Capital Works COVID Response CCG Forum April 2020
This document addresses critical aspects of the COVID-19 response impacting construction projects. It outlines the contractual positions, immediate contractor concerns, and guidelines set forth by MBIE for public entities. Key topics include the financial viability of contractors, the implications of lockdown measures, and strategies for delayed remobilization. The emphasis is on cooperation and leadership to navigate the challenges posed by the pandemic, ensuring preparedness for future operational changes in the construction sector.
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Capital Works COVID Response CCG Forum April 2020
Lockdown Level 4 25 March Routine site inspections: Security Scaffolding Weather tightness Insurer notified
Contractual Position UC Contractors Closed campus Complied with Lockdown and secured sites EOT supported with costs subject to special conditions within contracts. Sought UC suspension notice and variation based on change of law provisions in contract Consider cash flow relief options to enable rapid remobilisation Contractors make plans to return to site and maintain contact with subs
Immediate Contractor Concerns Cash People Materials
MBIE Guidelines to Public Entities Without steady cash flow, Contractors will not have the confidence or financial ability to retain their workforce
Additional Cost of Delayed Remobilisation Potential Mitigations Forward ordering Payment in advance Faster payment cycles Interim payments Release of retentions/bonds For results based contracts, basing payments on previous months MBIE Guidelines
Principal/Contractor Agreement Payment terms Cost recovery principles Agreement period Termination rights Process for remob. Certainty Daily rate for Level 4 Benefits to supply chain SOW during lockdown MBIE Guidelines
Planning for Level 3 Social distancing still in place Long term viability of Contractors Period of UC lockdown Potential for interim works Product availability
Conclusion COVID-19 has consequences for timing and costs on all construction projects. Joined up thinking is required to manage the risks to all parties. The outcome will be new ways of working. This will require leadership and cooperation within organisations and across the sector.
