With time running out to raise our nation’s debt limit by this Thursday, Oct. 17 and the government entering its 15th day of being shutdown, House and Senate leaders are working to cobble together deals in their respective chambers. This morning, Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell are expected to brief their Senators on a compromise deal that materialized yesterday.  Terms of the tentative deal include: a debt limit increase through Feb. 7, 2014; funding the government at post –sequester levels of $986.3 billion through Jan. 15, 2014, while providing some flexibility in case the sequester-imposed $10 billion spending cuts go into effect in January; an agreement on an immediate bicameral conference on the budget and on a long-term tax and spending plan, with a deadline for a final conference agreement by Dec. 13; and two Obamacare-related provisions requiring income verification for those individuals receiving a subsidy and a delay of a reinsurance tax, which would levied on health insurance companies which will ultimately be passed on to small businesses and employees who are covered by their employer. If Senators from both parties sign off on the deal, it can be considered on the Senate Floor as early as Wednesday afternoon. 

Proposed Rule Would Limit Federal Contractor Response Time to Evaluations On Oct. 7, AGC submitted comments objecting to the Federal Acquisition Regulation (FAR) Council’s proposed rule that would shorten the minimum 30-day past performance evaluation (PPE) review period for federal contractors to just 14 days. Under the proposed rule, a federal agency must post the PPE to the Past Performance Information Retrieval System (PPIRS) after the 14-day contractor review period expires, whether the contractor objects to the PPE or not.  Contractors, however, would be able to submit comments for inclusion in the PPE on PPIRS if they fail to meet the 14-day requirement. The proposed rule does not require the government to make those changes in a defined amount of time, which AGC indicates in its comments.

AGC Calls for Agency Economic Justification for Bundling & Increased Oversight On Oct. 10, AGC submitted testimony to the House Small Business Subcommittee on Contracting and Workforce, which held a hearing on the impact of federal contract bundling on small businesses. While not opposed to the U.S. Army Corps of Engineers’ (USACE) use of Multiple Award Task Order Contracts (MATOCs) or the Naval Facilities Engineering Command’s (NAVFAC) use of Multiple Award Construction Contracts (MACCs), AGC noted federal agencies increasing use of these contracting vehicles and those contracts’ ability to shut out many contractors from federal work for long periods of time.

Information for Construction Contractors Operating Under the Federal Government Shutdown The fiscal year 2013 appropriations law expired October 1, 2013, the beginning of FY 2014.  The failure by lawmakers to reach an agreement on funding for the new fiscal year resulted in a federal government shutdown.  The shutdown has left contractors wondering how or even if they can continue to perform their federal contracts.  Construction contracts awarded on a fixed-price basis will be substantially unaffected by the shutdown.  However, for most cost-type contracts, time and materials contracts, IDIQ/MATOC/MACC contracts, and those contracts that have yet to be awarded, the shutdown will likely suspend operations completely.  Therefore, it is important for contractors to prepare for the consequences of a government shutdown.

The House and Senate were unable find compromise and pass a continuing resolution (CR) by last night’s 12:00 a.m. deadline. Congress failed to enact any of the twelve appropriations bills that annually are necessary to fund government functions. Therefore, as of today, the federal government has been shutdown, furloughing about 800,000 federal workers and suspending most non-essential federal programs and services. For direct federal construction contracts, the vast majority of ongoing and already awarded contracts are not impacted by the shutdown. However, pending solicitations and awards, including task orders for existing multiple award contracts, will be delayed until the shutdown is over. In addition, agency action on permitting and project management decisions will likely face delays.

Total construction spending hit an unknown level in August because the Census Bureau was unable to release new data as a result of the federal government shutdown according to AGC of America. Association officials cautioned that the impacts of the shutdown will go beyond data as solicitations for many new construction projects come to a halt.

Because of the uncertainty of government funding over the next few days, AGC has compiled a Government Shutdown Resource Center that includes information on what contracts will be in jeopardy and which will be unaffected.  The document also gives advice on how to proceed with federal owners if certain approvals may be needed or if there are question about how to bill costs associated with delays caused by the government shutdown.

What You Need to Know Now: Preparing for a Possible Government Shutdown The fiscal year 2013 appropriations law currently funding government operations, including many federal contracts, will expire on October 1, 2013, the beginning of FY 2014. A failure by lawmakers to reach an agreement on funding for the new fiscal year will result in a federal government shutdown. The possibility of a shutdown has left contractors wondering how or even if they can continue to perform their federal contracts. Construction contracts awarded on a fixed-price basis will be substantially unaffected by the shutdown. However, for most cost-type contracts, time and materials contracts, IDIQ/MATOC/MACC contracts, and those contracts that have yet to be awarded, the shutdown will likely suspend operations completely. Therefore, it is important for contractors to prepare for the consequences of a government shutdown.

On Sept. 11, House Transportation & Infrastructure Chairman Bill Shuster (R-Pa.) joined with Committee Ranking member Nick Rahall (D-WV) to introduce the Water Resources Reform & Development Act of 2013 (WRRDA), H.R. 3080, which authorizes approximately $10 billion for new construction projects through the U.S. Army Corps of Engineers’ (USACE) Civil Works program (i.e., navigation, flood control, locks, dams, and environment restoration).  Take action and urge your U.S. Representative to support H.R. 3080.

Government Shutdown Possible Over Differences of Opinion about How to Defund Obamacare  This week, the House Appropriations Committee introduced a continuing resolution (CR) to fund the daily activities of the federal government, from the start of the fiscal year (FY) on Oct. 1 through Dec. 15, 2013.  The CR will fund the government at current post-sequestration levels of $986 billion, which is nearly $20 billion more than House-passed budget levels for FY 2014 and nearly $70 billion lower than the budget levels passed in the Senate for FY 2014.  The CR is necessary because the House and Senate have failed to enact any of their 12 annual appropriations bills.  The length of the bill is intended to allow congressional leaders and the president to deal with the need to raise the nation’s debt ceiling and other budget issues without the threat of a government shutdown.