As the coronavirus hits all over the world, various industries including the construction industry are being affected. Usually contractors in the construction industry are equipped to deal with the risks; doesn’t matter if it’s because of the shortage of labor or escalating prices. The COVID-19 outbreak is expected to bring several long-lasting and short-term negative consequences. These may include disruptions to work or cancelled projects; potentially less demand for “non-essential” projects like construction, entertainment, and sports facilities; reduced or missed payments and a slow economic rebound across many industries around the world.
The construction industry is massively affected by the Coronavirus. Brian Perlberg, senior counsel, construction law and contracts, discussed this outbreak as a “force majeure,” as it is an unforeseeable event that no party controls or is at fault. He suggests the contractors to take a look through the contract to find if it makes an adjustment for time or money. Every contract is different, and its components will show what is allowed and what is not.
Contractors all across the world look for construction materials from China. As China has gone forward with the quarantine, this has slowed down the process since many factories are shut down. This has resulted in a downfall in the construction industry. So all the construction companies which were dependent on Chinese materials are struggling.
All the school, colleges and universities all over the world have been closed to stop the virus from spreading. Social distancing and complete isolation is recommended in almost every country. Construction companies across the world are also considering how they will react to the outbreak with regards to maintaining their workforce.
AGC’s Chief Economist Ken Simonson delivered coronavirus survey results from the organization’s members, with a total of 909 responses as of March 19. Notable results include 28% of respondents being asked by an owner or government agency to stop current work; 11% were asked by an owner or government agency to stop future work; and 22% received a notice from suppliers that deliveries will be late or cancelled. Regarding project delays or disruptions, 16% experienced a shortage of materials, equipment, or parts; 11% saw a shortage of craft workers, including subcontractors; 18% saw shortage of government workers; and 8% received information that an infected worker has potentially infected a worksite.
These shutdowns and bans mean that companies will need to turn to teleworking and other technologies to keep business running smoothly while employees are at home. However, these might not apply when it comes to construction sites because they need a physical presence; so construction of buildings or infrastructural projects might face delays.
According to the experts, even though the COVID-19 was completely unpredictable, it is possible that the construction companies may still be contractually responsible for delays or cost overruns on current projects. There are many conditions that would still be relevant and up to discussions, which includes the a lot of contractual terms which involve the timeline of the projects, expected completion, delays, liquidated damages and a lot of other aspects.
It is suggested to find out the details of the contract, and especially looking at any point which lets the work to be ended under these unforeseeable circumstances. There is a possibility that there will be a few opportunistic claims, but the impacts of the Corona virus, particularly on the supply chain, are so broad that there has to be many valid claims.
There are some construction companies which are still currently working in Sydney. One of these companies is Sustainable Builders. Sustainable Builders are operating by taking all the precautionary steps and following all the community guidelines in the construction industry. Their services include:
For many years, they have been providing quality building, engineering and commercial office fit out services for homeowners and businesses throughout Sydney. They work on home renovation, a new home build and commercial office fit-outs. They have a team full of architects, builders and engineers.
To know more about Sustainable Builders, you can visit their company profile at:
P: 0413 202 634