Dive Brief:
- The Gateway Development Commission restarted work on the Hudson Tunnel Project this week, but only in limited fashion, according to a U.S. Court of Federal Claims case filed on Monday.
- Though the DOT already disbursed more than $205 million, nearly $19 million from a January reimbursement request remains outstanding and is due on March 2, according to the filing. DOT has also refused to confirm it will not attempt to claw back previously released funds if a temporary restraining order restoring payments is stayed on appeal.
- That back-and-forth on funding has already delayed two major contracts on the $16 billion infrastructure project, including the Hudson River tunneling package, according to the filing. GDC said in its filings that the previous work suspension on the project resulted in “millions of dollars in additional costs, including those for additional security at work sites for the duration of the shutdown.”
Dive Insight:
The GDC’s latest filing shows the fight for funding and construction continuity is far from over.
President Donald Trump’s administration initially paused funding on Sept. 30, 2025, to launch an administrative review of GDCs’ race- and sex-based contracting goals under the federal Disadvantaged Business Enterprise program. The administration subsequently stripped those criteria from the program.
The funding pause triggered a breach-of-contract lawsuit from GDC in early February after more than $205 million went unpaid. A federal judge ordered DOT to resume funding earlier this month, and GDC subsequently received those past-due dollars .
But the DOT is now actively seeking to stay the temporary restraining order that required the disbursements in the first place. It has also declined to confirm it would not attempt to reclaim funds if the order is overturned, according to the GDC filing.
DOT’s press office did not immediately respond to a request for comment.
“Certainty of funding is exactly what GDC’s Grant and Loan Agreements with DOT are designed to confer,” the GDC said in its filing. “As things stand, DOT could attempt to reclaim the money it has paid under the [temporary restraining order] at any time — potentially forcing another costly work suspension.”
That threat forced GDC to defer awards of major construction contracts needed to maintain its established schedule. The agency also recently issued letters limiting work for professional service contractors on the project, according to the filing.
Though federal funds did flow to GDC earlier this month, financial pressure is still on the horizon.
An additional $18.9 million reimbursement request for January costs comes due next week, and February cost claims will be due on April 1, according to the filing. DOT has not guaranteed payment of those amounts if the restraining order is lifted.
“DOT has refused to confirm that it will pay that money if the [temporary restraining order] is stayed, meaning that GDC may soon have to amend its Complaint to add a breach of contract claim for the March breach,” according to the filing. “Again, GDC has no certainty as to whether those claims will be paid or whether DOT will breach again, especially because of the government’s own decision to continue appealing this [temporary restraining order] before the Second Circuit.”
