[email protected]  |  866.303.5868

December 2025 |  Issue 8

Federal: Fallout from 2025 Government Shutdown

The 2025 federal government shutdown was the longest in U.S. history, spanning 43 days. It disrupted routine operations of federal agencies, including those that oversee construction oversight and compliance.

While appropriations have been restored through January 30, 2026, the interruption has exacerbated a backlog in permit reviews, project inspections, and agency oversight. This might delay federally funded projects or create confusion over compliance and safety oversight responsibilities as agencies resume activities.

 Takeaway:

1. Assert rights under FAR delay and suspension clauses immediately. Federal contractors should preserve claims arising from government-caused delays, inconsistent oversight, or stalled approvals.

2. Submit REAs early and do not wait for final agency guidance. With administrative offices working through months of backlog, REAs submitted now may not be addressed promptly. Early submission preserves the contractor’s place in the queue and demonstrates timely notice.

3. Expect slower inspection cycles and plan around them. Agencies facing staffing shortages and accumulated requests may prioritize projects based on risk and funding cycles.

4. Maintain strict compliance even if oversight is inconsistent. During the restart phase, agencies may conduct targeted or catch-up inspections. Contractors should assume enforcement will resume with full authority.

5. Communicate early with contracting officers (COs). COs may lack immediate clarity about timelines or process resumption.

6. Reforecast schedules. The shutdown has created uncertainty in federal workflow, and agencies may adjust policies or procedures as operations normalize. Contractors should revise internal schedules to reflect expected inspection delays, possible slowed payment cycles, potential funding reallocations, and impacts on long-lead materials requiring federal approval.

Case Law Update

Your AI Chats Are Discoverable

In In re OpenAI, Inc. Copyright Infringement Litigation, MDL No. 25-3143 (S.D.N.Y.), arising from The New York Times’ copyright suit against OpenAI and Microsoft, U.S. Magistrate Judge Ona Wang ordered OpenAI to produce 20 million anonymized ChatGPT user logs in discovery.

In a decision made public on December 3, 2025, the court rejected OpenAI’s privacy-based objections, holding that de-identification measures and protective orders were sufficient to protect user data and that the logs were relevant to the publishers’ copyright claims and defenses. The ruling underscores that ordinary discovery rules apply to generative-AI data: chat logs are treated as electronically stored information (ESI), and relevance and proportionality control whether they must be preserved and produced.

 Takeaway: Conversations with AI are not automatically private or privileged. Using a public AI tool doesn’t create attorney-client privilege or guarantee confidentiality. Chat logs (prompts and responses) can be treated as electronic stored information (ESI), subject to preservation obligations once litigation is reasonably anticipated. If those logs are relevant to a claim or defense (e.g., copyright issues, contract disputes, employment complaints, intent evidence), courts may order their production, even if the user tried to delete them.

Contract Provision of the Month – Temporary Access and Staging Area Control Provision

Context: On many commercial and industrial projects, one of the biggest unaddressed risks involves access, delivery routes, laydown space, and staging areas. Without explicit contractual control, contractors often face delays caused by owners or other trades blocking access routes, loss of critical laydown areas due to design changes or other trades “taking over” areas, increased labor and equipment costs when material handling requires longer routes, reduced productivity from congested sites or restricted work hours, and disputes over who is responsible for access interruptions.

These impacts are rarely compensated unless the contract includes a clear, enforceable provision allocating responsibility. A Temporary Access & Staging Area Control clause protects

the contractor’s ability to perform efficiently and

gives a basis for time extensions, cost recovery, and dispute resolution when access is disrupted.

Sample provision:

The Owner shall provide the Contractor with adequate and continuous access to the Project site, including all delivery routes, loading zones, laydown areas, staging areas, and material-handling paths identified in the Project schedule or as reasonably required for performance of the Work. The Contractor shall not be responsible for delays, disruptions, inefficiencies, or increased costs arising from interference with, obstruction of, or reduction in access, staging, or laydown areas caused by the Owner, the Owner’s separate contractors or trades, design professionals, tenants, or other third parties. In the event access or staging areas become unavailable or materially impaired, the Contractor shall be entitled to an equitable adjustment in the Contract Time and Contract Sum to the extent its performance is impacted. The Owner shall promptly relocate or restore such areas to maintain the Contractor’s planned sequence of work. Nothing in this provision limits the Contractor’s rights under any other contract clause governing delays, suspensions, or changes.

