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.