Nearly 18 months ago as the impacts of COVID were just starting to appear, many in the construction industry were learning for the first time about contractual terms like force majeure and excusable delays. Fortunately in central Ohio, a tsunami of claims between owners and contractors for the additional costs of those delays has yet to occur, likely because much of the construction industry continued on during the stay-at-home order.
Unfortunately, the impacts of COVID continue. The recent full authorization by the FDA of the Pfizer vaccine has resulted in more companies and institutions mandating vaccinations for its own employees. While there could be a forthcoming legislative response on a state-by-state basis, it should be expected that these mandates in central Ohio will remain for the foreseeable future. With these mandates staying in effect, it is expected that companies and institutions will soon require proof or “certification” of vaccination from those contractors with an onsite workforce. The Federal Government issued a Certification of Vaccination Form in early August for onsite contractors that enter a federal building or federally controlled indoor worksite and the failure to submit the certification may be preclude entry.
Putting aside the labor and employment issues that may arise from these mandates, the impact of the full vaccine approval on construction projects will likely vary based on a multitude of factors. With regard to projects that impose a proof of vaccine requirement for the onsite workforce after construction has started, the party responsible for any additional time or costs will largely be determined by the terms of the contract. Accordingly, contractors and subcontractors must review the contract’s notice provisions and timely inform the owner in writing if and when it becomes apparent that the new proof of vaccine requirement will either cause a delay or additional costs. The already tight labor market combined with a proof of vaccination requirement further increases the risk that the project will not be staffed as originally expected, thereby causing a combination of delays and additional costs. Contractors and subcontractors looking to either shield themselves or transfer those consequences back on to the owner need to comply with the contract’s notice provision; otherwise, they could waive any defense to a delay or right to additional compensation.
On future projects that are not in contract, owners can elect to include a proof of vaccination requirement in the contract terms, but at the same time should account for the added cost and time in their respective construction budgets and schedules. Depending on how these terms are drafted, contractors and subcontractors that agree to terms requiring proof of a vaccinated workforce will likely have little or no recourse if they are unable to sufficiently staff the project, thereby causing a delay.
The effects of COVID are not going away anytime soon and society will continue to grapple with the various issues. Going forward, those involved in the early planning stages of a project are encouraged to evaluate the risk of COVID exposure on a targeted basis that realistically balances the exposure risks with the possible costs and time impacts. Projects limited to exterior roadway, utility, and site work construction should be evaluated differently than interior renovation projects of an occupied facility when it comes to COVID. At the same time, contractors and subcontractors should start preparing for projects that require proof of a vaccinated workforce by first reviewing their current employment policies with a trusted advisor and structuring those policies to best meet the company’s goals. One option to consider is instituting incentives for vaccination. Additionally, contractors and subcontractors should be prepared to comply with a project’s vaccine requirement or elect to pass on that project.
