Category Archives: Delay Damages

DIFFICULT TASK FOR COURT TO ANALYZE DELAY AND DISORDER ON CONSTRUCTION PROJECT

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One of my favorites quotes from a case, and I am sure others in the construction industry feel the same way or can relate, is from the District of Columbia Court of Appeals in Blake Construction Co., Inc. v. C.J. Coakley Co., Inc., 431 A.2d 569, 575 (D.C. 1981):

We note parenthetically and at the outset that, except in the middle of a battlefield, nowhere must men coordinate the movement of other men and all materials in the midst of such chaos and with such limited certainty of present facts and future occurrences as in a huge construction project such as the building of this 100 million dollar hospital. Even the most painstaking planning frequently turns out to be mere conjecture and accommodation to changes must necessarily be of the rough, quick and ad hoc sort, analogous to ever-changing commands on the battlefield. Further, it is a difficult task for a court to be able to examine testimony and evidence in the quiet of a courtroom several years later concerning such confusion and then extract from them a determination of precisely when the disorder and constant readjustment, which is to be expected by any subcontractor on a job site, become so extreme, so debilitating and so unreasonable as to constitute a breach of contract between a contractor and a subcontractor. 

Do you agree with this sentiment?  The reality is that retrospectively analyzing delay on a complicated construction project with numerous moving parts on a day-by-day, hour-by-hour, basis is no easy feat.  It is not easy for the parties and certainly not easy for courts to unravel. With every party claiming delay based on a retrospective analysis there will be another party with either a different delay analysis or providing credible cross examination as to flaws with the delay analysis.  The same bodes true with loss of productivity / inefficiency claims and the particular case-specific facts are important, preferably with evidence such as photos, videos, notifications, daily reports, manpower reports, etc., supporting the facts. But the facts are complicated, and the delay analysis is complicated, and it is a difficult task for a trier of fact to unravel these facts.

This case dealt with a dispute between a prime contractor and a fireproofing subcontractor. The subcontractor claimed its work was hindered for a variety of reasons.  In other words, the subcontractor was impeded from working efficiently and it was incurring unanticipated costs – the hallmark of a lost productivity or inefficiency claim.  The subcontractor sent notice to the prime contractor that it would be suspending its operations and did exactly that resulting in the prime contractor completing the subcontractor’s scope of fireproofing work.  A lawsuit arose and the trial court found the prime contractor liable to the subcontractor.   The trial court found the prime contractor breached implicit obligations in the subcontract as it (i) did not provide the subcontractor a clear and convenient work area that impeded the subcontractor’s work causing the subcontractor to incur additional sums, (ii) failed to reasonably sequence the work, and (iii) provided bad supervision as other trades damaged in-place fireproofing due to poor scheduling and certain space heaters belonging to the subcontractor were stolen.  See Blake Construction, supra, at 576-77 (“We are persuaded therefore that the trial judge properly concluded upon this record that these acts collectively and individually constituted a breach of implicit conditions for performance by [the prime contractor] under the subcontract.”).

The appellate court also agreed with the trial court as to the inapplicability of the no-damage-for-delay provision in the subcontract finding delays resulted from active interference “largely due to [the prime contractor’s] improper work sequencing.”  Blake Construction, supra, at 579.

The appellate court also found that the measure of damages to be awarded to the subcontractor from the prime contractor “is properly calculated by taking the cost of partial performance incurred [by the subcontractor], which was $598,666.75, and subcontracting therefrom the payment received to date by [the subcontractor] from [the prime contractor], which totaled $242,100. The difference between these two figures is $356,566.75, and constitutes the damages for which [the prime contractor is] liable to [the subcontractor].”  Blake Construction, supra, at 579.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

CONSTRUCTION DELAYS: WHICH METHOD SHOULD BE USED TO CALCULATE DELAY?

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If you need to prove and allocate construction project delays, you should engage a scheduling consultant qualified with CPM (critical path method) analysis.  You should also engage counsel to assist in preserving your rights, as well as presenting and maximing your arguments for delay.