The commercial roofing market continues to report record activity, but a deeper look reveals that a significant portion of this growth is concentrated in one sector: data center construction. The rapid expansion of artificial intelligence, cloud computing, and hyperscale server demand has created unprecedented pressure for new facilities. Roofing contractors have benefited from a market where square footage, speed, and technical complexity all point to steady revenue.

However, the surge in data center development is also creating a distortion in the commercial roofing outlook. Many industry reports show commercial construction spending rising at levels that do not reflect a broad-based market rally. Instead, spending is being driven disproportionately by data centers in select geographic clusters such as Northern Virginia, Central Ohio, Iowa, Oregon, and parts of Arizona and Texas. When those numbers are removed, the commercial sector looks far more modest, and in some regions, flat.

This creates a challenge for contractors, manufacturers, and policy analysts who use national construction data to forecast demand. The overall numbers appear strong, but they overrepresent a single, highly specialized segment that is not reflective of typical commercial roofing activity. Understanding how and why this distortion is occurring is essential for anyone who makes budgeting, staffing, or strategic planning decisions in the roofing industry.

A modern hyperscale data center often requires thousands of square feet of roof area. These buildings are typically low-slope structures with heavy mechanical loads, specialized insulation assemblies, and redundant waterproofing. They also follow highly compressed construction schedules, with many facilities built in phases over 18 to 36 months. For roofing contractors, this means multi-year projects with predictable revenue streams and opportunities for repeat work as tech companies expand footprints.

The scale of these projects alone can elevate a region’s commercial roofing numbers for several quarters. When multiple campuses are developed simultaneously, which is currently the case in Ohio, Iowa, and Virginia, the effect is magnified, giving the impression of broad commercial expansion where, in reality, the activity is concentrated in a handful of mega-projects.

The concern is that this upward pressure on market data may encourage some contractors to overextend staffing, inventory, or overhead in anticipation of continued growth that is not guaranteed. While AI-driven computing has accelerated demand for data center space, the pace of construction is not sustainable indefinitely. History shows that technology-driven booms often plateau once efficiency gains or new technologies emerge.

Quantum computing, advanced chip architecture, and next-generation server efficiency are likely to reduce the footprint required for equivalent or greater processing  

power. Today’s hyperscale centers could be replaced by far smaller, more energy-efficient facilities over the next decade. Additionally,

governments worldwide are beginning to question the power demands, water management, land use impacts, and tax incentives associated with constant data center expansion. Local moratoriums, zoning restrictions, and utility-capacity limits are already slowing certain markets.

Once AI adoption moves from its current rapid-growth phase to a more stable utilization phase, demand for new data center construction will naturally level off. When that happens, the artificial inflation in commercial roofing numbers will decline as well. Contractors who rely heavily on this sector may face sudden gaps in backlog, especially if broader commercial construction remains muted.

This does not mean the data center sector will collapse; rather, it will normalize. Developers will transition from explosive expansion to targeted optimization, retrofits, and selective new builds. The massive pipeline of current projects will eventually taper, and contractors who prepared for a continuous upward trajectory may find themselves overextended.

Roofing contractors should evaluate their exposure to these mega-projects and consider strategies to balance portfolios. Diversifying into institutional, industrial, service, or reroofing markets can stabilize revenue when the data center cycle slows. Contractors should also exercise caution when expanding labor forces or investing in major equipment solely to meet temporary data center demand.

From a policy perspective, industry groups and economists should also be mindful of the distortive effect these projects have on national construction indicators. Inflated commercial numbers can lead to inaccurate assessments of contractor capacity, material shortages, workforce needs, and economic health. Separating data center construction from general commercial reporting would provide clearer insight into the true condition of the market.

The roofing industry thrives when it anticipates change rather than reacting to it. By recognizing the temporary inflation created by data center construction and preparing for the eventual contraction, contractors can position themselves for long-term stability in a market where innovation is constant and cycles evolve quickly.

Upcoming Speaking Engagements & Events

• Chicago Roofing Contractors Association, Trade Show & Expo, Keynote Speaker, January 14-16, 2026, Chicago, IL

• World of Concrete, Defending ICE Raids and I-9 Audits, January 19, 2026, Las Vegas, NV

• International Roofing Expo, Keynote Panel, January 20, 2026, Las Vegas, NV