As the shutdown of the federal government enters its second week, its impact on federally funded construction projects has been somewhat muted because of the way that certain federal agencies receive their funding. For example, because the Federal Highway Administration is funded by the Highway Trust Fund, which still has funding through the end of the 2014 fiscal year, the shutdown has virtually no impact on any Federal Highway Administration construction projects. The Airport Improvement Program is also funded by a trust, and thus, the federal government shutdown will have much less of an impact on Airport Improvement Program construction projects. Other agencies, including the Federal Transit Administration and the Federal Aviation Administration are not funded by a trust fund, and therefore, the government shutdown will have a much more significant impact on those agencies’ construction projects.
Overall, however, because funding has already been appropriated for most ongoing and already awarded direct federal construction projects, the federal government shutdown will have virtually no impact on ongoing and already awarded contracts. Rather, the furloughs of non-essential government employees has suspended pending solicitations and awards, including task orders for existing multiple award contracts, until the shutdown comes to an end.
More information on the impact of the shutdown on federal construction contracts is available at the Association of General Contractors’ website. The source of the information in this post is available here.
In October 2010, the Small Business Administration implemented the Women-Owned Small Business Program, which authorized contracting officers for federal agencies to set aside certain federal contracts for eligible and qualified Women-Owned Small Businesses and Economically Disadvantaged Women-Owned Businesses. Under the program, however, those set-asides were capped at $6.5 million for manufacturing contracts and $4 million for all other contracts.
However, the 2013 National Defense Authorization Act, which President Obama signed into law earlier this year, removed the statutory limits for set-asides for Women-Owned Small Businesses and Economically Disadvantaged Women-Owned Businesses. Recently, the Small Business Administration issued an Interim Final Rule officially removing dollar value limits on set-asides for Women-Owned Small Businesses and Economically Disadvantaged Women-Owned Businesses. A copy of the new Interim Final Rule, which details the new parameters under which set-asides may be made, can be found by following this link.
A recent article in the Engineering News-Record details a report titled “The Interpersonal Cost of Conflict in Construction” issued by the Center for Construction Research and Training. The report reviewed and analyzed 41 conflict incidents that arose on various construction projects and determined that each conflict resulted in an average of 161.25 hours (or approximately 20 days) of lost time due to managing the conflict. The report also indicated that the average cost of a cost of each conflict was $10,948.00. Finally, the report determined that the primary trigger of conflicts attributed to interpersonal issues is most often actually an issue stemming the construction process.
This report emphasizes the importance of coordination between the various trades and the need for open communication between the contractors and subcontractors on a project. Based upon this report, it is clear that proper coordination and planning of the construction process can result in a considerable savings in the form of avoidance of costly and time-consuming conflicts.
The entire Center for Construction Research and Training report may be accessed by following this link. The ENR article summarizing the report is available here.