There are numerous methodologies used to quantify and allocate delay. You want to discuss the most effective analysis for your case and facts including whether you want/should use a forward-looking prospective analysis or a backward-looking retrospective analysis that factors in as-built data.  In doing so, you want to make sure you understand the pros and cons of each methodology including the bases to attack the methodology that will be subject to cross-examination.  The five primary CPM methodologies are as follows:

 

 

 

 

  1. As-Planned Versus As-Built. This methodology compares the as-planned baseline schedule to an as-built schedule reflecting progress to assign delay.  An as-built schedule that reflects progress includes actual start dates, finish dates, and durations.  The actual dates and durations are compared with the as-planned dates and durations on the baseline schedule to determine delay.  Under this methodology, the delay impact is determined retrospectively.

 

  1. Windows Analysis. This methodology divides the project into windows of period of time and focuses on an as-built critical path analysis that relies on progress schedule updates and as-built data.  The as-built critical path is then quantified for each of the periods (or windows).   The methodology compares the as-planned baseline schedule’s critical path to the as-built schedule (and as-built conditions) during the window to quantify delay. Under this methodology, the delay impact is determined retrospectively.

 

  1. Collapsed As-Built. This methodology is the “but for” methodology as it analyzes the earliest date the project would have been completed “but for” identified delays.  This methodology removes delay events from the as-built schedule to determine when the project would have been completed “but for” the delay event(s).  Under this methodology, the delay impact is determined retrospectively.

 

  1. Impacted As-Planned. This methodology inserts potential delay events/activities into the as-planned baseline schedule to determine impacts.  By inputting new delay activities into the baseline as-planned schedule, new logic and a new critical path is created to result in a new completion date (i.e., an impacted, as-planned schedule).  The difference between the completion date in the impacted, as-planned schedule and the (unimpacted) as-planned baseline schedule represents the delay.  This methodology does not rely on as-built data and prospectively determines delay.

 

  1. Time Impact Analysis. This methodology analyzes delay events individually based on the schedule update immediately prior to the delay event.  The difference between the project’s completion date before and after the delay event quantifies the delay.  Under this methodology, the delay event is added into the updated schedule closest to the event to see if the project completion date changes based on the event’s impact to the completion date.  This methodology does not rely on as-built data and prospectively determines delay based on when the event occurred.

 

It is not uncommon for parties to use different methodologies to quantify and assign delay.  It is also not uncommon for the parties to attack the other methodology as unreliable– whether not focusing on what actually occurred or not focusing on an event the moment it occurred based on the schedule or plan in-place as of the delaying event(s).  As an example only, in K-Con Building Systems, Inc. v. U.S., 131 Fed.Cl. 275 (Fed.Cl. 2017), a contractor asserted claims relative to the government’s delay. The contractor claimed the critical path should be analyzed with a prospective analysis predicated on its as-planned performance.  The government disagreed claiming the critical path should be analyzed based on a retrospective as-built analysis.  The Court of Federal Claims agreed with the government “that the proper way to determine what activities were on the critical path of performance in this case is to examine what actually occurred during contract performance.”  K-Con Building Systems, supra, at 329.  The Court reached this conclusion because: (1) “a critical path schedule that relies solely on the [baseline] schedule set forth in the contract specifications does not account for subsequent changes to the schedule authorized by the contracting agency” and (2) “the use of a contractually based critical path schedule does not reflect that the [contractor] did not actually perform in accordance with the [baseline] schedule set forth in the contract specifications.”  Id. at 329-330.  Stated differently, the as-planned approach that the contractor employed did not “fully reflect the reality of what occurred on the project.”  Id.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

DOES A SUB NEED TO USE AN EXPERT OR PRESENT CPM ANALYSIS TO SUPPORT A DELAY CLAIM?

