There has been much discussion in industry about Force Majeure and contractual mechanisms for dealing with the impact of Coronavirus. The legal and contractual circumstances of each project will vary, and there is no single correct answer to questions of “Is there a contractual claim for Coronavirus?”
Our experience tells us that, aside from contractual entitlement issues, the most fundamentally important factor in successfully establishing a position in regard to any delay or disruption, regardless of the cause, is good record-keeping.
We’ve set out some simple guidelines, as follows:
- Establish where your project is up to NOW
- Status programmes – detailed mark-ups and rescheduling to understand changes to the critical path;
- Fabrication, shipping and delivery records;
- Financial record updates (costs incurred / invoiced);
- Percent complete estimates, with supporting evidence, on major and ongoing activities;
- Comprehensive and detailed site diary entries, on a daily basis.
- Establish and record the impact of doing nothing
- If you are taking action to limit the impact of delays and disruption, it is important to establish early what the unmitigated outcome would be (in both cost and programme terms). This provides a baseline for acceleration and mitigation cost recovery.
- Identify and Record the Cost and Impact of recovery measures
- It is important to be able to separate the cost of specific recovery actions, from costs that would have otherwise been incurred. Of course this is much easier to achieve as the costs are incurred, than weeks or months later. Also, identify the effect of those specific actions on project programme and cost outcomes.
- Ongoing Record-Keeping
- The effect of Coronavirus on projects is likely to be disruption (loss of productivity), as much as delay. Quantification of disruption relies on consistent and regular record-keeping, including (in addition to the above):
- Resource levels (labour / plant / materials – daily)
- Quantities / output achieved
- Capturing and recording reasons for lower-than-planned productivity.
- Status programmes at least weekly.
Whilst the future is as uncertain, what is certain is that quality project records will be invaluable in the quantification of the effects of this new challenge.
If you’d like to find out more, please contact your local TBH office here: