As you are aware, an outbreak of a respiratory disease caused by a novel (new) coronavirus that was first detected in Wuhan City, Hubei Province, China has now been identified in many locations internationally, including cases in the United States. The virus has been named “SARS-CoV-2” and the disease it causes has been named “coronavirus disease 2019” (abbreviated “COVID-19”).
Rider Levett Bucknall is dedicated to ensuring that employees are safe and, to the greatest extent possible, able to manage projects without disruption in service. We have done this by implementing an internal phased plan to address potential implications of COVID-19 in the event that it spreads at an increasing rate.
We are also committed to guiding our clients on potential risks to their construction projects that may come as a result of COVID-19.
There are several items of consideration to safeguard your projects; first be aware of contractual provisions that might come into play and how to handle issues concerning a potential suspension, termination, cancellation of the contract or a force majeure event. Be aware where legal responsibility will reside for cost overruns on construction projects. Clarify excusable delays and fully understand coverage of insurance policies.
It is critical that contractors and other relevant firms have project specific COVID-19 mitigation plans and that a project/site-specific disaster plan is in place.
Considering the possibility that a major outbreak in the U.S. occurs, workers may not want to risk reporting to job sites. Initially, it may be hard to get people to come back to construction sites, so contractors may have to pay a premium for employees to return. There is also the potential that governments could shut down major construction projects, or transportation infrastructure, in parts of the U.S. and Canada.
On the other hand, if COVID-19 continues to upset the financial markets and the economy as a whole, then it is possible that it will drive a recession which will eventually drive construction costs down, simply because there is less work.
Below are some additional preemptive measures to support a safe and functioning project during this time:
- Consider forward ordering, and early delivery of, material to avoid delays (however, additional storage areas for deliveries and double handling of materials for early storage may have cost implications)
- Encourage contractors, owners and other relevant firms to develop project specific COVID-19 mitigation plans.
- Encourage contractors, owners and other relevant firms to develop a project/site-specific disaster plans.
- Limit face-to-face meetings where possible.
- Endeavor to implement CDC recommendations within workplaces and project sites
It is possible that the COVID-19 outbreak will be contained and that the impact will be minimal, however, we are vested in our clients and projects and it is critical to provide relevant information so that everyone understand what this means for your construction projects and, most importantly, to have a plan in place.