ciated with material price increases. This type of contractual unity at the pre-construction phase only strength- ens the trust between the parties making future hurdles, price-related or not, even easier to overcome. The pandemic has changed the way almost every business oper- ates. It is fair to expect at least a few amendments to construction con- tracts. Most contracts already have what is called a force majeure clause that protects the contractor from penalties incurred by any unantici- pated delays. For example, if a torna- do touches down on the jobsite and destroys a portion of the framing and causes significant water intrusion, then repairs will have to be made which will delay the project beyond the original completion date. This clause would come into effect and protect the contractor from having to pay liquidated damages to the owner. Typically, this clause includes very specific language identifying spe - cific events where the clause would come into effect. This language could cover anything from natural disasters like wildfires, floods, and earthquakes or societal impacts like war, civil unrest, or labor strikes. In the current market it may be wise to broaden the language in this clause to include a wider range of pandem- ic- related delays. If a subcontractor is scheduled to complete the rough electrical wiring next week, but the general contractor receives notice that the sub and all his laborers are sick with COVID-19, then this will cause a significant delay to the rest of the project timeline. Before the pandemic, there was not verbiage in typical construction contracts to protect the general contractor from unanticipated delays like this. There is a myriad of other pandemic related impacts that could delay a project in today’s market.
Labor productivity has become a real issue between employee illness, lack of available childcare for employee families, state mandates for social distancing, and even acquiring cer- tain building materials in a timely manner due to global manufacturing shutdowns. Again, to show this kind of thoughtfulness and consideration as an owner within the construction contract is not typical, but given the current market it seems to be the most efficient way to achieve the end goal of a successful build. A simple display of unity can go a long way. Building this trust between a contractor and owner or develop- er can lead to further partnerships down the road. A developer who aims to build a subdivision of homes may come back to the contractor who showed him good faith and shared the savings on a material price drop
from a project years before. Building these relationships within the con- struction industry leads to less stress and barriers within developments down the road. It all begins within the pre-construction process where desperate times call for a reimag- ining of the way business is typically done. Unity within the construction contract may be one of the few bright spots introduced into the construc- tion industry by the pandemic. •
Taylor Miller is Project Specialist at Owner Builder Advisors (OBA), a company offering a full suite of construction monitoring and risk
management services. A former commercial Real Estate Appraiser and Construction Analyst, he assists OBA clients in navigating the ground-up development process. Taylor is a new father who enjoys spending time with his family and taking long bike rides.
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