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www.uslaw.org U S L A W
What the Construction Industry Needs to Know to Navigate COVID-19 Peter J. Martin and Thomas P. Banas
In early March of this year, the global coronavirus pandemic (“COVID-19�) entered all of our lives creating disruption, concern, and uncertainty. While the construction industry, for the most part, was considered essential, construction projects nevertheless continue to be impacted by COVID-19. The declared states of emergency nationwide, travel restrictions, quarantines and current and future COVID-19 cases have caused, and will cause, project delays, labor shortages and supply-chain effects. This will likely lead to project delays and increased costs, including extended general conditions, lost productivity, material escalation, labor escalation, storage costs, extended home office overhead,
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increased travel costs and increased shipping costs. While stemming this pandemic and ensuring public safety is of the utmost importance, construction industry professionals must also take practical steps to mitigate project impacts and financial harm. We examine some of the hurdles COVID-19 presents and potential strategies for navigating those challenges. UNDERSTAND AND PROTECT YOUR RIGHTS It remains exceedingly important that parties review contract provisions to understand and assess their obligations, risks and rights. Importantly, parties should pay par-
ticular attention to notice provisions, claim dispute provisions, change order procedures, time extension provisions and force majeure clauses. While some contracts specifically spell-out pandemics as qualifying as a force majeure event, many are silent. Given the novel situation presented by COVID-19, there is little case law to guide the courts or arbitration panels who will interpret contract language. Additionally, real time documentation of COVID-19 impacts is key to presenting and pursuing time and cost claims and, in many cases, such documentation is required by contract to be submitted with such claims. This documentation consists of contempo-
