By Tricia Kagerer, CPCU, CSP, ARM, CRIS
As an “essential business,” the construction industry is expected to keep building. Every construction project begins with a contract between the owner and the general contractor. Contractors are held to all aspects of that agreement. Most contracts have provisions related to delays. If the contractor does not meet the schedule and turn the job over on time, they are in breach of contract, which can trigger delay penalties such as consequential or liquidated damages. The only way these penalties are void is if an owner or a local, state, or national party decides to shut down construction. This is called force majeure, which is a contractual defense that allows a party to suspend or discontinue performance of its contractual obligations under specific circumstances.
Over the course of the last few weeks, I have been asked on numerous occasions, “Why don’t you just shut down for a few weeks?” The answer is clear. We can’t. As an essential business, we must keep going! There are numerous issues related with shutting down construction sites that create hidden risks that people may not realize. Abandoned projects create major security risks. A new project with an open trench is an attractive nuisance to the community and invites opportunities for bodily injury, property damage, vandalism, and theft. Speaking of theft…
TOILET PAPER LOCKDOWN
I never expected to have to plan for simple things we take for granted in everyday life, like toilet paper. In risk management, theft on construction projects is an unfortunate common occurrence. Supplies, tools, and even equipment sometimes vanish in the night. I never thought I would be working on a toilet paper-theft prevention plan. Toilet paper is vanishing from porta potties as quickly as it vanished from Costco Shelves. And the shortage is impacting our external supply partners. We are required to provide the necessary facilities and paper, but what can we do if the toilet paper is stolen? We have the same issue with hand sanitizer. A creative safety manager devised a way to lock down the hand sanitizer. He built hand sanitizer stations out of wood and wrapped the containers with metal banding.
Risk and legal construction professionals are scrambling to review both upstream and downstream contracts to determine how best to manage the everchanging COVID-19 environment. Some cities and states have required construction shutdowns but provided little guidance as to how to protect and resolve these issues in the future. The AGC (www.agc.org) and IRMI (International Risk Management Institute, www.irmi.com) provide sage advice that every risk manager and legal professional needs to review and understand. The implications are endless but crucial to business continuity.
About the author:
Tricia Kagerer has more than 20 years of construction risk management and safety experience working with contractors across the United States. She is an expert in risk and safety management, leadership, culture, and performance excellence. Kagerer is currently the EVP of risk management for Jordan Foster Construction, a large diverse Texas-based general contractor. Tricia rose to the executive level ranks of the historically male dominated construction industry to find her self in a lonely place as the only women in the room. Her mission in life is to now change that dynamic by raising the standard of leadership to empower organizations to create better leaders and ultimately create healthy work environments that reduce risk, empower the future generations and celebrate diversity of all people. For more, visit www.triciakagerer.com.
Modern Contractor Solutions, April 2020
Did you enjoy this article?
Subscribe to the FREE Digital Edition of Modern Contractor Solutions magazine.