The world has been dramatically affected by COVID19, and so too have our construction projects. Although this scale and breadth of disruption hasn’t been felt in generations, resolving schedule delays to and mitigating impacts on construction projects isn’t new. Getting our construction projects going again will be an essential element for driving economic recovery. Let’s review what you will need to do to get back to work and back on track.
1 | Stop and Status
In order to have a clear basis for understanding the time impacts of the pandemic and the remaining work to complete the project, you must know the project’s status before the event happened. Using the last approved schedule, create an as-built schedule that captures the status of all activities right before the impact and each day during the impact period. Specifically, it is essential to know which activities
- Are complete,
- Have started and their estimated completion percentage,
- Have not started, and
- Have float remaining.
In some cases, your updated schedule may contain impacts prior to COVID19 shutdown such as slowdown in production due to COVID19 social distancing.
2 | Identify and Isolate
With a clear understanding of what was done and what’s left to do, the next step is to identify the completed and partially completed activities affected by the pandemic. The types of impacts experienced may include:
- Directed suspension of work, by project or by trade
- A general slowdown of work, or by trade
- Lack of materials
- Lack of craftsmen or subcontractors
- Reduced productivity due to screening or distancing requirements
- Lack of project and/or professional support staff
- Lack of inspection and testing services
- Lack of outside agency support (permits, utilities)
- Lack of funding or payment
- Lack of direction or approvals from Owner on RFIs, submittals, and plans
In most cases, these types of issues will fall under the category of Force Majeure, as the pandemic and resulting disruptions are outside both the Owner’s and Contractor’s control, an unforeseen condition at the time the project was awarded.
Once the affected activities have been identified, you must isolate the effects on these activities. This task should include:
- Creating a non-working calendar and/or productivity-based calendars for the impact period.
- Splitting partially complete activities into completed and remaining tasks.
- Developing an Impact Register that logs the specific impacts to activities.
- Segregating previously unresolved cost and schedule issues from COVID19 related issues, which should be resolved separately.
3 | Re-Plan and Recover
In order to begin thinking about the future, we must first acknowledge that, like the post-COVID19 world, the post-COVID19 project will be completely different. Across the industry, the impacts to large projects will require us to re-plan and re-schedule the remaining work. Therefore, the contractor should prepare a re-baselined schedule that estimates how long it will take to complete the remaining work. Things that need to be considered in the re-baseline:
- Re-mobilization – what does this involve and how fast could this happen?
- Re-work – by abandoning work in the field, do some areas need to be redone?
- Production rates – after COVID19, production rates will likely differ from both the achieved rates before the pandemic and assumed rates in previous schedules for the remaining work. These new rates need to be re-estimated, discussed, and negotiated.
- Material availability and procurement
- Enhanced safety and health guidelines – to ensure healthy work conditions and practices
When re-baselining, create new activities for remaining work, new calendars to align with new expectations for production rates and work schedules, trade-specific calendars if production rates are expected to vary by trade, and new cost codes for impacted accounts.
If the re-baseline indicates an overall project delay, the Owner should consider whether to recover the original project completion date is desired, or if a revised completion date needs to be established. Work collaboratively to determine possible acceleration paths and to estimate the costs for acceleration options.
4 | Understand Uncertainty
Performing the remaining project work in the post-COVID19 economy will beget new risks. All parties must acknowledge the inherent uncertainty in any re-baselined schedule. As noted above, the new schedule will consider several uncertain variables (production rates, material availability, etc.) The best way to proactively manage these uncertainties is through the traditional risk management process: identify these risks, log them in a risk matrix, develop mitigation or avoidance strategies, and update the risks as conditions change.
Items to consider in a risk matrix:
- Production rates – as mentioned previously, estimated production rates that drive schedule durations may be difficult to predict and vary widely from industry and company norms.
- Material Delivery – vendors and suppliers may have halted production and/or may have slow or unpredictable ramp-up periods.
- New Interruptions – additional government-imposed stay-at-home orders or other restrictions may interrupt construction progress. Like aftershocks from earthquakes, knowing these are likely and possible, mitigation strategies should be developed.
- Other project-related potential impacts – each project has a unique set of risks that may be affected by a domino effect of impacts across the supporting industries and stakeholders.
With a new list of risks and their potential impacts, the Owner and Contractor should work collaboratively to estimate the amount of float (shared or otherwise) to manage the new risks.
5 | Notices and Negotiations
The unique circumstances of our projects and the new challenges the pandemic has created further require clear and open communication between the contractor and owner. Notwithstanding, it is imperative for all parties to follow, as closely as reasonable, all notification and documentation requirements in the contract. Adhering to these requirements ensures that communication about critical issues is formalized and documented.
When it’s time to negotiate cost and schedule impacts, segregate the COVID19 issues from previous, unresolved issues. These may be resolved together, but each individual impact needs to be identified for negotiation.
It’s important to note this isn’t the time to be confrontational with the contractor/owner; this is a time to work together. We’ve all been impacted; it’s a time to work together to help creatively solve how our projects will move forward in the post-COVID19 world.
