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    Construction: COVID-19 Implications

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    As with most aspects of our lives right now, COVID-19 has created uncertainty for owners of construction projects. The stay-at-home order from the Ohio Department of Health, however, dated March 22, 2020 (effective 11:59 p.m. on March 23, 2020, through April 6, 2020), does add clarity for the construction industry by defining the term “Essential Infrastructure” for the State of Ohio. Specifically, paragraph nine of the order states: “[f]or purposes of this, individuals may leave their residence to provide any service or perform any work necessary to offer, provision, operate, maintain and repair Essential Infrastructure,” which “includes, but is not limited to: …construction (including, but not limited to, construction required in response to this public health emergency, hospital construction, construction of long-term care facilities, public works construction, school construction, essential business construction, and housing construction)…. Essential Infrastructure shall be construed broadly to avoid any impacts to essential infrastructure, broadly defined.” Nevertheless, given the nearly daily announcement of new containment measures and the volatile economic outlook, it is impossible to give direction that will apply to every project. But there are certain principles that owners should take into account:

    1. Read your contracts. Your contracts with your contractor and design professional may have notification and documentation requirements that you should review. Moreover, your specific contract will address the issues of the entitlement of the contractor and/or design professionals to additional time and/or money. Every contract is different, and the type of entitlement may vary depending on whether any delay or interruption is ordered by the government, results from supply interruptions that affect the critical path of the project, or results from unavoidable labor shortages, etc. The rights of the parties may also depend on whether the owner or the contractor initiates voluntary measures in response to COVID-19. It is advisable to discuss your contract requirements with an attorney who has experience in interpreting construction contract terms and evaluating contract adjustments.
       
    2. Evaluate your particular project. The nature of your project may inform your decision about what needs to be done. At the time of this writing, most contractors appear to be proceeding with construction. If the project involves improvements in unoccupied space or new construction, and the contractor is prepared to proceed with the work, you may decide that no owner action is required and to simply let the contractor notify you of any impacts that develop. If the space is occupied, but screening precautions and/or separation protocols are deemed adequate, you may wish to implement those steps. If you determine that your project is of a nature that requires work to be suspended or that the start of the work should be delayed, either because of special considerations that make it unwise to have contractors on-site or because it is of a nature that suspension of the work could result in damage to the work, a discussion with the contractor and design professional can go a long way toward mitigating any issues. (But it is best if you know what your contract says before the discussion occurs.)
       
    3. Consult legal counsel. Although attorneys are certainly not infection control experts, a knowledgeable and experienced construction attorney can help you frame your strategy with regard to evaluating the potential time delays and costs associated with your decisions or the decisions of others.
       
    4. Public/project meetings. In-person meetings such as bid openings and design professional and construction manager interviews are particularly difficult with the pending public health orders. Bricker attorneys have thoughtfully developed a process to use a technology platform, similar to a conference call, that considers the unique nature of these necessary meetings to meet both the requirements of the procurement statutes and the public health orders. Please contact Denise Ruddock, druddock@bricker.com, for information about having Bricker facilitate one or more meetings for your project.

    The world is much less predictable today than it was three weeks ago, as are the consequences of your decisions. Nonetheless, it is wise to make sure you understand as much as possible about your rights and responsibilities as you make those decisions.