On April 1, Steve Seasly, Kara Williams and Ivan Golden shared insight with members of the Construction Employers’ Association in a webinar that highlighted important guidance related to the Families First Coronavirus Response Act and the Paycheck Protection Program. You can watch a recording of this webinar below.
On April 1, 2020, ODOT provided direction on enforcement of COVID-19 social distancing on ODOT projects. The April 1, 2020 memo is linked HERE. ODOT project staff are directed to observe contractors’ work to confirm both six foot social distancing and look for visibly sick employees. The memo directs ODOT project staff to notify the contractor of violations. Most critical is ODOT acknowledges the need to resequence or temporarily suspend some work to comply with the order. Contractors forced by the Stay at Home Order to resequence or suspend work should notify ODOT in strict accordance with CMS contract requirements, otherwise contractors risk waiver of their right to an increase in the contract time or price.
ODOT continues to sell additional work which may now include Proposal Note 095 – Potential Impacts and Delays Due to COVID-19, linked HERE. Under PN 095, contractors are to include impacts they foresee due to the stay at home order in their bids. PN 095 does permit a 30 day project extension under CMS 108.02.F, and if that is inadequate, the contractor can seek a termination for convenience. Those bidding ODOT work now should carefully consider the COVID-19 virus in their estimates and bids.
On March 28, 2020, the Ohio Facilities Construction Commission (OFCC) Executive Director Cheryl Lymon circulated a letter to contractors and design professionals detailing the obligations of businesses holding OFCC contracts during the recent COVID-19 pandemic. The letter reiterates the importance of employers complying with Ohio Department of Health Director Amy Acton, MD, MPH’s March 22, 2020 Stay at Home Order. However, the most recent OFCC guidance elaborates on the ways in which contractors and design professionals must conduct themselves on job sites in order to comply with protocol for OFCC-administered state construction projects.
In order to remain in compliance with the OFCC’s protocol regarding safety on OFCC state project job sites, the OFCC has prescribed a number of actions that companies must take. While the protocol is ever-changing, the most recent OFCC guidance does list specific actions that companies must follow. These include:
Contractors and design professionals currently working on an OFCC project should consider taking all of the following steps:
The failure to take such measures could lead to claims or administrative penalties.
Please do not hesitate to contact us with any questions regarding these new developments.
On Friday, March 27, Ohio Governor Mike DeWine signed an order that would ensure every state contractor that is operating as an essential business is following best practices regarding social distancing, cleaning, etc. DeWine also reiterated in his afternoon press conference on Saturday, March 28 that state contractors performing essential contracts should expect inspections in the near future to ensure they are in compliance.
Today, Aaron Evenchik participated in a webinar by the Construction Employers’ Association with others from the industry to share insight with contractors related to COVID-19 on documenting and calculating COVID-19 delays. You can watch the CEA’s recorded program here:
On March 24, the Ohio Department of Transportation released a “Statement Regarding COVID-19 Response” in an attempt to provide guidance for contractors working on ODOT projects. A copy of the Statement is available here. The major takeaway from the Statement is that ODOT confirmed its position that “specific circumstances directly caused by the COVID-19/Coronavirus are excusable, non-compensable delays in accordance with CMS 108.06(B)(5).” That subsection of the CMS relates to “delays from fires or epidemics.” While ODOT’s position is that any delays will be non-compensable, it fails to address the fact that many contractors will experience increased labor and/or material costs due to compliance with current government directives, i.e. “social distancing” rules, which are excusable and compensable pursuant to CMS 108.06.D.4. However, the Statement does state that any contractor who contends a delay is compensable should submit a “detailed cost analysis of the requested additional compensation along with requests for extension of the Project Completion Date.” All impacted contractors should carefully review and follow all contract requirements and provide prompt notice to ODOT of any delays and increased costs due to the pandemic, and follow the CMS process for escalating those claims as needed. Strictly follow all contract requirements and track all costs, labor inefficiencies, and escalated costs that occur as a result of compliance with governmental directives.
