An Owner/Developer Plan: Construction During COVID-19

March 30, 2020

An Owner/Developer Plan: Construction During COVID-19: As the Coronavirus Disease 2019 (COVID-19) sweeps through our communities, the true impact of this global pandemic is yet to be realized. However, it has sent shockwaves through the world economy and across industries. The construction and real estate industries are no different. Exacerbating the already challenging environment is the inconsistent application and classification of the industries and project types between City, County, State and Federal Authorities. What’s ‘essential vs. non-essential’ and ‘under what working conditions should a jobsite adhere to’ are just some of the questions being raised.

If you are an Owner or Developer, taking care of people and our communities is everyone’s responsibility. Thus, Owners/Developers need to consider how their projects impact the community, and are classified by the various authorities and determine the benefits and costs to continue or delay their projects. Most Governmental Agencies have deemed construction, or at least various types of construction activity, as essential. On March 16th, the President issued the updated Coronavirus Guidance for America that states:

“If you work in a critical infrastructure industry, as defined by the Department of Homeland Security, such as healthcare services and pharmaceutical and food supply, you have a special responsibility to maintain your normal work schedule.”

Although not specifically identified as critical, the guideline is not a federal directive and allows state and local policies to provide more guidance. Currently, most State and Local Agencies appear to deem construction, or at least various types of construction, as essential. According to a recent (March 27th) nationwide survey conducted by the Associated General Contractors of America (AGC), 39% of respondents had an Owner/Developer or Governmental Agency direct them to halt or delay work on projects currently in progress. This represents a 10% increase in just one (1) week. Thus, although construction and real estate development continue, the situation changes rapidly.

This crisis will change each one of us and it is time to plan and anticipate the next steps of each respective project in progress in order to understand the implications of COVID-19.

Challenges for Owners & Developers

Construction and real estate development are already complex. COVID-19 will pose additional challenges for Owners/Developers that need to be measured, evaluated and mitigated. These challenges could include, but are not limited to:

Immediate Actions for Owners/Developers in
Response to COVID-19

We recommend immediately performing the following three (3) actions:

Owners/Developers’ Response Checklist

There are several steps Owners/Developers can do now to mitigate the effects of the pandemic on the cost and time to complete their construction projects.

How Spire Can Help

Here are just a few ways Spire is helping Owners/Developers respond to COVID-19:

The information provided above is general in nature, has been prepared for informational purposes only and does not constitute legal advice. All parties need to evaluate their specific project conditions, contract, local codes and ordinances and contact their attorney or consultant to understand and apply these and other general principles for their project. The information is intended but not guaranteed to be correct, complete, and up-to-date. No representations or warranties are made, express or implied, that this information is correct, complete, or up-to-date.

Copyright © 2020 by Spire Consulting Group, LLC. Worldwide rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a data base or retrieval system, without the prior written permission of Spire Consulting Group, LLC.

(1) A basis is a written documentation that describes how an estimate, schedule, or other plan component was developed and defines the information used in support of development. A basis document commonly includes, but is not limited to, a description of the scope included, methodologies used, references and defining deliverables used, assumptions and exclusions made, clarifications, adjustments, and some indication of the level of uncertainty. (AACE International Recommended Practice No. 10S-90)

(2) Evaluation of projects or investments by comparing the present value or annual value of expected benefits to the present value or annual value of expected costs. 

The content included in this article is for informational purposes only and does not reflect the opinions or recommendations expressed by any individual unless otherwise stated.

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