Legislation to extend temporary funding to the FAA has stalled as the Senate has left for vacation (and perhaps some pre-Labor Day campaigning). Of course, this temporary status has now gone through 20 extensions over the past 4½ years. FAA employees have been furloughed. $200 million dollars in airline taxes per week, part to fund airport construction, will not be collected (perhaps deferred, perhaps never). Airport construction has been stopped indefinitely.
Do these stoppages constitute an excusable delay to these projects? Do these stoppages constitute a compensable delay to these projects? What are the additional costs caused by these indefinite interruptions, and who will ultimately pay for such?
The question of who will bear the ultimate costs rests largely on the specific language of contracts, both of primes, subs and vendors. But a lot will also depend upon the reasonable expectations of the parties when such contracts were drafted and signed. The question of ultimate costs also depends upon both our legislators and the current expectations of the parties. Whether Congress is deemed the Owner or merely Force Majeure is a matter of law – decisions on how to mitigate the situation are more local affairs.
Some work in place will deteriorate if not continued nor buttoned up in a reasonably short time. Somebody has to determine if we have a situation calling for temporary measures to buttress such work-in-place, perhaps utilizing emergency funds. The degree of mothballing will require an estimate of duration of shut-downs. A less than perfect guess will only add to the ultimate cost.
Do we keep cranes and other equipment in place on site, or permit or require partial demobilizations? A subcontractor, unable to utilize its equipment but still required to pay leasing charges, may not be here in two months if this issue lingers. But in the current market, without the cash flow of this project, the sub may not be here in two months in any case. Perhaps it may be best to allow each lowest tier to choose to stay or leave, allowing the next level to then re-shop remaining work to facilitate the lowest total cost to the owner.
Certainly, as a professional scheduler, I would suggest the project be re-baselined during this forced shutdown, looking at remaining scope as a new project rather than attempting to merely pick up where matters were left. Even if the project was perfectly on schedule before this issue arose, we have a new scope (such as removal of the temporary mothballing) in front of us. If the project has experienced delays to date, the silver lining of this issue may be the time to rethink how to attack the remaining scope.
Top level administrators of the FAA acknowledge that even a few weeks at this crucial time may mean loss of an entire construction season. It may be more economical for some projects to decide now to shut down until Spring. It may be more economical to determine if some selective overtime now may mitigate the issue. Perhaps the swinging of hammers must cease for a few weeks – but we construction professionals still have a lot of work to do this week.