States Sue for Gateway Funds As Work Stoppage Looms

What happened: The states of New York and New Jersey sued the Trump administration in federal court Feb. 3, claiming federal grant and loan funds for the new Hudson River Tunnel were being unlawfully withheld. The Gateway Development Commission (GDC), an entity formed by both states and Amtrak to administer the $16 billion package of projects, warned that work would stop at 5:00 pm Eastern on Feb. 6, without federal reimbursements. The GDC also filed suit in the U.S. Court of Federal Claims this week.

Congress and federal agencies previously committed $11 billion to Gateway. The U.S. Department of Transportation paused that flow of funding Oct. 1 amid political skirmishes over the federal government shutdown. At that time, the Department announced it would be reviewing Gateway’s contracting policies to ensure compliance with a new interim final rule for the Disadvantaged Business Enterprise (DBE) program, which took effect two days later.

Why it matters: In a Feb. 2 letter imploring President Donald Trump to release the obligated funds, Robert Wessels, executive director of the General Contractors Association of New York, an ARTBA chapter, noted, “funding uncertainty increases both cost and schedule, which can only harm the progress made thus far in a project that will benefit millions of riders along the Northeast Corridor. This runs contrary to the hard work our members have done to keep costs and schedules tight on this project, with much success to date.”

What’s next: A court hearing on the states’ lawsuit was scheduled for Feb. 6, prior to the scheduled work stoppage. The GDC stated that an interruption would result in “the immediate loss of nearly 1,000 jobs.”