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impacts associated with the COVID-19 crisis during the contract negotiation. Such clauses could address issues such as time extensions or additional costs associated with price increases, delays caused by unavailability of labor or material, and/or delays or impacts caused by owner- or government-directed shutdowns or suspensions. 3. How do I protect myself regarding active projects that are already experiencing impacts and/or delays or that are likely to experience future impacts and/or delays? If you have not done so already, I strongly encourage you to act now to protect your legal positions. Most contracts have notice and claims provisions tied to knowledge of specific events. If you are on a project and already know of COVID-19-related impacts and/or delays or are aware of potential impacts and/or delays, then the time to protect your legal interests is now.
From our vantage point, the analysis for every project is as follows.
A. Review language of the contract including force majeure clauses that, depending on the circumstance, could address conditions such as pandemics. B. Review language of the contract that addresses safety hazards and the rights and responsibilities each party has when such safety hazards are encountered.
the additional time needed, and including the approximate additional costs that might be involved. The use of "TBD (to be determined)" or "rough order of magnitude" pricing can also be used as necessary. A revision of the change order request can be submitted later as additional facts are developed to support the requested change. It will be very important to separately track additional costs and time associated with the impact and/or delay to substantiate the monies and/or days sought in the change order request. Finally, all the above efforts are at risk if your rights are waived in a lien release. It is critical to analyze lien releases and understand what is being released in that document and, if pending change orders or claims are included in the release, to carve out those pending change orders or claims and to attach a pending change order/claim log to the release to protect your rights with respect to these unresolved change orders and/or claims.
C. Identify required notices and deadlines for notices and be sure to strictly comply with those notice requirements.
D. Identify and strictly comply with the specified procedures you must take in order to seek additional time and/or compensation through the change order process.
E. Submit proposed change orders to protect your right to receive additional time and/or compensation.
F. Review and revise lien releases moving forward to carve out pending change orders and claims from lien releases.
Every contract is different, but consideration must be given as to whether, how, and when another party needs to be notified of a potential extension of time and/or a request for additional compensation if COVID-19 potentially impacts the construction schedule. After reviewing the applicable contract language and issuing the appropriate notices, if applicable to the specific contract and/ or project, I generally recommend the submission of proposed change orders and/or claims in accordance with the contract language. In short, if necessary, a proposed change order or claim should be submitted with an appropriate narrative outlining the situation, citing the applicable contract provisions should impacts and/or delays arise, providing your best estimates for
Please understand the above represents general knowledge and is not intended as legal advice on any specific matter. If you have any questions, please feel free to call me at (410) 842-0145 . Be well and stay safe.
-Jeremy Wyatt
jwyatt@harrisonlawgroup.com
www.HarrisonLawGroup.com
(410) 832-0000
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