As the construction industry is still dealing with how to continue work without spreading the coronavirus, we need to be thoughtful about the current and potential effects on our business as we’re moving forward. Most of us saw delays or disruptions in project progress and deadlines, especially at the beginning when different states had different requirements and allowances for onsite working. A survey done in June this year by The Associated General Contractors of America showed that two-thirds of construction company owners had to delay or halt a project due to circumstances caused from effects of covid-19. This includes a shortage of protective gear or other equipment, state mandates to halt ‘non-essential’ work, and reduced demand. Even as we are recovering and have access and knowledge to more protective gear, things are still changing daily, and could turn for the worse again until we have a vaccine. In the meantime, here are some precautions to consider as you’re bidding for new projects:
As we all know, good communication is so important. When delays or issues come up, make sure you discuss it with key personnel and clients. Set and follow a clear process to communicate these changes to the right people. This builds trust and understanding, helping everyone to feel a part of the solution. Even if you think it’s not worth bringing up, you might be surprised how the smallest little issue can create a big impact on the overall project. Make key players aware, so that everything can be resolved quickly.
Include Contract Provisions
Many construction companies are adding a “force majeure”, or “act of God” clause in their contracts – which is basically a provision in the contract that addresses what happens when there are circumstances outside each party’s control to make the project deliverables impossible, illegal, impractical, or similar. It essentially allows for termination or suspension of the contract due to unexpected and unavoidable events that are out of the contracting parties’ control – including things like floods, earthquakes, hurricanes, tornadoes, landslides, and wildfires. If you decide to add such a clause due to unexpected Covid complications, we suggest you review and communicate clearly with your client the reasons and thoughts behind it so that everyone is on the same page.
Consider Price Acceleration
This is another provision that you may want to add into your contract in case the actual cost of labor and materials increases. This usually requires you to provide your client with proof that the cost of materials went up and contact them with the documentation that shows the need for a price increase, if and when that happens. These clauses can possibly allow an escape of the contract if the materials have become difficult to find – which is often frowned upon because most clients want a more secure contract that isn’t taken advantage of. With Covid, however, there is a legitimate potential that this could occur! But if you do include it, review the details with your client, of course, so that they are aware of the intent and range of possibilities. If you’re providing a bid without a fully guaranteed quote, just make sure you communicate that the prices included are estimates, not quotes
Find Backup Resources
It is always a good idea to make sure you don’t bid on a project unless you’re sure you have enough resources to deliver on it – including labor, equipment, and materials. However, it may be difficult right now to really depend upon anything – nothing is a sure thing! Consider what would happen if you lost some of your staff or material vendor because of Covid and look at options to replace them. If you need to to hire new people – don’t forget that Madden Industrial Craftsmen might be able to help you with that too!
Project interruption and change is even more likely than ever – so keep a close eye on your building projects! Plan as much as possible in order to minimize confusion and overtime as we’re continuing to adapt to new circumstances. If you need any help finding labor for your next bid, Contact your local Madden Industrial Craftsmen, we have access to the best of the best talent ! We’ll match workers that have the experience and training you need for the job openings you have.