Legal Considerations for Challenging Times
Tom Olson, Olson Construction Law, sent the following information to clients and others. ISCP is sharing with all members and others in the concrete pavement industry. Special thanks to Tom for sharing this important and timely information.
At this unprecedented time, construction businesses must evaluate their contractual rights and obligations in order to mitigate the impact of the COVID-19 pandemic. With regard to any delays, suspensions of work, and/or terminations that occur as a result of the outbreak, the following is recommended:
Delays—If your work has or will be delayed as a result of the outbreak, review your contract to determine whether and when you are required to give formal notice of delay, as well as any corresponding documentation related to the impact of the delay (i.e. schedule updates, cost information, notice of claim, etc.).
Suspensions of Work—If the owner/engineer suspends any work you are contracted to perform as a result of the outbreak, review your contract to determine what you need to do in order to preserve your right to any corresponding increases in contract price or contract time. Many contracts require you to provide your requested contract adjustment within a set period of day after you receive notice to resume work.
Termination—If any of your work is terminated as a result of the outbreak, you are most likely entitled to payment for any completed and accepted work prior to the date of termination (including overhead and profit or OH&P, any expenses you incurred prior to the date of termination (including OH&P), and any other expenses directly attributable to the termination. While you are unlikely to recover loss of anticipated overhead, profits or revenue, make sure you review your contracts to ensure you provide any required cost proposals, back-up documentation, etc. as required by the contract.
Force Majeure—Some contracts also contain what is known as a “force majeure” clause. This type of clause relieves one or both sides of their obligations if they are unable to perform due to some massive and unforeseen event beyond their control. Classic examples include: fires, earthquakes, floods or wars. Review your contracts to determine if any such language applies to the current COVID-19 pandemic, whether any notice provisions apply, and whether your contracts may be impacted.
To efficiently navigate this ever-evolving situation, please remain in close communication with the owner/engineer to help ensure everyone’s expectations are in line with one another. However your work is ultimately impacted by COVID-19, it is important for you to remain proactive and investigate your contractual rights and responsibilities sooner rather than later. And, for any future work you plan to bid during the outbreak, make sure there is written clarification regarding the potential impacts of COVID-19 before you submit your bid. Since these future contracts will be entered into after the pandemic became “known,” you may be assuming responsibility for any related delays or disruptions to your work.
For additional information or questions, please contact:
Thomas R. Olson, Olson Construction Law, P.C. and ACPA Member
1898 Livingston Avenue | West Saint Paul, MN | 55118
Phone: 651.298.9884 | Website: olsonconstructionlaw.com
Original copy from the American Concrete Pavement Association (ACPA).
AHUA: Congress in Overdrive
to Pass Virus-Related Stimulus & is Passed
According to the American Highway Users Alliance (AHUA), this has been an unprecedented time in American history. The spread of coronavirus around the globe has quickly become a life-changing experience for every American and a major disruptor to our economy. The U.S. Congress worked overtime to pass Coronavirus-related stimulus packages, and reported that lawmakers passed the first $8 Billion stimulus package in the beginning of March, 2020. The House passed revised text of a 2nd stimulus package, H.R. 6201, Monday night, March 16th. The approximately $100 Billion package is for expanding access to free testing, providing $1 Billion in food aid, and extending sick leave benefits to vulnerable Americans. On Monday, March 16, John Barrasso, (R-WY) Senate EPW Chairman said he would like to see parts of America’s Transportation Infrastructure Act of 2019 (S. 2302) included in an economic relief package responding to the coronavirus, stating, “It’s a formula model where 90 percent of the money goes out by formula to all the states, and it increases the amount that they had from previous years.”
Senator Shelby (R-AL), Chairman of the Senate Appropriations Committee, made a similar pitch to include infrastructure in a stimulus package. By Tuesday, March 17, there were reports the Administration and Senate Republicans are considering modifying the 2nd House stimulus package (H.R. 6201) to create a massive bill.
According to a Forbes article on March 25, 2020, COVID-19 is the official name for the infectious disease caused by the most recently discovered coronavirus. Congress moved quickly and on March 27, 2020, the House approved this bill: Coronavirus Stimulus Bill / “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act”—bigger than the original Senate proposal but smaller than the subsequent House proposal.
The bill is intended to provide direct economic relief in response to the COVID-19 pandemic. The measure passed late Wednesday, March 25, 2020 by a vote of 96-0: Senators Romney (R-UT), Thune (R-SD), Paul (R-KY), and Lee (R-AZ) did not vote.
Global cases of Coronavirus:
As of Tuesday, March 31, 2020, 10:08 pm EST US time
Total: 858,785
Deaths: 42,151
Recovered: 178,119
AHUA Subtitle and some copy from ACPA article titled “AHUA: Congress in Overdrive to Pass Virus-Related Stimulus”: www.acpa.org/20949-2/
For all details and the highlights of the bill according to the Forbes article titled “Senate Passes Coronavirus Stimulus Bill: Here’s What The Relief Looks Like”, please go to: https://www.forbes.com/sites/kellyphillipserb/2020/03/25/senate-passes-coronavirus-stimulus-bill-house-expected-to-follow-suit/#2e641a64475b
For the latest AHUA updates on the Coronavirus, please go to the AHUA website: www.highways.org
Home image type by Amy M. Dean and map from Wikipedia: www.en.wikipedia.org/wiki/File:World_blank_map_countries.PNG