Rippeon Interviewed on How Government Shutdown Impacts Construction Contracts

Construction Dive interviewed Adams & Reese Partner Zack Rippeon in the article, “How the Government Shutdown Impacts Construction Contracts.”

“The most common surprise during a shutdown comes when contractors realize their agreements do not guarantee payment for work already performed, or that they must keep working anyway,” said Rippeon to journalist Sebastian Obando, with the industry trade publication.

“Some may discover, for the first time, that they’re required to continue working even if they don’t get paid timely. That discovery may require them to finance some, or all, of the work for extended time periods.”

Shutdowns often create confusion about whether work must continue, especially for partially funded projects. The result is a gray area where contractors fear both stopping and proceeding.

If a project’s funding was appropriated before the fiscal year began, work can usually continue, albeit with slower payment cycles. But if funds were not secured before the cutoff, “it will go dark for the foreseeable future because no funds are available during the shutdown,” said Rippeon.

Some contracts require continued performance regardless of payment status. That can force firms to self-finance operations until appropriations resume. Those without clarity risk disputes later, especially if subcontract agreements don’t flow down.

“For example, does the subcontract allow the contractor to demand the subcontractor continue performing, or provide for work stoppages or delayed payments?” Rippeon said. “And what damages are the subcontractors entitled to that the contractor may not be entitled to in such events?”

Rippeon added later in the article that “contractors working directly for a government agency should check for provisions allowing for work stoppages or suspensions upon written notice with corresponding cost and time recovery mechanisms. “Those provisions should match what contractors put in their subcontract agreements to ensure contractors aren’t stuck in the middle between the government owner and its downstream subcontractors and suppliers,” said Rippeon.

Zack Rippeon is a member of the Adams & Reese Construction Practice Group and a Partner in the Atlanta office. He brings decades of construction industry knowledge to Adams & Reese clients, both as an attorney and as a former contractor. An advisor, litigator, and counselor to all stakeholders in the construction and real estate industries, he defends contractors, subcontractors and others in a wide range of disputes, including breach of contract, delays, large-scale defects, structural failures, and payment issues. He also serves as project counsel, handling contracts, change orders, supporting documentation, and compliance counseling.

Within the construction industry, Rippeon is a board member of the ACE (Architecture, Construction, Engineering) Mentorship Program, which reaches out to high school students, provides hands-on CAD (Computer-Aided Design) and technology programs, and scholarships to both trade schools and four-year colleges. He is also a member of the Construction Law Section for the Atlanta Bar Association; Associated General Contractors, Georgia Chapter; Construction Education Foundation of Georgia; and Associated General Contractors of America.