Recommendations for projects affected by current Greater Sydney & Adelaide Construction Industry Shutdown

Whilst the effect of the Greater Sydney and Adelaide construction shutdown is immediate and profound, the lasting impacts on each project will of course depend on a range of factors which will come to light in the coming days and weeks, for example:

• Duration of the shutdown;
• Effect on supply chains (eg delivery uncertainty / manufacture pauses / storage costs / transport re-scheduling / supplier re-prioritisation of Sydney and Adelaide projects);
• Effect of any staged or partial re-opening strategies (eg productivity impacts and resource reallocation if certain projects are prioritised);
• Acceleration costs for projects striving for predetermined “hard” completion dates;

Our current recommendations for affected projects:

Initial actions 

1. Establish and agree the basis for contractual entitlement for recovery of cost and time applicable to the current situation;

2. Understand contractual time periods for notification of events giving rise to delay and cost – these should be adhered to for the benefit of all parties, notwithstanding the unprecedented nature of this event.

Time 

1. Review the requirements of the Contract regarding delay:

• Notice of Delay clauses
• Extension of Time clauses – their operation, and obligations of the parties;
• Ongoing notice provisions

2. Establish the status of the works (and the true critical path) at the commencement of the delay;

3. Continue to update the status of the works regularly throughout the delay – considering the full scope of the work under the Contract, including all off-site activities;

4. Start to consider the effect of any work that may be required relating to re-start of the work (site re-establishment);

5. Commence planning to minimise the impact of lost time – consider mitigation obligations, as distinct from acceleration proposals or instructions.

Cost

1. Quantify and record actual costs related to the shutdown as they occur, for example:

• Demobilisation costs;
• Site protection / security;
• Additional storage costs

Ideally isolated from other costs so they can be readily identified.

2. Start to consider:

• The cost of any work that may be required relating to re-start of the work (site re-establishment);
• Costs arising from lost productivity during ramp-up;
• The cost of any acceleration under consideration.

We will update our advice as the situation unfolds.

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