March 20, 2020
The COVID-19 pandemic and response necessitated thereby are having a profound impact on the construction industry. Contractors, architects, subcontractors and suppliers are facing supply chain disruption and workforce unavailability, which problems will likely deepen with no immediate end in sight to the challenges presented by COVID-19. In turn, owners, developers and lenders are experiencing the consequential effects of such material and labor shortages, as well as increasing restrictions, that result in stalled or terminated projects. Grappling with this rapidly-evolving situation, parties are attempting to determine their rights, remedies and obligations.
Whether an owner, developer, architect, design-builder, construction manager, contractor, subcontractor or supplier, it is important to promptly determine and continually reevaluate risks and options going forward. With respect to contractual provisions in construction agreements, below are some areas of focus in light of the conditions caused by COVID-19:
Review of Contractual Provisions
Other Items to Address
Steps should also be taken to protect personnel as well as the community. Most human resources and IT departments are actively determining best practices and providing support, balancing an effort to keep necessary business running, if and to the extent possible, while maintaining compliance with the requirements and recommendations of government and health professionals. The Associated General Contractors of America (Houston Chapter) recently published COVID-19 recommended practices for construction jobsites (as of March 17, 2020).
Planning ahead in good times helps lessen the inevitable negative effects of disaster when it hits. Addressing the present issues at hand and planning the appropriate next steps, both immediate and long term, will help mitigate the continuing challenges of COVID-19.