Federal construction programs have taken a hit totaling several billion dollars under mandatory spending cuts that took effect March 1. Among the construction accounts absorbing the biggest reductions in the budget “sequester” are Dept. of Energy environmental cleanup at former nuclear weapons plants, Environmental Protection Agency water infrastructure and military construction.

Cuts to major construction programs will amount to more than $4 billion, according to an initial ENR review of a March 1 Office of Management and Budget report to Congress on the sequester.

That amount is in line with an early February Associated General Contractors of America report, which estimated that the sequester’s construction cuts “could exceed $4 billion.”

The silver lining for construction is that some infrastructure accounts financed by trust funds are exempt from the sequester, in part or completely. Those exempt programs include most federal-aid highway funding, all Airport Improvement Program construction grants and some transit aid.

All Dept. of Veterans Affairs programs, including VA’s major and minor construction accounts, also are exempt.

But the sequester has particularly bad news for New Jersey, New York and other Mid-Atlantic states starting to rebuild from the devastation caused by Hurricane Sandy last fall. In January, Congress approved, and President Obama signed, a bill providing $50 billion for relief, repairs and reconstruction after natural disasters, principally Sandy.

But the sequester slices $545 million from the $10.9 billion the Sandy spending measure contained in emergency transit aid and $101 million from its $2-billion allocation for highways.

In all, the sequestration directive that Obama signed late on March 1 requires $85.3 billion in spending reductions, divided evenly between defense and non-defense programs, according to OMB report. Unless Congress acts to undo, modify or postpone the sequester, its cuts remain in place through Sept. 30, the end of the current fiscal year.

The impact on specific federal construction contracts was not immediately clear. OMB Controller Danny Werfel said in a Feb. 27 memo to agencies,  “As a general matter, agencies should only enter into new contracts or exercise options when they support high-priority initiatives or where failure to do so would expose the government to significantly greater costs in the future.”