Construction Projects: How to tackle the unknown impacts of Covid-19

At a time when the Rebuilding Together budget shows the Government reaching deep into its economic trouser pocket to stimulate activity in an effort to reduce the Covid shock, at White Associates we anticipate a massive period of unknowns for our industry.

Among our significant learnings over the past seven weeks, this is one that we hope might help you emerge from your bubbles into this new world of rapidly shifting uncertainty:

Get together to tackle consequences and compensation

The consequences of the total construction shutdown under Level 4 are not just economic in nature. Commercially, many contractors will understandably seek compensation after losing money as sites, staff and machinery sat idle. We are now grappling with the idea of ‘your project will be late’, resetting timelines and assessing contractor entitlements.

The consequences of level 4 are almost straightforward in comparison with the complexities involved in assessing and resolving entitlements arising as a result of Level 3 restrictions. Allowed to do some work, contractors had to operate under a complicated social distancing regime, which had the effect of slowing things down – working, but not as efficiently as before. It is more complicated to determine the effects of Level 3 on delivery programmes. Will it prolong project durations or cause increase costs? How much should contractors be compensated for time and cost, and their subcontractors?

These are the high-level factors impacting project delivery.

But the challenges don’t end there. We also have to consider the impact of closed/restricted borders. With various elements of materials and labour imported, will costs escalate? It may be prudent to consider, locally sourced, alternative products.

Every little aspect will have implications on programme and budget.

When faced with a plethora of challenges, you need a great team of consultants to help manage your contract and budget. You want to have good people on your side, actively engaging with the contractor to find pragmatic solutions.

Avoiding massive contractual claims, maintaining open conversations and finding ways forward as a team – these must be key priorities going forward.

We encourage project stakeholders to sit down with their QS to identify risks, defuse issues and establish a constructive way forward.

4 ways to tackle the unknowns:

  1. Understand your liabilities
  2. Get good advice
  3. Ensure you have the right team in place
  4. Get together now: sit down with your project team, assess your situation and try to sort things out.