Things to be doing during lockdown; how to prepare to re-open

2/5/20
Social Distancing

As the UK heads towards ‘Lockdown’ being lifted, at least in part, as previously advised, we are confident that irrespective of the goodwill generated by ‘all being in it together’ and the unprecedented circumstances of Coronavirus and its impact on UK (and worldwide) construction, once the restrictions are lifted, the industry will be tempted to revert to type.

Project programmes, the commercial position, payments and all the usual contractual consequences will surface as sources of conflict, dispute and claim.

The natural focus will be on re-starting, catching up as much as possible and getting the project over the line. This is, of course, the priority, but in the heat of battle, it will be easy for all parties to overlook getting things in order as to what the position was, when the site closed (partially or fully), or what the status of the job is now, as it is reanimated.

What is certain: projects will be later than expected, and costs will have risen – extended prelims, inefficiencies in labour and staff under ‘Social Distancing’, longer lead times on materials, changes of scope and content caused by supply chain issues, additional security and temporary works arising from closing sites, will all be contentious and sources of disagreement and misunderstanding.

So, what can the various parties involved be doing to mitigate and minimise these impacts?

  • Sort the documentation, paperwork and records: invest the time in tidying up and preparing for use of audit trails – RFIs, CVIs, EAIs, have they all been record, noted, responded to and acted upon? Have the consequences and associated costs and effect on programme been communicated?
  • Initiate discussion and negotiation about the who, the what and the when’s as to responsibility and what the commercial effect and outcome(s) will be, and identify, define, and record the key elements and mission critical items at least
  • Agree where is to be the ‘field of play’: What provisions in the contract and amendments will apply? Table these and agree where the disparities lie
  • What, if any, does Force Majeure mean in this specific situation?
  • Consult professional, impartial commercial advisors (we know a great one!) and legal counsel – develop strategies to reflect the scale and likely culpability of the ‘inevitable’ bad news regarding final account and date of PC, and any change of scope against the original contractual ERs
  • Prepare an interim ‘status report’ of the project: share a new, honest, programme with adjusted milestones. Highlight critical issues which can or can’t be addressed to mitigate the impact of lost time

As before, we anticipate a new set of rules and conventions in the era of the ‘New Normal’, which it is hoped will start a new dawn in construction. However, experience tells us, that in our conservative industry, it has always been the case – each will see it as someone else’s fault and someone else’s responsibility to pay. And the recent crisis will fade and by the time most contracts are completed, it will be a distant memory overtaken by the fact that, as far as the client is concerned, as is still too often the case, the job is late, over budget and not what was expected.