Owners & Developer

Control Risk Throughout Construction Shutdowns

With U.S. citizens and workers’ safety the top priority, shelter-in-place orders and the definition of “essential” activity are putting some construction projects at risk. It is increasingly becoming the decision of governments rather than the industry leaders to discontinue construction. Projects will eventually resume, but in the meantime here are few critical items to consider while shutdown orders are enforced.

Site Security

It’s likely the pattern seen in New York City and Boston will replicate in other cities across the country. Even if a construction project is considered non-essential and is shut down for a period of time with no movement or advancement, keeping that site airtight and secure is paramount. CCTV cameras and access control systems are instrumental in this situation. Mounted at relevant points on the site itself or on neighboring buildings, these fixed cams can stream and record footage of the project to meet those objectives.

When working virtually, having construction site surveillance is crucial for peace of mind. Companies such as OxBlue offer cameras for purchase and the software to view the images and live streams. Deploying these cameras will ensure the site is secure and materials remain in place while the site is temporarily shut down.

Potential Disputes

Industry leaders will be confronted with several challenges during and after these site shutdowns and the last thing they want to be grappling with are disputes. To avoid any potential future disputes, claims, and legal action, all status of design, engineering, permitting and construction should be updated and documented before demobilizing. Create a single source of truth before the shutdown. Collaboration with contractors will be extremely important to get on the same page regarding work to be done before a shutdown. Being open, honest and transparent throughout the entire process will make for much smoother sailing in the long run.

It’s challenging to have every loose end resolved before demobilizing. For instance, if safety is top of mind when demobilizing, then it should be deemed a safe choice. Make sure that every possible hazard is assessed and attended. This may require a physical or virtual walkthrough of the entire site from executives. If the site is already demobilized, initiate that walkthrough as soon it’s back up and running, since conditions on the site should be (theoretically) identical to those before the stoppage.

Timeline/Budget

Regardless of emergency preparedness, the project timeline and budget are going to be affected. These delays aren’t unforeseen and there’s an inherent margin of error, but staying ahead of potential project derailers is wise. To minimize these effects, track the costs required, ramp down, stay down, and later ramp up the project. Keeping these organized and up to date will limit those disputes discussed earlier as well. Also, as projects come back online, it is critical to ensure that the lag time to full productivity is reduced as much as possible. Ensure materials that are affected due to the current manufacturing shutdowns are ready when sites resume operations.

Funding and Loans

Prior to taking any action to terminate an agreement, rights, remedies, and consequences under all funding, grant or loan instruments must be evaluated. These instruments may have provisions which limit or require third party approval all together before a project is suspended or shutdown. Also worth consideration is if the cost impact of the shutdown will require funding from another source. The aforementioned funding agreements could be limited in terms of what is covered. Constant communication will ensure which costs are covered, hopefully limiting the need for any additional funding.

The list of what to consider throughout your development process during this pandemic is longer than a CVS receipt. Narrowing it down to funding/loans, timeline/budget, litigation/disputes, and site security is a good place to start. With these three fastened down and kept under control, industry leaders will have no problem when non-essential activities resume.

We've been helping our clients fully document their sites before shutdowns, and would be happy to help where we can. Please reach out to info@onsiteiq.io for more information.

Author
Matt Gorwitz
6 Minutes

Offices across the globe.

AUD

NYC

CHN

EU