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Does a subcontractor need to prove its delay claim (including its lost productivity claim) with expert testimony or a CPM analysis?  A federal decision out of the District Court of Maryland proposes that maybe a subcontractor does not need to go this route. See Baker DC, LLC v. Baggette Construction, Inc., 378 F.Supp.3d 399 (D.Md. 2019). If you are a subcontractor presenting a delay or lost productivity claim, you should work with counsel and ideally an expert to best present, package, and support the claim with expert analysis.   However, this case, discussed below, creates an argument that the use of an expert or even CPM analysis may not be required as a matter of law to support a subcontractor’s delay-type of claim. This is good news for a subcontractor to hear, especially when the subcontractor was not the one that prepared the CPM schedule that included activities unrelated to the subcontractor’s work; and, using an expert and preparing a CPM analysis can be a costly endeavor.

In this case, a concrete subcontractor’s work on a federal project dragged on much longer than anticipated.   The subcontractor sued the prime contractor claiming the contractor delayed and disrupted its work causing its work to be extended and inefficient and costing it more to perform.  The prime contractor moved for summary judgment arguing that the subcontractor cannot demonstrate claims or damages for delay because the subcontractor will not be using an expert or presenting a critical path method (CPM) analysis.  The trial court refused to grant summary judgment on this issue maintaining it is “unwilling to declare as a matter of law [the subcontractor] cannot prove its claim for delay damages without expert testimony or evidence of a CPM analysis.” Baker DC, supra, at 412.

In reaching this decision, the trial court analyzed the purpose and function of a CPM schedule which is to allow “contractors performing complex projects to identify a critical path of tasks that must each be completed before work on other tasks can proceed.” Baker DC, supra, at 411 (quotation and citation omitted).

As one federal court long ago explained, contractors conduct a critical path analysis on a complex construction project by analyzing each of the various separate, but interrelated, small projects within the larger whole, considering the work involved and the expected duration of each subproject. The analysis seeks “to determine the most efficient schedule for the entire project,” recognizing that some subprojects cannot proceed until another has finished its course – for example, “one could not carpet an area until the flooring is down[,] and the flooring cannot be completed until the underlying electrical and telephone conduits are installed.” Subprojects that must be performed on schedule, lest they delay the entire project, are said to be on the “critical path.”

The U.S. Court of Claims has explained:

The reason that the determination of the critical path is crucial to the calculation of delay damages is that only construction work on the critical path had an impact upon the time in which the project was completed. If work on the critical path was delayed, then the eventual completion date of the project was delayed. Delay involving work not on the critical path generally had no impact on the eventual completion date of the project.

Baker DC, supra, at 411-12 (internal citations omitted).

However, while CPM analysis through the use of expert analysis is clearly the preferred or established method, the court noted that this “is not the same as declaring that a plaintiff must provide such evidence, as a matter of law, to prove damages of this variety.” Id. at 412 (explaining that the prime contractor has not produced any cases where a court required a subcontractor to present CPM analysis evidence in its dispute against a general contractor).  This is precisely what the subcontractor wanted to hear!

 

Another noteworthy issue raised in this case dealt with whether the subcontractor’s bid was part of the subcontract.  The subcontractor wanted to argue it was part of its subcontract because the subcontractor included qualifications in its bid that would be used to support its delay and inefficiency claim.  The prime contractor also moved for summary judgment arguing that the bid was not part of the subcontract because the subcontract contained an integration clause and, naturally, the subcontract contained provisions that would render moot the subcontractor’s qualifications in its bid.  (The integration clause read: “This Agreement constitutes the entire agreement between the parties hereto.  No oral representations or other agreements have been by [the prime contractor] except as stated in the Agreement.”  There is a reason lawyers include such language in contracts!  This is important language that should be used and should not be dismissed as unimportant.)  The court agreed with the prime contractor on this issue stating “the parties reasonably understood the written agreement would supersede any prior negotiations or agreements.”  Baker DC, supra, at 409.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

