Construction Delays and Cost Overruns in 2021: Supply Chain Issues, Concurrent Delays and Scheduling

Description

The global spread and continued surges of COVID-19 have generated unprecedented disruptions, and uncertainty on construction projects due to travel restrictions, social distancing, quarantines, and contractors' and governmental inspectors' availability, resulting in project delays and increased costs.

The pandemic will unleash contractor claims for time extensions, delay damages, project disruptions, and labor inefficiencies. Delays directly caused by COVID-19 may be "excusable" under the contract because the pandemic is a "cause." Regardless of whether a project is totally shut down or only delayed and disrupted, counsel must consider the impact of relevant local and state restrictions.

Owners must identify relevant contractual provisions and communicate with its contractor to mitigate project impacts. Depending upon a construction project's circumstances, the owner may consider suspending or terminating the project due to COVID-19.

The type of delay is also a factor, as some delays are "concurrent" when the project's critical path has multiple events not exclusively controlled by one party. Whether a delay is concurrent depends on the responsible party's identity and whether it was on the project's critical path. A contemporaneous delay that does not affect the critical path may not be concurrent for schedule review and analysis purposes.

Whatever the type, construction delays may not appear on schedule updates but are revealed when reviewing project documentation. Counsel must work with stakeholders to ensure the project's documentation reflects the deal as it stands over time.

Listen as our authoritative panel discusses the impact of COVID-19 on the continued construction delays, best practices for owners and contractors to address these delays, and how concurrent delays and scheduling may be affected by the pandemic.