Your Project Has Been Shut Down by COVID-19. Now What?
If you project does not fall under the most revised list of essential workplaces as per Ontario’s Chief Medical Officer of Health, most revised updated the list of essential businesses that can remain open then your site has likely been closed. Whether you are a Property Owner with a property under construction, Developer, General Contractor, Construction Manager, Subcontractor, Vendor or Supplier there may be numerous contractual implications and or repercussions which must be considered as a result of the stay in place shutdown.
After over 50+ years in the construction industry, the founders of The GeoFocus Group have lived through some of Canada’s toughest times.
“The C.D. Howe Institute’s Business Cycle Council created a classification system for recessions, grouping them together by category. According to the council: “Category 1 recessions have only a short, mild drop in GDP and no decline in quarterly employment. At the other extreme, Category 5 recessions involve extremely rapid contractions of the economy over an extended period of time.” In 2012, the Council argued that the only Category 5 recessions to date occurred during the Great Depression and that the last three recessions (2008–09, 1990–92, 1981–82) were the most severe since the mid-1950s. Each was classified as Category 4.
Canadian Recessions Since 1929
|Monthly Peak||Monthly Trough||Category 1 to 5|
|October 2008||May 2009||4|
|March 1990||April 1992||4|
|June 1981||October 1982||4|
|January 1980||June 1980||1|
|December 1974||March 1975||2|
|March 1960||March 1961||3|
|March 1957||January 1958||3|
|July 1953||July 1954||4|
|April 1951||December 1951||3|
|August 1947||March 1948||2|
|November 1937||June 1938||5|
|April 1929||February 1933||5|
Source: C.D. Howe Institute Business Cycle Council.”
The GeoFocus Group’s founders have endured some of Canada’s harshest economic climates which has given the Group a unique insight into how to protect the interests of project participants and stake holders. This unique insight is providing to be a very valuable asset and beneficial to a number of our Clients during this current economic upheaval.
In this column we will focus on the STOPPED PROJECT from an Owner/Developer perspective. After receiving notice of a government mandated work stoppage / closure – what are the next steps?
- If you are not familiar with the contract that you have utilized to deliver the project – become familiar with it.
- You must consider the economic consequences from the shut down including but not limited to:
- Increased insurance costs.
- Demobilization costs.
- Increased site safety costs.
- Increased site security costs.
- Increased site sanitization costs.
- Re-mobilization costs.
- Acceleration costs.
- Additional and increased carrying costs.
- Increased professional fees.
- Increased material costs.
- Decreased productivity on restart.
- Materials and manpower shortages on restart.
- We strongly recommend considering employing an expert construction Advisor that has the ability and resources to assist you to navigate through these troubling times. The GeoFocus Group’s expert construction advisors can assist you to:
- Document the closure/work stoppage.
- Maintain photo-documentation of site during the closure/work stoppage.
- Assist you to communicate with your legal advisors, cost monitors, lenders and consultants.
- Assist you to communicate with your Design-Builder, General Contractor, Subcontractors, Vendors and/or Suppliers.
- Assist you to address insurance, safety and security issues.
- Assist you to mitigate site risks and commercial exposure during the closure/work stoppage.
- Assist you to prepare for arbitration, mediation and or litigation.
- Assist you to maintain and prepare records as well a Change Order / Change Directive management to mitigate the potential for project cost increases.
- Assist you to prepare a recovery plan to accelerate construction as efficiently as possible when work is permissible.
- Assist you with dispute resolution / alternative dispute resolution during the work stoppage / closure.
- We strongly recommend considering employing the services of an expert Owner’s Representative. Now more than ever an Owner’s Representative can assist you to assess and strengthen your contractual position. The GeoFocus Group’s Owner Representation services include:
- Review Application for Payments / Certificates of Payment issued to date to mitigate over certification.
- Assist with budget and cost controls.
- Assist with code compliance analysis.
- Assist with project phasing analysis.
- Assist with construction schedule development and ans analysis.
- Assist with contracts administration.
- Assist with project close-out.
- Assist with contract negotiations.
- Assist with contracts management.
- Assist with contracts clouse-out.
The GeoFocus Group’s professionals work side-by-side with Developer’s and Owners. Depending on the circumstances, our roles vary. In the construction industry, there is no predicting what challenges might be thrown your way. COVID-19 is new; however, construction projects fraught with delay and disruption is not atypical. Developer’s and Owner’s often run into inexperienced site teams assembled by their general contractor which sets the project on a course for delayed completion dates and budget overruns and inexperienced project design teams assembled by inexperienced Owner’s Representatives. Inexperience on construction projects often leads to contractual disputes and contractual disputes (without appropriate intervention) often lead litigation.
In the event your project was in a state of disarray and dysfunction prior to the COVID-19 work stoppage/closure please contact us today. The GeoFocus Group’s litigation support team can assist you to mitigate further damage / delay which will inevitably be caused by this pandemic. Services include:
- Discovery Support
- Scott Schedule Preparation
- Quantification of Damages
- Schedule Delays & Disruptions
- Standards of Care
- Productivity Impacts
- Construction Defect Analysis
- Construction Litigation Support
- Construction Arbitration Support
- Construction Mediation Support
- Consulting Experts
- Testifying Experts
- Expert Witness and Opinion Services
- International Construction Experts
- Differing / Unforeseen Site Condition Analysis
- Claims Management Strategy
- Cliams Management Services
- Legal Team Coordination
The GeoFocus Group understands that any complication faced during the construction process can be frustrating. We understand the difficulties that Owner’s and Developers will face during the COVID-19 pandemic and understand the support they will need. We emphasize the “support,” offering one-on-one consultations to ensure all your questions are answered so you can continue your work with confidence and peace of mind.
To discover how The GeoFocus Group assist you with the work stoppage/closure at your site please connect with us today to schedule a VIRTUAL meeting with one of our construction experts:
Founder and Strategic Advisor
T. 416.622.0456 X 333
T. 416.622.0456 X 222
- 29 – 111 Zenway Boulevard, Vaughan, Ontario, Canada
- (416) 622-0456
- (416) 622-6396
- Mon – Fri: 9:00 a.m. – 5:00 p.m.