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Coronavirus impact on the contractuel finish date

5 replies [Last post]
Abderrahim OUBDI
User offline. Last seen 3 days 21 hours ago. Offline
Joined: 19 Jan 2020
Posts: 11

Hello,

As you know the coronavirus has been declared as a pendemic. This will affect most of construction projects and will delay the project finish date.

the question is: How can we evaluate the amount of days to entitle to the contractor. Are we going to insert the activity regarding coronovirus in the last revised baseline and then see the effect on the project finish date? or we do this exercice on the last updated schedule ( but we might have concurrent delay, so it we be difficult to identify the only effect of coronovirus)

Replies

Patrick Weaver
User offline. Last seen 6 days 6 hours ago. Offline
Joined: 18 Jan 2001
Posts: 276
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Most contracts have a 'Force Majeure' clause that allows the contract to be terminated or suspended. The coronavirus by itself is unlikely to trigger the clause, but if there is a government ordered shutdown this action typically will allow the clause to be used.

'Force Majeure' allows a complete re-negotiation if both parties so-choose or a termination (so use with care).

Otherwise, you should be able to claim non-compensateable delays for events beyond the control of the contractor.

The key is taking a close look at your contract, considering the options, and then negotiating with your client - independent / legal advice is strongly recommended.

Once you have a plan to deal with the issue some of the other ideas may be useful.  If you are shut down for a few days (eg, a 7-day quarantine period to clean the site after a case is identified on-site) the ‘holiday' option suggested by Zoltan works.  However, as we move forward substantial disruptions to supply chains are likely which would need a re-frame of the whole plan. 

For most projects its too early to tell how things will turn out so re-planning needs to wait…..  What will be invaluable is really detailed progress and actual information on a daily basis identifying what is achieved and what is held up or disrupted. This will help with a claim, or a re-negotiation or a re-plan depending on what occurs.

For more on project controls see: https://mosaicprojects.com.au/PMKI-SCH.php

Zoltan Palffy
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Joined: 13 Jul 2009
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glad I could help 

Abderrahim OUBDI
User offline. Last seen 3 days 21 hours ago. Offline
Joined: 19 Jan 2020
Posts: 11

Very clever way to see the impact of the pandemic

Thanks ALL

Update, The client has officially shut down the site until further notice

Zoltan Palffy
User offline. Last seen 23 hours 22 min ago. Offline
Joined: 13 Jul 2009
Posts: 2620
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one way is to modify the calendars and make the days that the project is shutdown as non working days. This means that no work will be perfomed during these days and will push the work to the right accordings.

Update the project to get a current status then make the calendar non workng days for the period of the shutdown

The dealy can be categroized as a non compensable excuseable delay meaning additional time will be granted but no additional costs becuase the delay was not caused by the owners or the contractor.

when the delay is over you may have to add ramp up time ti get your manpower, material and equipment back to the same level it was during the shutdown. Also if any procurment items were delayed due to the shutdown you will have ot add that inot the schedule. ie. delivery of steel the whole process of re-starting a steel mill or a new ordering is now in place. You lost your palce in line because your site was shut down.  

Alexandre Faulx-B...
User offline. Last seen 23 hours 17 min ago. Offline
Joined: 20 Jan 2003
Posts: 1285

Hello Abderrahim,

Maybe you would first of all negotiate the postponing of the contractual delivery date with the client ?

Then, calculate the duration increase ratio of the activities due to the smaller availability of the resources, make a copy of this "new" project and save a new reference.

Maybe the contract should be revised?

Alexandre