It’s safe to say the possibility of a pandemic was not on the construction industry’s metaphorical radar when it hit; but what we have learned in recent months will both help press forward in dealing with COVID-19 and better prepare us for the next public health emergency. Many construction businesses have partially re-opened since the governmental shutdowns caused by the initial wave of the coronavirus pandemic. The current situation, however, has brought with it some restrictions and related challenges that have required innovative approaches to remain efficient and maintain already low profit margins. As newly confirmed coronavirus cases begin to rise across the country again and predictions of a second pending wave become closer to reality, it’s a good time to assess the effectiveness of current operational plans and plan for the next showdown.

Lessons Learned

While the degree was jurisdictionally dependent, all companies were restricted in some capacity due to governmental order. As we better understand the virus and how it works, large scale shut-downs become less likely. Construction companies will need effective plans to work with social distancing, telework, and extensive sanitization efforts moving forward though. We also saw significant disruption to supply chains, slower on-site production levels due to reductions in force relating to fallout from the pandemic, and cash flow shortages induced by the pandemic.  Legally, construction contracts and insurance policies lacked remedies to deal with the novel problems COVID-19 created; and many businesses did not have the necessary personal protective equipment or relevant policies and procedures to handle the crisis.

Contract Clauses