Construction Projects in the (Not Quite Yet) Post-Pandemic World
The beginning of 2021 should have marked the dawn of a new era. As the clocks turned past midnight, there was a collective sigh of relief from the world. 2020 was over and life would begin to return to normal. Sadly, the beginning of 2021 looks set to provide more of the same.
Whilst the office environment has had to adapt to remote working, the construction sector has faced much more difficult challenges. Construction projects rely on timely performance and good planning. The pandemic has challenged both of these key norms, and the ripple effect of these challenges is starting to emerge.
Social distancing has changed the way the site can operate
The UK Government recently released the November 2020 edition of its guidance publication “Working safely during COVID-19 in construction and other outdoor work”.1 The first three pages of this document are dedicated to listing its updates throughout 2020. This alone highlights the remarkable evolution that working measures in the construction industry have undergone during the pandemic just to continue to function.
Social distancing brings a variety of safety and other challenges to the worksite. Taking a few examples:
- Worksite start and finish times may need to be staggered to minimise contact between the labour force and to ensure overall worksite numbers are managed. Amongst other things, this brings with it a complex coordination risk that goes far beyond simply coordinating the ‘day’ and ‘night’ shifts as there will be more handover points throughout a working day. However, approaches such as ‘cohorting’ staff may help to mitigate coordination impacts, but these come with their own set of difficulties;
- New considerations need to be given to access and egress points, as well as ‘one way’ systems of moving around the worksite. Access and worker movement restrictions directly impact the ability to plan and execute the work efficiently and will, on many levels, impact productivity rates;
- Additional facilities and provisions will be required, such as hand sanitization stations, additional PPE and physical barriers, or may require modification to account for social distancing, such as break rooms, rest rooms, changing facilities, waste disposal facilities, etc. These requirements present another timing and coordination issue on top of costs and space concerns;
- COVID cleaning regimes present an obvious impact, particularly for shared tools and equipment;
- The types and/or number of people at the worksite may need to be restricted or modified (visitors, for example). This presents the most significant impact on productivity and progress and may result in staff less critical to physical performance being required to adopt remote working procedures. Having reduced site staff may also result in reduced direct supervision, which could in turn lead to errors in execution;
- Whilst remote working will have varying benefits and challenges, the simple fact of not being on site means that many impromptu conversations (and observations) will not occur. The lack of physical presence will heighten the need for more effective communication and reporting procedures; and
- Supply chains will all be affected in similar ways (albeit to varying degrees), adding yet further complexity to the difficulties in coordinating site activities. This will affect not only the availability of materials, but also presents a huge headache for those trying to coordinate deliveries to the worksite to fit with an already disrupted programme.
Project durations and productivity will be impacted because of the pandemic
One inevitable consequence of social distancing measures is on resources. Simply put, either the time required to complete a project will become longer if resources cannot be increased, or additional resources will be needed. In all likelihood, both will apply. With reduced numbers of worksite personnel, and the imposition of restrictions on access, egress, movement and start and finish times, efficiency will suffer. As any contractor will tell you, more time on the job means exposure to additional costs. The ultimate impacts of the pandemic will vary according to the nature of the parties’ contracting arrangements, but there is no doubt that cost consequences will be felt by contractors in circumstances where they cannot meet their ordinary levels of efficiency on a worksite — with all the resultant difficulties that brings to bear for the employer.
One further impact for parties is the increased difficulty to accelerate the works through the deployment of additional labour. To create an effective acceleration, a careful analysis will be required to assess and balance whether acceleration through re-deployed labour (as opposed to increased), will truly achieve acceleration to the programme. In the short term, this seems a rather difficult route to pursue.
Other risks may also materialise. For example, projects that may have only been exposed to one ‘wet’ or ‘winter’ season could now be exposed to two. This exposure will bring about additional performance challenges. The natural consequence is the potential for other associated increases in costs aside from those directly related to labour, such as insurance premiums and other overheads.
Against this backdrop, it would be remiss to ignore the potential opportunities associated with having fewer people on a worksite. One such notable opportunity is the development of modularisation and other measures to improve offsite fabrication to make the worksite construction performance quicker, simpler and more efficient taking account of lower labour levels. Of course it is very likely that these new opportunities, whilst now present in places, will take some time to develop before they start to become industry norms and begin to improve rates of progress and productivity.
Disputes have multiplied
One hallmark of tough times is the ability of people to naturally ‘pull together’. During the early days of the pandemic, a client remarked that in his career, he had never seen such positive and collaborative behaviour from the contracting workforce. Unfortunately, this aspect of human nature is not infinitely enduring, and fatigue appears to have set in. A few months later, that same client complained that he was now dealing with ‘hundreds’ of force majeure and other claims. Equally, other projects around the globe are being continually impacted by such circumstances. This change in sentiment, whilst not unexpected, seems to be becoming a more pervasive theme of the construction sector, and claims appear to be on the rise.
Proactive management and effective communication are essential characteristics of good dispute avoidance measures. When in a remote working environment, additional measures will need to be taken to ensure that these objectives are maintained. Furthermore, thorough record keeping is essential to dispute management. Where contractors are required to reduce site staff numbers, a careful balance must be struck to ensure productivity is maintained as well as not sacrificing effective project management and supervision.
The changes to worksite operations are no longer considered new and are fast becoming an engrained way of operating. Employers naturally expect that contractors will plan their operations to take account of the pandemic conditions. Excuses regarding performance are, therefore, being carefully scrutinized.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.