The coronavirus crisis is just beginning to affect the construction industry and should impact the industry for many months, if not longer.
To help navigate these treacherous times, we here at Critchfield, Critchfield & Johnston want to assist you by providing some helpful guidance on issues you may face.
First, as you are probably already aware, construction projects have been allowed to continue in the face of the Stay at Home Order issued by Governor DeWine on March 22, 2020. Even though work can proceed, contractors are still responsible for complying with the Social Distancing procedures in the Stay at Home Order, which includes, among other things, maintaining six-foot distancing from other individuals and washing hands with soap for a least twenty seconds. Critchfield’s client alert on the Stay at Home Order is HERE and the full text of the Order is HERE. See Section 15 of the Order for Social Distancing and other requirements.
Second, the impact to contractors may include delays in meeting the contract schedule, delays in acquiring materials, shortages of labor, demobilization and re-mobilization costs, etc. You should make sure you conduct a thorough review of your current contracts to ensure that you are well prepared to ride out the storm. In doing so, focus on provisions relating to delay, such as the force majeure clause, notice, and suspension rights. Also, see if your agreements allow for escalation on the cost of materials.
Once you are aware of the requirements of your agreements, you should consider whether you need to provide notification of any delays you are facing because of the virus. It is important to provide notice of any impact within the contractually prescribed time frame.
Finally, it is likely that the project owner or construction manager on a project will request you provide expected costs in case of a suspension. While you may not know the full impact of delays caused by the virus, you should provide all the information that you currently have along with a caveat that you will provide supplemental information when you are in possession of it.
How the Coronavirus will impact you depends a great deal on the contract you have for a particular project. The attorneys of Critchfield, Critchfield & Johnston stand ready to help you review your contract and provide you with assistance tailored to your specific needs. Please do not hesitate to contact us.