HOW THE CUMULATIVE IMPACT THEORY HAS BEEN DEFINED

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Largely in the federal contract arena, there is a theory referred to as “cumulative impacts” used by a contractor to recover unforeseeable costs associated with a multitude of changes that have an overwhelming ripple effect on its efficiency, particularly efficiency dealing with its original, base contract work.  In other words, by dealing with extensive changes, there is an unforeseeable impact imposed on the contractor relative to its unchanged or base contract work.  Under this theory, the contractor oftentimes prices its cumulative impact under a total cost approach with an examination on its cost overrun. However, this is not an easy theory to prevail on because there needs to be a focus on the sheer number of changes, causation supporting the impact, and whether there were concurrent impacts or delays that played a role in the ripple effect.  See, e.g., Appeals of J.A. Jones Const. Co., ENGBCA No. 6348, 00-2 BCA P 31000 (July 7, 2000) (“However, in the vast majority of cases such claims are routinely denied because there were an insufficient number of changes, contractor-caused concurrent delays, disruptions and inefficiencies and/or a general absence of evidence of causation and impact.”).

To best articulate how the cumulative impact theory has been defined, I want to include language directly from courts and board of contract appeals that have dealt with this theory.  This way the contractor knows how to best work with their experts with this definition in mind–and, yes, experts will be needed–to persuasively package and establish causation and damages stemming from the multitude of changes.  While many of these definitions are worded differently, you will see they have the same focus dealing with the unforeseeable ripple effect of the extensive changes.

Any contractor seeking an equitable adjustment from the Government must prove liability, causation, and resultant injury.  An impact claim—often characterized using other names, such as, “cumulative impact,” “ripple effect,” “loss of labor efficiency,” or “loss of productivity”—is based upon the theory that  individual compensable changes to a Contract, taken as a whole, can have such a disruptive effect on the contractor’s performance that the contractor has a compensable claim for costs in addition to the amounts of its individual change orders.

In order to recover on an impact claim, a contractor must do more than present evidence of the sheer number or scope of changes.  Nor is it sufficient to compare the cost of the work, as changed, to the original contract price.  A contractor must also present evidence of causation and impact. Cumulative impact claims are fact-intensive and require the contractor to substantiate its claims that its work was delayed or was performed in an inefficient, unproductive, or more costly manner as a result of the individual changes to the Contract. As one board observed, “[t]here must be testimony and contemporaneous documents evidencing the type and extent of disruption to the work, and a showing that the disruption resulted from Government actions.” 

Jackson Const. Co. v. United States, 62 Fed.Cl. 84, 103–04 (2004) (internal quotations omitted).

Or:

Because contractors are required to include known and generally foreseeable impacts on unchanged work in pricing the cost of a change, the term “cumulative impact” has come to mean, in a generic sense, the impact on unchanged work which is not attributable to any one change but flows from the synergy of the number and scope of changes issued on a project. The underlying theory is that numerous changes cause a cascading ripple-type of impact on performance time and efficiency which is too uncertain or diffuse to be readily discernable at the time of pricing each individual change.

***

We do not question that such impacts from cumulative changes do, in some instances, occur and should be compensated. However, we are mindful that impacts, whether on changed or unchanged work, which flow directly from individual changes are, with few exceptions, legally compensated by the price negotiated for the change and, thus, should be excluded from recovery under a cumulative impact claim. We are also mindful that even when a compensable cumulative impact is found, proof of damages under a total cost approach (an approach often relied upon in this type of claim) is acceptable only where safeguards for its use have been clearly established. The total cost method is not favored, in part, because it is extremely difficult to assure that the contract is not transformed into a de facto cost reimbursement contract and that costs which should be borne by [the contractor] are excluded. Thus, we must carefully examine any claim of cumulative impact under a total cost approach to assure that the four factors generally recognized for its use have been met.

Mcmillin Bros. Constructors, Inc., EBCA No. 328-10-84, 91-1 BCA P 23351 (Aug. 31, 1990).

