The impact that the coronavirus has had on the construction industry is significant. Legally, implications are different based on the country and the contract. When it comes to contracts, the wording used on standard forms is being evaluated closely. NEC and FIDIC are examples of this. More issues are cropping up as the pandemic continues.
At this current time, the pandemic has not made it impossible to finish projects. However, it has caused a number of disruptions and delays. This slowdown has largely occurred because of issues with supply chains. There are a number of projects that have been brought to a halt, though work is typically rescheduled to resume at a future date.
In some countries, non-essential businesses have been ordered to cease operations. With that said, the majority of shutdowns do not impact the construction industry and smaller construction and scaffolding companies like APL Kwikform.
There are a number of reasons for this, such as:
* It’s essential that infrastructure and construction projects continue if feasible
* The threat the coronavirus poses varies from one project to the next As an example, if a project is outdoors, and if the workers are able to socially distance, it may be easier to comply with health and safety restrictions than it would be for projects in enclosed environments. Wherever work is happening, it’s important for assessments to be conducted to ensure the health and safety of all workers. Government and medical guidelines must be followed so that a safe environment can be provided.
It’s important to keep in mind that this situation has been changing as time goes on. Some countries have increased restrictions and are now requiring that every non-essential business ceases operations. In many cases, construction projects would fall under this umbrella. In some nations, there are even orders demanding that construction sites shut down or that contractors cease work until the period of emergency ends. This is particularly likely to be the case for public works projects.
Contracts typically include provisions to cover events that could not have been predicted. This means that events like the coronavirus may be covered under many contracts. Typically, there are two different categories that these provisions fall under.
One category is “force majeure,” which describes events outside an impacted party’s control that could not have been predicted at the time the contract was signed. In order for this to apply, there cannot be a way to get around or prevent the events, and the events must keep a party from performing obligations specified in the contract. In the case of many contracts, coronavirus would qualify as a force majeure event. Many contracts, such as FIDIC forms, state that force majeure events do not result in compensation caused by delays unless otherwise agreed upon. However, contractors are entitled to contract extensions to make up for delays the events caused. However, the specific wording in the clause or clauses is crucial.
In most cases, force majeure will only excuse a contractor for not providing applications that cannot be performed because of the event. This can create confusion when some activities, such as project design, can go on, while others, like construction, are delayed. Force majeure requires that the issues caused by the event can’t be overcome, which can also be an issue for contractors. In some cases, a contractor may be able to take steps that will allow a project to continue, even if the rate is slow. There are employers that won’t accept COVID-19 as a force majeure event because of this.
Both engineering and construction projects have felt the impact of government regulations, laws, and directives that were designed to slow the spread of COVID-19. For example, there are movement restrictions as well as restrictions on the movement of goods between nations. In some countries, there are lockdown orders. This may have a more significant impact on construction projects than COVID-19 has.