Work on two of New York City’s largest infrastructure projects — the Gateway Program and the Second Avenue subway — continues for now, despite an $18 billion federal funding pause that has cast uncertainty over their future.
The U.S. Department of Transportation (DOT) announced last week that it had frozen reimbursements while launching an administrative review of how the Metropolitan Transportation Authority (MTA) and the Gateway Development Commission (GDC) apply race- and sex-based contracting rules under the Disadvantaged Business Enterprise (DBE) program.
According to the agency, the review aims to ensure “taxpayer dollars are not subsidizing infrastructure contracts based on discriminatory principles.” The department also noted that the ongoing federal government shutdown has furloughed key civil rights staff, further delaying completion of the review process.
Among the paused disbursements is a $300 million payment for the Second Avenue subway extension, part of the funding flow now in limbo.
Despite the uncertainty in Washington, project leaders say operations remain stable. Thomas Prendergast, CEO of the Gateway Development Commission, confirmed the freeze but emphasized that field work continues.
Tutor Perini, the California-based contractor handling portions of the Gateway Tunnel, is pressing ahead without major changes.
“We do not anticipate any significant impact on our work on the Manhattan Tunnel project, a component of the Gateway Tunnel project,” said Jorge Casado, senior vice president of investor relations at Tutor Perini. “Because we do not anticipate any significant impact, we are currently not making any special adjustments to schedules or our workforce.”
Casado added that the company maintains an “excellent working relationship” with the GDC and remains focused on compliance and progress.
Industry leaders say that even temporary federal funding pauses can send ripples through the construction sector. Carlo Scissura, president and CEO of the New York Building Congress, said predictability is vital for an industry built on long-term planning.
“This is an industry that likes stability,” Scissura said. “When [contractors] feel like, at any given time, government could do something like this, that’s where the worry comes in because you have to remember, this industry has to plan out ordering materials, hiring staff workers, getting people trained to do certain jobs. So, it takes time and stability becomes critical.”
Scissura said no immediate disruptions have hit jobsites, but warned that prolonged uncertainty could change that.
“Right now, there’s really no effect,” he said. “The work continues, there are people on the job today. The real question is down the road. In a few weeks, if things haven’t moved and the federal government hasn’t released the pause, then we may have questions.”
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Scissura noted that other major New York projects — including JFK Airport’s modernization, the Port Authority Bus Terminal redevelopment, and Amtrak’s upcoming Penn Station renovation RFP — are continuing as planned.
“Really, the only two megaprojects that the government is looking at today are these two: Gateway and Second Avenue,” he said.
At the national level, industry associations warn that the episode highlights how fragile large-scale federal projects can be.
“This is just another reminder of the many challenges contractors and transportation officials have to overcome when attempting major, vital new infrastructure projects,” said Brian Turmail, vice president of public affairs and workforce at the Associated General Contractors of America (AGC). “It is a reminder of the need to reduce the many layers of regulatory and permitting reviews, and the amount of time and resources required, to build a project virtually everyone agrees is absolutely necessary to the local, regional and national economy.”
Turmail added that while most projects remain funded, longer shutdowns and delays could stall progress on future phases.
“Most federal construction projects are already funded and work should be proceeding,” Turmail said. “But the longer the shutdown lasts, the longer contractors will have to wait for change orders to be improved, inspections to be completed and next phases of work approved.”
While fieldwork continues on both megaprojects, the political and financial uncertainties surrounding the federal funding review have left stakeholders uneasy. A prolonged freeze could disrupt cash flows, delay reimbursements, and complicate planning for future phases.
For now, New York’s biggest transit investments — long hailed as symbols of resilience and modernization — remain on track. But as Washington’s review drags on, contractors, local leaders, and commuters alike are left waiting for clarity on how deep the impact might go.
Originally reported by Sebastian Obando in Construction Dive.
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