate impact on contracts and supply chains. The prices are only blocked for as long and extended delay suppliers to arrange for offers and contractors to remobilize the crews at additional costs. Geldered Murphy said.
Fixed price contracts
On the other hand, according to the Associated General Contractors of America, existing fixed price contracts with acquired funds should be continued. Most of the federal building contracts are in this category, since according to an e-mail-agc declaration, they were already “awarded at a fixed price and the financing was acquired at the time of the award.
According to AGC, this includes projects that are financed by the infrastructure investment and job law as well as the Highway Trust Fund. The IIJA included the financing of a number of energy initiatives, including regional hydrogen hubs, carbon -catching, advanced nuclear reactors, energy storage, raster resilience and electric vehicles.
Projects that are sponsored by the Federal Highway Administration and the Federal Transit Administration should not be influenced because, according to AGC, they are not subject to annual means. In other words, these agencies should continue to make prompt payments to contractors for the work done, regardless of state closure.
However, the costs for cost types and awards in the pipeline are far more exposed to the effects of a shutdown if one. State and local private construction work that is bound to federal projects would probably also be exposed to obstacles, added Geldert-Murphey.
“If the Federal Project is delayed and you assume that you build a connection to something that has already been built, the cascade effect can be devastating,” said Geldert-Murphe. “If you [contractors] You do not have this communication on the main page, you are at a standstill, which in turn represents a domino effect when you push back decisions that are made. “
Many state, municipal and non -profit projects are based on federal grants, said Wright, which means that a public closure could prevent private customers from making capital projects.
“The supply chain of the construction chain is closely connected. “Repeated shutdown undermine confidence in the government as a reliable contractual partner, which can influence how companies make future offers and whether they use certain options at all.”
At Messer Construction, a contractor based in Cincinnati, Paul Richter repeated these concerns.
“A long decommissioning of several months could possibly bring progress to the planning and development of future projects onto the market, which leads to a disturbance in the workflow of a long -term horizon,” said Richter, Vice President of Operations.
The company's military projects are largely isolated at short notice, said Richter, since the financing through the military construction program or operations and maintenance accounts is usually locked up well in advance. The risk comes from furnishing employees who may be sent home, which would prevent renovation projects from moving forward. Judge added that even lengthy shutdown would hinder future work.
This uncertainty will ultimately increase the construction activity again.
“Any closure of the government creates uncertainty … including potential delays in federal infrastructure projects,” said Kristen Swearingen, ABC Vice President for Government Matters. “ABC calls on the congress and the president to find a better way forward.”