The construction industry is currently experiencing an upheaval like nothing ever experienced before. In times like these, it is important to remember first principles: while the COVID-19/coronavirus pandemic is certainly a new type of delay, the requirements in your contract documents are not new, remain key, and in full force and effect. Review the notice provisions in your contract, provide prompt written notice of any delays or increased costs, and follow the dispute resolution process in your contract documents. ODOT’s March 24 Statement simply reinforces these key ideas. If you have any questions or concerns, please contact any member of the Hahn Loeser Construction Team. We stand ready to assist the industry in these trying times.
As of Thursday, March 19, 2020, Ohio State agencies are reporting that construction projects will continue, despite the Coronavirus. The Ohio Department of Transportation (ODOT) directed office staff, who are able, to work remote, but confirmed to me personally on Monday March 16 that project work should continue. Ohio Facilities Construction Commission (OFCC) also reported to Rich Hobbs, of the AGC, that construction work should continue, unless specific projects require suspension. OFCC asked that meetings be conduced on a remote basis, including internet applications and conference calls.
Notice and documentation are critical for those experiencing project delays with ODOT and OFCC.
The Families First Coronavirus Response Act was signed into law on March 18, addressing many topics related to COVID-19 Disease 2019, including amendments to the Family Medical Leave Act and creation of national emergency paid sick leave.
We invite you to read the recent Client Alert from our Labor and Employment Team summarizing the employment aspects of this Act.
During this 30-minute phone conference, Hahn Loeser’s Construction Team will discuss:
Hahn Loeser partners Aaron Evenchik, Andy Natale and associate Greg Thompson, along with Employment Practice Area Chair Steve Seasly will discuss the latest guidance, provide proactive information, and address questions from attendees.
Thursday, March 19, 2020
12:00- 12:30 p.m.
Meeting Number (access code): 801 942 102
Meeting password: HLP123
Join Meeting
Join by phone:
1-877-668-4493 (toll-free number – US and Canada)
1-650-479-3208 (toll number – US and Canada)
The COVID-19 coronavirus is impacting every aspect of the economy, and construction will not be exempt. Materials and deliveries may be slowed, crews quarantined and unavailable, and projects delayed. We view COVID-19 as an event beyond the control of a party (an “act of G-d”), falling within the force majeure provision of most contracts. Some standard form construction agreements already define “force majeure” in such a way as to expressly include “epidemics” (which the COVID-19 coronavirus is). Contracts published by ConsensusDocs, DBIA, and The Engineers Joint Contract Document Committee all include “epidemics” within the scope of events that support an “excusable delay.”
As a force majeure event, the impact of COVID-19 may be deemed an excusable, but non-compensable, delay. Contractors will likely be entitled to an extension of time to perform but not additional compensation (although they possibly may be reimbursed for acceleration costs if a schedule cannot be extended – assuming that is even possible).
Contractors will want to send notice promptly after becoming aware that COVID-19 has affected materials deliveries, labor availability, or other aspects of a project, in strict accordance with the contractual notice requirements, advising of the delay. Likely, the extent of the delay will be unknown, as it may not be clear when restrictions will be lifted, when travel and deliveries will be reinstated, or when crews will be healthy and available. Contractors would be mistaken to do nothing and presume that the customer will be reasonable. It is far more prudent to send a simple notice explaining the delay, stating that the duration will be unknown, and stating that the contractor is requesting an extension of the contract performance time. Contractors should be sure to check the precise contractual provisions relating to providing notice of delay, because some contracts require contractors to waive their rights to an extension of time to perform if they fail to provide notice in strict accordance with the terms of the contract. Contractors will also want to track and be able to document delivery delays and crew and material availability in order to support the full extent of any requested extension.
Owners, landlords, and lenders affected by these delays will also need to be reasonable in terms of modifying schedules and expectations. The full extent and impact of COVID-19 will not be known for some time, and all members of the industry will be well-advised to exercise patience as we navigate these uncertain waters.