Construction business leaders have been dealing with the impacts of COVID-19 for quite some time now. Plenty of articles identify the litany of issues, legal and practical, contractors face. But remember, the primary business of a construction industry firm relies on its people: employees, industry partners, owners and stakeholders. Without them, bids are not won, work stops, no projects are turned over and earnings evaporate. Here are suggestions from a legal perspective to improve business owners’ communications with their contractors and partners to collectively navigate this new, shared experience.

1. Be informed before communicating

Identify and thoroughly assess applicable government orders and guidance (federal, state and local) and how they apply to the company’s ongoing projects. For ongoing projects affected by the government orders, analyze all applicable contractual terms.

It will be important for the company to assess its entitlement to change orders or carrying costs from project owners to analyze its cash flow. In turn, it is critical for the company to understand its obligations to its trade partners under their subcontracts or purchase orders.

Other important clauses requiring attention include:

• termination and suspension;
• force majeure;
• notice requirements;
• the effect of refused extensions;
• liability limitations (limitations, exclusions, waiver of delay, waiver of consequential damages);
• escalation clauses;
• changes in law provisions;
• flow down provisions;
• emergencies; and
• safety requirements.

Assess the status of each project and how they may proceed if affected by government orders. Assess prospective projects and outstanding bids and how COVID-19 restrictions, delays, and increased safety protocols may affect pricing and duration for all participants and activities. In addition, know who will receive the message and anticipate their concerns, needs, and, if your employees, familial and financial dynamics.

2. Plan the messaging

A business leader needs their audience to relate to the message to obtain buy-in. Empathy will go a long way and is a powerful method to connect because everyone is confronted with the same COVID-19 related issues.

Deliver the message to all contractors, not a limited subset. Consider essential versus non-essential, parents and those without children, different ages, those who are single and people with limited social contacts, just to name a few.

Communicate regularly but keep company statements concise. People are on information overload right now and acting in a number of new roles. Multiple short statements are best suited to attract divided attention.

3. Be transparent and reassuring but follow contract notice requirements

If a contract requires notices for specific types of events or communications to be used, follow those contracts to not prejudice the company’s rights. Be honest and open with trade partners about whether and to the extent company projects can continue. Communicate the messages received from project owners and listen to concerns or ideas raised by company employees and trade partners.

Be open to discussions about compensation—if it is possible to keep the work flowing and pipeline of funds continuing through negotiations with project owners, do it. If outstanding bids now seem too low, work with trade partners to revise them. Competitors’ bids will have the same issues. Be the first to communicate with project owners and explain why revision is necessary and be authentic.

4. Empower collaboration, listen to feedback and then offer solutions

The new normal is a work in progress—offer solutions but have an open mind. Be receptive to employee and trade partner ideas on how to keep work flowing and how to mitigate delays and cost impacts.

Continue dialogues on safety protocols. People will continue to identify new challenges and develop new ideas for addressing them. Also, keep abreast of state and local guidance and orders on health and safety protocols for construction projects.

If projects cannot proceed full scale, assess whether the following type of work can go forward and the capabilities of your employees and trade partners:

• Remote work and work from home;
• Prefabrication;
• Design work for design-build trades or constructability and other input from design-assist trades;
• Remote estimating, scheduling, procurement and other administrative work; and
• Meetings and collaboration with online tools.

The matters facing construction business owners today are novel and ever-changing. Leaders must be attuned to government orders, the needs of their business and employees, their contractual obligations and entitlements, and the well-being of the industry as a whole. This is an opportunity for business owners to set a good example, be compassionate, innovate, and influence the way all players in the market behave in the face of this challenge and future adversity.