The construction industry is commonly known as a game of risk management. At any point, the variables can change. In a COVID-19 world, the risks are exacerbated, and a project slated to be completed on time and within budget can be thrown off track by an unexpected outbreak on the job site. Working in facilities such as schools, airports and office buildings, while occupied by the end-user and its staff, only heightens the cause for concern, exposes the contractor to third-party claims and may place the project’s timely completion in jeopardy. 

Best practices for managing these risks mandate that contractors maintain an updated job hazard assessment plan to address the safety of the end-user, labor crews, subcontractors and suppliers, as well as a contract management plan to ensure the project can be completed within budget and without extended delay. 

Job Hazard Assessment Plan

The contractor’s job hazard assessment plan should start with identification of the risks of exposure. If the job requires work in confined spaces, limited social distancing or stacked trades working side by side, the hazard assessment plan should identify the safety measures in place to reduce the risk of exposure to construction crews and the end-user. Avoiding close contact with people who may have been exposed by practicing social distancing is recommended by OSHA and the CDC. Yet this can present challenges on the jobsite where only limited work areas have been released to the contractor for construction, or when the end-user occupies all or part of the facility during construction. 

If non-essential activities can be delayed or phased so that social distancing can be maintained, this best practice should be factored into the contractor’s schedule. The hazard assessment plan should also establish job site protocols for worker safety including on-site record keeping of any workers with COVID-19 related symptoms, temperature checks, increased use of air filtration systems, sanitation protocols for shared tools and equipment, as well as sanitation stations for worker’s use on site. The job hazard assessment plan should also address the proper use, limitations, handling, decontamination, removal and disposal of personal protective equipment for protection from both COVID-19 exposure and hazards inherent in the construction activity. Finally, the safety plan should be a standard contract document that is strictly enforced and utilized by contractors at each tier.

Contract Management Plan

The threat of COVID-19 also requires consideration of the strength and depth of the subcontractor’s crew and whether the subcontractor has a continuity plan to address a widespread COVID-19 outbreak while keeping the job on schedule. A working plan to manage the contract of construction can aid in mitigating risks. While a well-written force majeure clause may protect the contractor if performance is frustrated by COVID-19, the risk of claims for delay by other trades and suppliers is still ever present and can stymie the contractor’s ability to make a profit. 

To mitigate the risk of performance delays, the contractor should take additional precautions to protect the project’s financial risks. Contractors should make a habit of requiring bid, performance, payment and warranty bonds on their projects to reduce financial risks of non-performance and confirm confidence in the subcontractor’s ability to perform. The contractor should also require a work crew continuity plan that establishes a pipeline of skilled labor to substitute or replace workers who may become ill or forced to quarantine. Similarly, the contractor should establish a contingency plan for supply and material delivery that includes alternate sources of materials, pre-negotiated delivery schedule and pricing, and favorable payment terms that incentivize the supplier to prioritize the contractor’s deliverables.

As flu season approaches and contractors prepare for the heightened threat of COVID-19 on construction activities, best practices mandate establishing and implementing a job hazard assessment plan that identifies the risks presented by COVID-19 and the measures to mitigate those risks. Contractors should also enter into subcontract and purchase agreements with heightened scrutiny and an eye toward maintaining a pool of healthy, skilled laborers to ensure that the project is completed on time and within budget.