Post-Pandemic Construction Projects

“Long Covid” is an expression that has come to signify the negative impact on an individual long after the initial symptoms of a COVID-19 infection have been treated and overcome. The expression Long Covid could be expanded to include the post-pandemic negative impacts on School District capital construction projects. In part due to COVID-19, supply chains have been disrupted, delivery of critical equipment and items have been delayed, labor availability has been compromised, and bids are well in excess of estimated project costs. Making the situation worse, the federal government will pump billions of dollars into the construction marketplace which will exacerbate the impacts of Construction Long Covid on School Districts. When key resources are already in short supply, adding enormous amounts of liquidity to the marketplace without increasing the resources available to absorb it, leads to rising prices and scarcity.

Effective and efficient project planning and execution will be different in the post-pandemic era. Here are tips to deal with post-pandemic capital construction projects.

1. Consider project timeline and bidding climate. During the project planning phase consider the project timeline and the benefit of postponing or reducing the scope of the project. As you define the scope of the project use bid alternates to break it into discrete components.
2. Piggyback, state contracts, and sole source. These may be of assistance to address supply chain issues. Under the right circumstances, using the sole source exception to competitive bidding can also be very helpful. In the post-pandemic era, every option and avenue will need to be explored.
3. Assemble and utilize your Project Team. We have always recommended that school districts hold meetings with all of your professionals Architect, Construction Manager, Municipal Advisor, Bond Counsel, Insurance Advisor and Legal Counsel to plan your project. However, under challenging circumstances (for example, projects being over budget or contractors demanding change orders to address supply chain issues) we recommend that you set up a meeting or zoom with your team to ensure that the school district is analyzing the issue with each professional consultant’s perspective. This wholistic approach often leads to better solutions for the school district.
4. Use of Energy Performance Contract. Given the challenges you face in connection with a standard capital project in the post-pandemic era, your school district may want to consider an energy performance improvement project to complete work outside of the referendum amount. The school district may solicit and negotiate with energy services companies without following a formal competitive bidding process and voter approval of the project is not required, although obtaining voter approval would provide NYS building aid benefits. Additionally, an energy performance improvement project results in guaranteed savings that will provide benefits for many years after the construction phase of the project. We can guide you through the RFP and contracting process and coordination of the contracts with your capital project.
5. Analyze and Enforce Your Contractual Rights. If you have a Project underway, you will need to manage it more aggressively than you have in the past. Be sure the contractors are required to comply with all contractual requirements and do not simply agree to demands without knowing your legal rights.
6. Require your Architectural Team to identify and Approve Critical Path Submittals. Inability to obtain critical items of equipment or supplies in a timely fashion has always been a potential source of project delay, disruption, and finger pointing. If you take away only a single suggestion from this article, this is it. Please set up a meeting with your architect and make this request of them as soon as possible. You should request the Construction Manager to assist in requiring contractors to order and store (preferably on site) these critical path materials to keep your project on schedule.
7. Change Orders and Construction Change Directives are a normal part of any capital construction project. Unanticipated work is to be expected. However, such Changes will require even greater scrutiny and oversight in the current environment. Please ask the Architect and Construction manager to analyze and advise if Change Orders or Change Directives will have an impact on your project schedule. Please be certain that Change Orders reflect such changes and that the overall scheduled completion date can still be accomplished.
8. Timely analysis and processing of claims from contractors. Contractors’ claims for additional money and extensions of the date for Substantial Completion can also be a source of conflict, project delay, disruption, and finger pointing. The number of contractor claims and the cost will certainly increase in the current environment. Contractors may be looking for ways to generate additional revenue from the project. Some claims will be valid, but not all. Please contact our office if you receive a claim so we can analyze and advise regarding response.
9. Finally, if you’re at the bidding stage for a Project and you receive bids well in excess of the Project’s authorized amount, don’t hesitate to call to discuss options to salvage the Project.

If you have any questions, please call Dave Tinker, Jeff Lewis, or Joe Shields to discuss your issues.