Or:

Cumulative impact is the unforeseeable disruption of productivity resulting from the “synergistic” effect of an undifferentiated group of changes. Cumulative impact is referred to as the “ripple effect” of changes on unchanged work that causes a decrease in productivity and is not analyzed in terms of spatial or temporal relationships. This phenomenon arises at the point the ripples caused by an indivisible body on two or more changes on the pond of a construction project sufficiently overlap and disturb the surface such that entitlement to recover additional costs resulting from the turbulence spontaneously erupts. This overlapping of the ripples is also described as the “synergistic effect” of accumulated changes. This effect is unforeseeable and indirect. Cumulative impact has also been described in terms of the fundamental alteration of the parties’ bargain resulting from changes. 

***

Causation, in the context of a cumulative impact, can be an elusive commodity because the concept of cumulative impact is, in itself, somewhat amorphous. Several points relevant to cumulative impact and causation, however, are clear. First, the mere existence of numerous contract changes in and of themselves, whether or not the number of changes is considered to be reasonable or unreasonable and whether or not the changes resulted from defective specifications, establishes no right to recover cumulative impact costs. Consequently, contract changes alone, regardless of their number or nature combined with Government liability do not serve as a substitute for causation and do not necessarily give rise to cumulative impact damages. Second, it is clear that demonstrating an overrun in labor and the existence of numerous changes without some evidence linking the changes to the overrun is insufficient proof of causation. Finally, there must be some proof of a causal connection established showing that the undifferentiated group of contract changes affecting the changed and unchanged contract work resulted in the loss of productivity on that work. This proof may take the form of demonstrating that there are no other reasons for a loss of productivity for which the Government is not responsible. 

Appeal of Centex Bateson Const. Co., Inc., VABCA No. 4613, 99-1 BCA P 30153 (Dec. 3, 1998).

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

CONTRACTOR’S BURDEN WHEN IT COMES TO DELAY

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When a contractor is challenging the assessment of liquidated damages, or arguing that it is entitled to extended general conditions, the contractor bears a burden of proof to establish there were excusable delays that impacted the critical path and, in certain scenarios, the delays were not concurrent with contractor-caused delay:

When delays are excusable, a contractor is entitled to a time extension, such that the government may not assess liquidated damages for those delays.  The government bears the initial burden of proving that the contractor failed to meet the contract completion date, and that the period of time for which the government assessed liquidated damages was correct. If the government makes such a showing, the burden shifts to the contractor to show that its failure to timely complete the work was excusable. To show an excusable delay, a contractor must show that the delay resulted from “unforeseeable causes beyond the control and without the fault or negligence of the Contractor.”  “In addition, the unforeseeable cause must delay the overall contract completion; i.e., it must affect the critical path of performance.” Further, the contractor must show that there was no concurrent delay.

Ken Laster Co., ASBCA No. 61292, 2020 WL 5270322 (ASBCA 2020) (internal citations omitted).

Arguing delay without understanding your burden of proof obligations will be problematic, as the contractor in Ken Laster found out.  In this dispute, a contractor was issued task orders to repair, prepare and plaint certain floating structures pursuant to task orders.  The contractor was liable for liquidated damages if it did not timely complete the work.  The contractor completed the work 289 days late and the government assessed liquidated damages.  The contractor challenged the assessment of liquidated damages. However, the contractor did NOT show how anything it claimed the government did to delay completion impacted the critical path or that there was no concurrent delay.  Without such showing, the contractor was unable to establish that liquidated damages were improper as it was unable to show there was excusable delay or that the delay to the critical path it caused was concurrent with an owner-caused delay to the critical path.

