The COVID-19 pandemic is unlike any other crisis we have faced in decades. As contractors continue to work back toward normalcy, it’s critical to learn from recent experience and apply those lessons to preparing for the inevitable disasters and economic downturns of the future.

Review jobs, backlog and expenses

Take inventory of current jobs and be sure you understand all significant contractual provisions. Pay close attention to force majeure clauses, notice provisions and other contract terms that affect potential obligations, liabilities and costs. Also, realistically assess your backlog to determine its vulnerability to a slow economic recovery.

Consider whether your current and future jobs would be deemed “essential” in the event of a local shutdown. For example, projects that involve critical infrastructure or health care facilities are more likely to continue than those involving recreation or entertainment facilities. Use this assessment to develop contingency plans and to revise your project budgets and schedules, if appropriate.

In uncertain times, it’s even more important to review expenses and eliminate or defer those deemed discretional. Put a plan in place to immediately reduce expenses if a project shuts down.

Revisit succession and continuity plans

Ensure that your construction company has an emergency succession plan in place in the event of a temporary or long-term change in leadership. Such a plan is vital for preserving a chain of command so work can continue, and clients, employees and suppliers are reassured.

Meanwhile, an operational continuity plan should address supply chain disruptions, as well as the impact of a crisis on subcontractors (if you’re a general contractor). Devise contingency strategies should materials or labor become scarce or unavailable.

Implement best safety practices

Catch up on and implement the latest recommended safety protocols — including health screenings of workers and visitors, social distancing practices, and guidelines for cleaning and disinfecting work areas. You may need to revise how, where and when various tasks are performed to facilitate social distancing.

Infrastructure changes may also be necessary, such as:

  • Reconfiguring the layout of entrances and exits,
  • Modifying meal and break areas,
  • Setting up handwashing stations, and
  • Creating special storage areas for masks and other protective equipment.

Of course, good safety practices are effective only when followed. Be sure to undertake education, training and monitoring efforts to ensure compliance.

Consider remote options

During the onset of the COVID-19 crisis, employees of many types of companies made a sudden and often bumpy transition to working from home. Although this obviously isn’t an option for on-site construction workers, contractors can still hold virtual meetings rather than in-person ones and evaluate whether some employees might be able to work largely from home.

For example, preconstruction planning sessions could be held online. And, to minimize time spent in close quarters in a trailer, jobsite meetings could occur outdoors (weather permitting) or remotely as well.

Consult your advisors

To keep up with the latest on the pandemic and prepare for the future, you’ll need competent legal and financial advice. Consult your attorney to ensure that your contracts provide as much protection and flexibility as possible. In addition, contact us or ask your CPA for help revising budgets, preparing cash-flow projections, and ensuring you make the most of available tax relief and other government assistance.

© 2020

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Thompson Greenspon

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