COVID-19 has created immense job insecurity across many industries, especially in construction. Projects continue in areas of the country where construction is considered an essential service, while elsewhere, projects have ground to a halt as workers have been asked to stay home.
With additional variables in working conditions (e.g., social distancing on worksites) and the disruption of supply chains, it’s difficult for employers to know how to schedule projects and quote materials.
If you’re a contractor who’s continuing to work during this pandemic, there are a few tactics you can employ to keep moving forward.
Schedule for Safety
Depending on what state you live and work in, your area of construction may not be considered essential. Therefore, when it comes to scheduling projects, check your state’s guidelines and enactments to determine if you need to alter timelines or postpone projects.
If your business is able to continue working, it’s important to follow social distancing guidelines such as maintaining six feet of distance between all employees and wearing proper protective gear. Though it’s challenging for a jobsite to maintain these standards when scheduling employees, there are a few policies that can help keep you and your team safe. These include, but are not limited to:
- Staggering lunches and breaks.
- Moving professional personnel to remote service.
- Using Facetime, Google Duo, or similar free messaging apps to communicate when visuals are necessary
- Taking advantage of any project management software that may help you maintain productivity from a distance.
If it is impossible to avoid others at all times while on the job, be sure to track activities that involve unavoidable contact as well as the individuals involved. Schedule those same groups together to minimize the risk of spreading the virus. One or more of these groups can work on offsite projects to keep production moving onsite.
Quote for Efficiency
The COVID-19 pandemic not only impacts worker safety but the ability to obtain certain basic items to get jobs done. Masks and respirators for building and construction are in short supply. Fasteners and other construction items typically sourced from China are limited, experiencing shipping delays, or subject to price gouging. In this environment, it’s best to get in and out of jobs as quickly as you can.
Make sure you are as detailed and accurate as possible in the take-off process, but you may want to avoid quotes with extended project timelines where your costs may vary. You can also build in ‘escalators’ that allow you to modify pricing in case of product shortages. It’s important to also factor in ways to protect yourself from contracted jobs if your company suffers a labor shortage due to illness or work stoppages, such as flexible timelines or force majeure clauses.
In volatile times, relying on unit cost estimating guides to quote jobs can be a recipe for disaster. While unit cost estimating is often faster for ballpark estimates, it is not always accurate and may be a poor choice due to current pricing variables.
Working on quotes directly with your supplier, distributor, or manufacturer that you buy from is one way to mitigate risk. They can often help you anticipate where shortages or cost increases might occur and give you guidance on how to quote. They may also be willing to lock in quoted pricing for short periods of time to give you the confidence you need to quote a job.
Know Your Options
While the industry has yet to see a significant rise in building costs due to the pandemic, COVID-19 could affect the price of labor and materials. Principia, a provider of business insights to the building materials and business construction industry, recently reported that excluding personal protective equipment (PPE) and certain items from China (e.g. fasteners), most distributors are not experiencing extreme material shortages..
If you need to make new cost estimates during the crisis, it’s best to turn to trusted resources that provide the latest assessments. For example, turn to regional economic reports published by local government and industry economists such as the Associated General Contractors of America (AGC). The Engineering News Record (ENR) Construction Cost Index and the Building Cost Index are exceptional and longstanding resources with information on the costs going into your projects.
If major costs are due to incur and you are unable to pay, builder’s risk insurance can protect you from losing money during unusual circumstances. Look for escalation clauses, which specify who in the contract will bear the burden of increased costs in a contract between a client, subcontractor, or both. These allow for an automatic increase in coverage limits should the final contract value exceed a stated percentage versus the original amount (typically 5 or 10 percent). However, as your insurance provider continues to update you on foreseeable costs, the coverage limit may adjust.
While resolving scheduling issues and reworking timelines, the most important aspects of a smooth transition are empathy, communication, and flexibility. Many workers are concerned with the risks of spreading or contracting the virus if they work, but can’t afford not to work.
Reach out to any individuals you are unable to employ, and communicate the relief and benefit options available to them through various federal, state, and local relief efforts. Many unions, for example, are extending benefits to those unable to work due to COVID-19. The International Union of Painters and Allied Trades (IUPAT) temporarily altered the eligibility terms of its program for participants facing job loss.
For workers you can schedule, it’s important to be flexible. With schools out, many people are figuring out how to manage childcare in addition to other duties. Being willing to work and advocate for your employees will encourage them to work for you through this difficult time.