Negotiating Impact Costs of Covid-19

Contractors continue to struggle with some buyers over the additional safety and delay costs directly related to COVID-19. 

OGCA and the Construction and Design Alliance of Ontario (CDAO) have had discussions with the Ontario Government, Infrastructure Ontario and Metrolinx about providing clarity to force majeure provisions to include costs related to COVID-19, including safety provisions, supply chain delays and reduced productivity. We are encouraged that this will be forthcoming. Until this occurs, members must negotiate with owners to find reasonable solutions.

The Ottawa Construction Association has delivered the following letter to buyers to appeal for cooperation:

OPEN LETTER TO BUYERS

Some seven months have passed since the mid-March start point of COVID-19 pandemic and the imposition of many new safety standards and operational protocols across the industry.

Industry has done a tremendous job pivoting to deal with COVID-19 if one considers the very low incidence of positive tests in relation to the size of our Ottawa construction workforce.

Contractors and the workforce adopted within days/weeks new site safety management plans along with significant investments in site access controls, more personal protective equipment, upgrades in the quality and quantity of washing and toilet facilities, more cleaning, more tools and equipment, site modifications and signage, and additional trailers, to name but a few.

The early phase of the pandemic was likely the most challenging for contractors and our workers as there was a lack of scientific knowledge of COVID-19, which led to fear and anxiety. Absenteeism was not uncommon and for those on-site, productivity dropped as a result of both the new safety protocols and staffing challenges.

Now, seven months later, we know a lot more about the virus, we have adapted to the new protocols and there is less fear and anxiety among the workforce.

Are we back to the same productivity levels that existed pre-COVID? For the majority, the answer would be NO. It all depends on the type of construction – is it a building project with multiple trades with space restrictions versus an open field with one or two contractors involved in installing services?

What industry is telling the OCA is that there has been very little recognition to-date of the costs and loss of productivity by the BUYERS of construction services.

The OCA Board of Directors wishes to pass a message to all BUYERS who may not be convinced that these are real costs to be fair – to be open to negotiation of impact costs due to COVID-19 with your contractor and acknowledge that the risks associated with the impacts of the pandemic were likely not assumed by your contractor which may expose you to a higher amount of claims should you choose not to negotiate those impact costs.