September 16, 2022
Best Practices for Mitigating COVID‑19 Impacts on Construction Projects
This blog post is the eighth in a series of eight that summarize the potential impacts of the COVID-19 pandemic on the construction industry, including the potential applicability of typical contract clauses to the impacts, best practices for mitigation of the impacts, and recommendations for avoiding claims related to COVID-19 in future contracts.
This blog post summarizes information published in articles and blog posts by various attorneys and law firms, and the intent is to provide a brief summary that may be beneficial to owners and contractors. This post is not written by attorneys and does not constitute legal advice.
Several authors discuss best practices for mitigating the risk of COVID-19 impacts on construction projects. These best practices include increased site and office hygiene, reviewing applicable contract clauses in detail and providing required contractual notice of adverse events and delays, documenting adverse events in detail, and maintaining detailed project records as discussed below.
In “COVID-19: Impacts and Responses in the Construction Industry,” Baker McKenzie, January 2021, the authors write that minimizing COVID-19 spread in the workplace should be a top priority. The authors suggest that owners take steps to minimize the spread including using cleaning chemicals approved by local agencies for cleaning frequently touched surfaces, screening all employees and visitors for COVID-19 symptoms, performing temperature checks, employing pre-access questionnaires, ensuring proper ventilation, and establishing quarantine protocols. The authors also discuss the importance of complying with all local health orders, including social distancing and shutdown orders, and being prepared for possible on-site governmental inspections where the owner may be asked to produce records such as a pandemic plan, personal protective equipment (PPE) and periodic testing guidelines, and medical records related to employee exposures.
In “Tackling the Impacts of COVID-19 on Construction Projects: An Exploration of Contractual Dispute Avoidance Measures Adopted by Construction Firms,” International Journal of Construction Management, 11 August 2021, Babatunde A. Salami, Saheed O. Ajayi, and Adekunle S. Oyegoke discuss the results of a survey they performed regarding COVID-19-related dispute avoidance measures in the construction industry. Salami et al. write that the most frequently employed mitigation measures include maintaining good relationships, instructing employees to report potential dispute risks, collaboration amongst the contracting parties, proactive decisions on who will authorize site closures, and reviewing contract clauses to verify contractual notice requirements.
In “How to Advise Construction Clients to Maintain Contractual and Commercial Hygiene During COVID-19,” American Bar Association, 17 July 2020, Luke R. Conrad and Molly E. Manson of Hinckley Allen & Snyder discuss the importance of documenting adverse events; the importance of proper record keeping including progress reports, daily logs, change orders, schedule updates, meeting minutes, and safety plans; and the importance of adhering to best practices during the bid stage such as submitting questions, performing due diligence, and clarifying the scope and risks.
Conrad and Manson also write that while disruptions in supply chains may lead the contracting parties to quickly agree to substitute specified materials to avoid delay, contract adherence regarding formal approval of material substitutions is still important. Additionally, in “COVID-19 Impacts on Construction Contracts: Legal Arguments For and Against Performance,” JD Supra, 13 September 2021, Laurie Stanziale of Fox Rothschild LLP writes that best practices for mitigating material price increases after contract execution include monitoring of costs and pricing, allowing for early purchases of materials, and good communication amongst contracting parties regarding notice of market changes.
Several authors broadly discuss the importance of reviewing contracts and applicable law for clauses that may provide relief for COVID-19 schedule and cost impacts, the importance of satisfying contractual requirements regarding notice of COVID-19 impacts, the importance of documenting and communicating COVID-19 impacts and taking reasonable steps to mitigate losses, and the importance of preserving contemporaneous project records. Discussions of these suggested measures can be found in: “Construction Contracting and COVID-19: Negotiating in Uncertain Times,” by Karen A. Denys and Rachael E. Stack of Faegre Drinker, 10 August 2021; “COVID-Related Construction Claims: 4 Key Strategies for Recovery,” by Nichole Atallah of PilieroMazza PLLC, JD Supra, 24 February 2021; “COVID-19: Legal Impact on Contractual Obligations,” by Julia Zagonek and Pavel Boulatov of White & Case, 30 March 2020; “How Should the Impact of the COVID-19 Outbreak Be Managed on Projects under FIDIC and NEC?,” by Rebecca Shorter, Charles Nairac, Dr. Markus Burianski, Dr. Dimitar Kondev, and Yasmine El Achkar of White & Case, 31 March 2020; “COVID-19: The Current Impact on Construction and Engineering Projects,” by Julian Bailey, Nicolas Bouchardie, and Ignacio Madalena of White & Case, 14 April 2020; and “COVID-19’s Impact on Construction: Is There a Remedy? – Time Extension, Force Majeure, or More?,” by William J. Shaughnessy, William E. Underwood, and Chris Cazenave of Jones Walker LLP, The National Law Review, 3 April 2020.
As detailed above, several authors discuss best practices for mitigating the risk of COVID-19 impacts on construction projects. These best practices include increased site and office hygiene, reviewing applicable contract clauses in detail, providing required contractual notice of adverse events and delays, documenting adverse events in detail, and maintaining detailed project records.
Suggestions for Considering COVID‑19 in Negotiation Strategies for Construction Contracts
This is the seventh post in an eight-part series that summarizes potential impacts of the COVID‑19 pandemic on the construction industry.
Applicability of Suspension and Termination Contract Clauses for COVID‑19 Impacts in the Construction Industry
This is the sixth post in an eight-part series that summarizes potential impacts of the COVID‑19 pandemic on the construction industry.
Applicability of Force Majeure and Delay Contract Clauses for COVID-19 Impacts in the Construction Industry
This is the fifth post in an eight-part series that summarizes potential impacts of the COVID‑19 pandemic on the construction industry.