The spread of the Coronavirus has begun to have a debilitating effect on world markets and the workforce in general. It's only a matter of time before it will directly affect US construction projects. There are steps that people in the US construction industry can do to prepare for its effects and to protect themselves and their projects.
1. Check out the construction contract
Find the force majeure clause and see if an epidemic or pandemic is included in its definition. Look for words such as "an act, event, or occurence caused by acts of God, explosion, public enemy, civil disturbance, unusual and adverse weather, or other similar act, event or occurence that is beyond the reasonable expectation or control of the parties". Some federal contracts will even have terms such as "epidemics" and "quarantine." If its not written into the contract, it could be in the Federal Acquisition Regulations which govern the contract and could possibly excuse non-performance.
As the coronavirus spreads, it may be necessary to negotiate favorable terms of a suspension of work with the responsible parties that have jurisdiction over the project.
Even if you can get a suspension of 30 days, this can be valuable time to see how this infection is spreading in your project's location and to come up with a corresponding plan for how to proceed with the work. While the project is suspended, use that time to come up with a health screening plan and develop better sanitary and infection control procedures.
2. Call your insurance broker
See if you have insurance coverage for an interruption to your business and projects due to the coronavirus. You may need to add to such a policy to cover cancellation for "any reason". Now is the time to get advice from a professional insurance counselor to review coverage already in place and additional policies that are available to you.
3. Talk to the Lender
Lenders like to work through issues as they arise to find solutions that will protect their loans and prevent their borrowers from defaulting on the loan. Work with your lender to determine a course of action which will benefit both of you.
4. Adopt a job site safety plan
Work on a good sanitation and infection control plan on the jobsite. The following steps should be taken to protect your workers:
- Provide hand washing stations
- Screen workers entering the work site for fever or illness
- If soap and running water are not immediately available, provide alcohol based hand rubs containing at least 60% alcohol
- Encourage workers to stay home if they are sick
- Encourage workers to cover coughs and sneezes
- Provide tissues and trash receptacles
- Maintain regular cleaning and disinfecting of surfaces and equipment
This could make the difference between being able to keep your team working or possibly shutting down.
Posted by Judy Lamelza