Remember, if you are a contractor challenging the assessment of liquidated damages and/or claiming you are entitled to delay damages (extended general conditions), you have a burden of proof.  You will want to establish that there was excusable delay, i.e., owner-caused delay, that impacted the critical path of the project resulting in the delay to the completion date, and the excusable delay was not concurrent with delay you caused to the completion date.  This burden will routinely require expert opinion that will need to analyze schedules and contemporaneous project documentation to render these opinions (that there was excusable delay, the delay impacted the critical path, and in certain scenarios, the excusable delay was not concurrent).   It is important to note, however, that if you are able to establish there was concurrent delay, you would still typically be entitled to a time extension, however, you would not be entitled to compensation for the delay (extended general conditions).  But, the burden is still on you to establish there was concurrent delay.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

QUICK NOTE: COVID-19 CLAIM – PROVING CAUSATION

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In certain jurisdictions, the number of people testing positive for COVID-19 is on the rise.  As this occurs, there is the possibility that a construction project will have to deal with one or more workers testing positive.  That is the current reality.   If the dialogue has not occurred before, now is the time to discuss any enhanced measures—above OSHA guidelines—that could be implemented to address this reality and mitigate the risk.  Part of the reality, though, is that regardless of the enhanced measures and mitigation, it is impossible to truly prevent this risk.

No one disputes COVID-19.  There may be a dispute as to whether COVID-19 constitutes a force majeure event or some other event, however, before you start labeling it, you still NEED TO PROVE the impact caused by COVID-19.  There needs to be a cause-and-effect relationship so you can address (i) how this impacted the critical path of your schedule and/or (ii) how this impacted labor productivity.  In other words, you need to prove causation.  Stating there was a delay or loss of productivity without establishing the cause-and-effect relationship (i.e, causation) provides no value because it does not support the production impact or time extension and, without either, there is no basis for additional compensation (even if you establish it should be deemed an excusable, compensable delay).

We have all read articles about how COVID-19 can impact a project.  This does not mean that all or any of these issues impacted your project.  If they did, and you are seeking a time extension and/or additional compensation, remember, it is your burden of proof to support the entitlement, both as to time and money.  This is not an easy task and, in many situations, the impact may be very difficult to actually prove.  But again, stating you have a COVID-19 impact without truly demonstrating causation will be, and should be, a claim that is denied.  If you need assistance putting together or evaluating a COVID-19 claim, make sure you work with experienced counsel and consultants to best package and present the claim.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

ACTIVELY INTERFERING WITH ANOTHER’S PERFORMANCE GIVES RISE TO A BREACH OF CONTRACT

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A bedrock principle under contract law is that one party cannot actively hinder, interfere, obstruct, or delay another’s party’s performance.  Doing so can give rise to a breach of contract.

It is one of the most basic premises of contract law that where a party contracts for another to do a certain thing, he thereby impliedly promises that he will himself do nothing which will hinder or obstruct that other in doing the agreed thing. Indeed, if the situation is such that the co-operation of one party is a prerequisite to performance by the other, there is not only a condition implied in fact qualifying the promise of the latter, but also an implied promise by the former to give the necessary co-operation.

Harry Pepper & Associates, Inc. v. Hardrives Co., Inc., 528 So.2d 72, 74 (Fla. 4th DCA 1988) (citation omitted).

The ruling in Harry Pepper & Associates demonstrates what can happen if a contracting party actively hinders, interferes, obstructs, or delays the other party’s performance.  Here, a paving subcontractor walked off the project prior to performance.   At the time it walked off the job its work could not commence due to prior delays with predecessor activities, revised drawings had not been approved by the governing building department, change orders had not been issued to deal with different site conditions, and the subcontractor was not offered an increase in its original contract price.  For these reasons, it called it quits.  The general contractor claimed the subcontractor did not have the contractual right to walk off the project.  There was a no-damage-for-delay provision in the subcontract and the subcontractor’s only remedy for delays was extensions of time for delayed performance. The general contractor, therefore, sued the subcontractor for the additional costs incurred in hiring a replacement paving subcontractor.  Conversely, the subcontractor was not seeking additional costs due to the delays but simply the right to cancel the contract.

