The current COVID-19 health crisis has created challenges for everyone. See below for my thoughts on the key issues facing contractors.
Construction Contracts:
The majority of construction projects are subject to liquidated damages if the pre-agreed Completion date is not achieved. My advice to any contractor is to be sure to get any contractual notices issued, such as Early Warnings, then speak directly to the client and explain that a pragmatic solution needs to be agreed that works for everyone. There is no point in a client levying liquidated damages against a contractor for missing a Completion date if it was outside their control. In this scenario, the legalities of Force Majeure, along with the textbook instructions of a formal building contract may best be put aside and a workable solution agreed which allows the project to be safely completed, though only when the time is right. I suggest an expert in contract law should be engaged in such circumstances. I recommend William Brown, Senior Associate at Quigg Golden.
Insurance:
Get ready early for a challenging renewal. Expect heightened underwriter focus on COVID-19 impact. My advice is to commence the renewal process earlier than normal, and to seek advice from your Broker on anticipated changes.
Constructionline:
Constructionline has a new section on COVID-19. Contactors should take the opportunity to update it. This will help potential clients identify who is mobilised for new contracts.
Tenders Submitted:
If a contractor priced a tender before the health crisis developed, and has recently been offered the contract, it would be prudent to review the pricing. To abide by the new Standard Operating Procedures, which were recently published by the Construction Leadership Council, it will almost definitely cost more. With the uncertainty ahead, supply chain members should be engaged to establish if existing quotes are still valid.
Current and Future Bids:
Be mindful of the new restrictions when pricing tenders in the immediate future. How the Standard Operating Procedures will work in practice are ultimately unproven. Examples of changes to be mindful of include:
Welfare provision on sites will have to change to accommodate more provision for hand washing.
Sign-in/out ideally needs to change to avoid operatives physically signing a page.
The finishing stages of a project often involve multiple trade operatives all working simultaneously in close proximity. Additional time may need to be added to a Programme in the form of time risk allowance to allow for social distancing to be accommodated.
Construction workers in recent years have been encouraged to vehicle-share to minimise carbon emissions when travelling to site. Costs may increase if workers are asked to travel in separate vehicles.
Staff:
Talk to your staff to maintain a team atmosphere. I heard of one contractor who recently had a Friday afternoon Zoom social for all their staff working from home. Sit back with a cuppa or a beer - your choice!
Useful links:
For projects in Northern Ireland visit: www.cefni.co.uk
For projects in Republic of Ireland visit: 'Return to Work' Resource Pack issued by Construction Industry Federation. https://cif.ie/2020/04/27/the-cif-key-guidance-notes-for-the-construction-sector
Enjoy the Positives:
I have been working from home and keep a structured 9-5 routine. Now that my 5-year old son is not at school I set aside time, usually around 1pm each day to play football with him in the garden. It’s been precious family time that might never have happened without the crisis - so every cloud.
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