{"id":897254,"date":"2020-03-26T15:24:09","date_gmt":"2020-03-26T21:24:09","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=897254"},"modified":"2020-03-26T15:24:11","modified_gmt":"2020-03-26T21:24:11","slug":"prepared-proactive-owner-mitigate-effects-coronavirus-construction-project","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/prepared-proactive-owner-mitigate-effects-coronavirus-construction-project\/","title":{"rendered":"Disrupting the Disruptor: How a Prepared and Proactive Owner Can Mitigate the Effects of Coronavirus on Construction Projects"},"content":{"rendered":"\n

Scott A. Greer, John H. Fontham and Kaleb Walker | King & Spalding<\/a><\/p>\n\n\n\n

Once a remote health issue in China, the rapidly spreading coronavirus (COVID-19) has become not only a global health concern but also potentially a global economic disruptor that could impact nearly every industry. The construction industry is no exception, and owners and contractors alike should evaluate and take proactive measures with respect to the physical and economic risks that coronavirus could pose for their projects. For owners and contractors, the virus presents significant risks to critical aspects of the project, including the health of project personnel, potential supply chain disruptions, and the increased potential of cost impacts and schedule delays, regardless of the contractual responsibility for infectious diseases. However, prepared and proactive owners and contractors can, with some forethought and groundwork, take simple yet effective measures to mitigate\u2014or even prevent\u2014these potential health, cost, and schedule risks.<\/p>\n\n\n\n

Take Care of the Owner Team<\/strong><\/p>\n\n\n\n

A critical step for any owner is to take care of its personnel on the project, ensuring that such personnel are safe and able to successfully execute their roles on the project. This includes setting up the proper procedural infrastructure to minimize the risk of infection and to keep all personnel healthy and working\u2014no matter the work site.<\/p>\n\n\n\n

Developing and implementing a basic, multi-faceted COVID\u201119 risk management plan is a good starting point. One aspect of the plan should be to manage the travel of the owner\u2019s personnel to reduce the risk of infection. As an initial step, an owner might set up (and continually update) a list of countries to and from which its personnel should consider not traveling without company approval, or if travel is necessary, establish conditions and precautions under which such travel is taken. An owner should also consider eliminating all non\u2011essential travel. If someone has already traveled to a restricted country without necessary precautions (whether for business or personal reasons) or otherwise becomes infected, a next step would be to evaluate the impact that this travel might have on such person, including potentially implementing a mandatory quarantine period for such persons.<\/p>\n\n\n\n

An owner\u2019s risk plan should also identify preventative steps and proactively identify potential cases of coronavirus. For example, owner personnel should be aware of the list of COVID\u201119 symptoms (e.g., posting COVID\u201119 signage in offices and other work sites)[1]<\/sup><\/a>, and all personnel should be required to immediately report any such symptoms. Owners should also consider encouraging personnel experiencing symptoms of illness to stay home or otherwise refrain from reporting to the workplace, including providing paid sick time under appropriate circumstances.<\/p>\n\n\n\n

In addition to health mitigation techniques, an owner should also plan in advance for potential economic disruptions. This includes making necessary preparations so that owner personnel can work remotely in the event that such personnel exhibit COVID\u201119 symptoms as well as establishing protocols to temporarily close non\u2011essential offices. Such preparations might include providing laptops to additional employees to increase remote work capabilities, installing necessary programs and software on all work laptop computers (e.g., CAD software or Primavera scheduling software), setting up filesharing sites, implementing WebEx or other tele\u2011meeting capabilities, and permitting personnel to log into the owner\u2019s systems by remote access VPN. With such measures in place, infected or quarantined personnel may continue progressing the project remotely, even during a quarantine scenario.<\/p>\n\n\n\n

Have the Contractor Manage Potential Impacts<\/strong><\/p>\n\n\n\n

A central piece of an owner\u2019s coronavirus mitigation strategy should be to have the contractor take proactive steps to prevent and manage potential impacts on the project. This means reviewing the engineering, procurement and construction agreement (\u201cEPC\u201d) or construction agreement to identify provisions requiring the contractor or supplier to mitigate impacts related to the coronavirus, assessing whether contractor has established adequate mitigation measures, and notifying contractor of any additional steps it should be taking. An owner should consider taking these steps regardless of the party who bears the responsibility for impacts that may be caused by coronavirus. A good starting point would be for an owner to consider how certain contractual issues\u2014such as equipment and material procurement, HSSE practices, and notice and mitigation requirements\u2014may apply to potential coronavirus impacts.<\/p>\n\n\n\n

Supply of Equipment and Materials<\/p>\n\n\n\n

Under the EPC or construction contract, the contractor will generally be responsible for supplying equipment and materials necessary for the project. Disruption of global supply chains due to coronavirus, however, may cause delays to the supply of equipment and materials procured from certain source countries and may impede contractor\u2019s (or its subcontractors\u2019, suppliers\u2019, or vendors\u2019) ability to timely supply such equipment and materials. To prevent supply issues, an owner should consider contacting the contractor to make sure that it has an alternative sourcing plan (including a list of back-up sourcing options) to procure the same or sufficiently similar equipment and materials from sources acceptable to the owner.<\/p>\n\n\n\n

Health, Safety, Security, and Environmental (HSSE) Measures<\/p>\n\n\n\n

Another key step is to ensure that the contractor is performing the work in accordance with its HSSE policies, the owner\u2019s HSSE policies, or both (as applicable). For an owner, this means dusting off the contractor\u2019s HSSE plan (or, if not provided as part of the contract, requesting such a plan from the contractor), identifying those HSSE provisions applicable to the health and safety of all personnel and safety at the project site (and other locations work is performed), and ensuring that contractor has mechanisms in place to comply with such HSSE provisions.<\/p>\n\n\n\n

Most HSSE plans require the contractor to establish HSSE measures that are specific to the project and the site. Accordingly, an owner should seek to have the contractor establish site\u2011specific best practices to prevent the spread of coronavirus to the project. Such practices, may include, for example[2]<\/sup><\/a>:<\/p>\n\n\n\n