The appellate court, affirming the trial court, held that regardless of the no-damage-for-delay provision, it was rendered unenforceable by the active interference of the general contractor: “There is competent and substantial evidence in the record that the general contractor did not cooperate with the subcontractor and engaged in conduct which hindered or obstructed the performance of the contract.”  Harry Pepper & Associates, 528 So.2d at 74.

Remember, regardless of whether your contract addresses delays or production, a party that actively interferes, hinders, obstructs, or delays another’s performance can give rise to a breach of contract.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

QUICK NOTE: CHARTING YOUR CONTRACTUAL RIGHTS WITH RESPECT TO THE CORONAVIRUS

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As more and more information is being learned, and more and more industries are being impacted, it is likely that the construction industry will follow suit.  And, while impacts with the global supply chain may not yet be realized, impacts could begin with labor supply and, frankly, employers’ safety protocols dealing with the coronavirus.  One suggestion that should be implemented is a detailed chart, similar to the below, where you are charting rights and obligations under your contracts dealing with force majeure, notice, and project suspensions.  This is step one to make sure you are making prudent decisions, preserving rights, and making sure contractual obligations are being met.  Be proactive, not reactive.

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

 

QUICK NOTE: QUESTIONS AS TO THE FORCE MAJEURE IMPLICATIONS OF THE CORONAVIRUS? DO NOT HESITATE TO CONTACT ME!

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If you have questions or concerns, and I am sure you do, as it pertains to the coronavirus and its force majeure implications on construction projects you are involved with, please do not hesitate to contact me or someone else that you trust can help.   Do NOT take a reactionary position and wait for things to get worse or for there to be more formalized suspensions in place, or impacts realized.  It is not worth it.  Please make sure you are undertaking efforts to know your contractual rights and options so that you can develop the best plans to preserve these rights and options.  Do it for you, your business, your personnel, and all the people you rely on in the performance of your work.  I remain here to assist in any way that I can to help you get through any delay, impact, and interruption the coronavirus and its force majeure implications may have on your business.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

BE PROACTIVE, NOT REACTIVE, TO PRESERVE FORCE MAJEURE RIGHTS REGARDING THE CORONAVIRUS

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If you are involved in construction, NOW is the time to consider the potential force majeure impacts associated with the pandemic Coronavirus.  Things are beginning to drastically change on a minute-by-minute basis.  From travel restrictions, to the suspension or cancellation of events on an international level, to company-wide policies and restrictions, the global uncertainty has led to the possibility that a force majeure delay will occur.  Thinking otherwise is not being proactive.  The Coronavirus, and the impacts / delays associated therewith, is beyond anyone’s control.  Due to the uncertainty, it is hard to fathom at this time a reasonable challenge to someone’s reaction to this concern or their companywide response to the concern.

 

If you are a contractor, subcontractor, or even a supplier, my suggestions would be as follows:

  1. Revisit your contracts and see what type of force majeure language it has – anything relating to delays beyond your control or epidemics;
  2. Examine to see whether you have a basis for additional compensation AND additional time;
  3. Examine what type of notice you are required to provide for force majeure events;
  4. Be proactive – send notice now of the potentiality that this pandemic can impact / delay the job –no one should take offense to this letter as this pandemic has impacted all walks of life;
  5. If an impact occurs, send follow-up notice accordingly to ensure rights under the contract are preserved; and
  6. For future contracts, incorporate language that specifically addresses epidemics and pandemics now that the occurrence of this issue has become real.

If you are an owner, I would suggest that you also revisit your contract to reacquaint with the force majeure provisions and whether a force majeure provision allows for additional compensation and time.  This is important for you to deal with too.  You should also consult with your insurance broker to review policies in place to see whether you have insurance to cover losses associated with a pandemic.

If you need assistance with any of these activities, or want to inquire as to your rights, please give me a call.  You can also call my cell at (954) 295-6117.  Be proactive, not reactive, and having a contingency in place, determining a solution, and preserving rights is the right approach.  I remain here to help and to steer you in the best possible direction in light of this uncertainty.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.