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The impact of increased COVID-19 Stage 4 restrictions on Victoria’s construction industry

By TBH Associate Director, Stephen Topp

The introduction of Stage Four COVID-19 restrictions in Victoria has introduced additional questions and unease in the construction industry. Particularly around the contractual mechanisms for dealing with the delay and disruption that appears inevitable to most private sector ‘large scale construction’ projects.

Per the Victorian Government’s advice, the following additional restrictions will apply to the construction industry throughout Stage Four:

  • Large Scale Construction (Any building construction project of more than three storeys (excluding basement)
    • Maximum of 25 per cent of normal employees on site compared to normal operations.
    • Must have High Risk COVID Safe Plan.
    • Must demonstrate not blending shifts and workers can only work at one site during Stage 4
  • Small scale construction (Any building construction project of three storeys or less (excluding basement)
    • Maximum of five workers (including supervisors)
    • Universal COVID Safe Plan
    • Must demonstrate not blending shifts and workers can only work at one site during stage 4
  • State and state civil construction (including time critical new school builds) are exempt from reduction targets but will be required to implement High Risk COVID Safe Plan.

Whilst the legal and contractual circumstances of each project will vary, there are some actions that may be applicable to many project situations.

    1. Confirm your project specific situation per Government advice and ensure appropriate COVID Safe Plan is in place, and seek further advice if necessary
    2. Review the Contract, particularly with regards to delay and disruption qualifying events
    3. Establish the current/planned daily site numbers under previous conditions then establish applicable resource limit per new Government Stage Four advice
    4. Confirm project progress up to now, including the projected completion date if works continued as planned
    5. Apply critical path analysis to determine the current critical path through the works and total float of next most critical paths. Identify the resource trades required to undertake critical and near critical works and the number of resources that would be utilised in a BAU situation
    6. Determine most appropriate allocation of available resources to mitigate delay of completion
    7. Maintain detailed records of progress and resources on a daily basis through this period and use this information to substantiate the impact of COVID-19 restrictions
    8. Consider potential off-site impacts, including reduction in manufacturing or fabrication, and logistics and movement of materials (particularly any impact of state border closures), and delays in receiving permits, inspections, and certifications
    9. Consider alternate delivery strategies including staging and separable portion scope (if applicable) and the cost of progressing in a limited capacity versus the extreme measure of shutting the site down during this period (including demobilisation and re-mobilisation costs)

Whilst the future is uncertain, what is certain is that quality project records will be invaluable in the quantification of the effects of this new challenge.

TBH has a proven track record over the past five decades for independent project advice. TBH can provide an experienced voice in developing a strategy to manage the current situation and substantiate the impact, and resulting entitlement, on your project(s). This is a role TBH has been performing on various large-scale projects throughout the previous COVID-19 restrictions and will continue to aid its clients throughout this difficult period.

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