COVID-19 & the Construction Industry

Thoughtware Alert Mar 19, 2020
Two construction workers looking at a blueprint

The hourly changes occurring across the U.S. due to coronavirus disease 2019 (COVID-19) are causing construction companies to react quickly to employee needs and safety, job site safety and security and communications with owners, trade partners and other industry-related parties.

In Boston, the mayor suspended all nonessential construction activity. San Francisco implemented a shelter-in-place policy that will directly affect construction. The federal government suggests limiting meetings to no more than 10 individuals. Some state and local governments are prohibiting public access to restaurants and bars, closing schools and limiting public gatherings, all of which can affect your employees, partners and projects.

BKD works with the Construction Financial Management Association (CFMA) to help facilitate its peer group program. The CFMA Peer Group program has more than 220 construction financial managers representing more than 200 construction companies nationwide. Some of the best practices and tactics shared over the past few days include:

Internal Communications

Helping your employees understand COVID-19’s effect on their job and best practices to limit risks is the key to successfully navigating the coming months. Some examples include:

  • A clearly defined internal communication plan
    • Dedicate a company area on your intranet for Q&A relative to the virus
    • Provide regular communication and updates from company leadership
    • Where appropriate, consider your work-from-home policy
      • Understand how your technology is affected
      • Be diligent on technology risk management/cybersecurity, as there are already instances of fraudulent emails, etc.
    • Consider implementing health screenings at company locations
    • Help employees understand what social distancing means at work and home
    • Help employees understand health insurance coverages
    • If you operate with labor agreements, include the appropriate unions/associations in your communication plan
  • Any revisions to company travel policies should be detailed for employees, such as:
    • Policy for travel already booked
    • Policy for nonbusiness-related travel
    • Waivers of travel policy need senior management’s approval
    • Company policy for mandatory quarantine based on travel location
  • Communicate company plans for paid time off/salary continuation
  • Job site changes
    • Your safety and risk management teams should look at each active job site and evaluate appropriate changes to limit potential exposure to the virus
    • Consider implementing job site health screening
    • Evaluate having daily meetings at job sites in light of the suggested limits on public gatherings
    • Have clear policies on what to do if someone exhibits virus symptoms or tests positive for the virus
    • Implement a communication plan for subcontractors and trade partners
      • All individuals on the job site should understand the policies
      • Properly securing the job site will be important to limit individual access to the area
      • For materials and supplies delivered to the job site, proper plans approval and handling should be in place
    • Provide mental health assistance for employees
      • Proactive communication with your employees, subcontractors and trade partners related to mental health will be important. Employee stress levels over potential loss of earnings, a sick family member, housing and caring for children or others will be very high. There are many mental health resources available for those in construction, including the Construction Industry Alliance for Suicide Prevention

External Communications

The construction industry’s nature dictates that each contractor has multiple organizations outside of the company that are critical to the company’s success, and COVID-19 may affect many of these organizations. It will be important to have a well-prepared external communication plan with:

  • Your bank and other lending institutions (equipment manufacturers, leasing companies, etc.)
    • Inform them of your action plan
    • Understand the terms and conditions in all your agreements
    • Evaluate terminating
  • Your surety broker and underwriter
    • Assess your action plan for job sites
    • Understand the effect of potential job site shutdowns
    • Communicate your plans for subcontractors and trade partners
  • Other insurance coverages
    • There are some indications that if someone contracts the virus while performing job duties, it could be deemed a reportable incident for the Occupational Safety and Health Administration and workers' compensation
    • Evaluate health insurance coverages
  • Owners and developers
    • Clearly communicating your action plans is critical
    • Understand your contracts’ terms and conditions
      • Liquidated damages clauses
      • Shutdown of job sites—security, insurance risks and costs
    • Understand a project’s funding sources—don’t assume you don’t have any payment risk

It’s important for each of your organizations to develop and coordinate your action plan with your stakeholders—employees, owners, subcontractors and trade partners and companies you work with. As plans evolve and change, we will continue to share best practices and tactics to help guide you. Visit our COVID-19 Resource Center for more information. If you have questions, reach out to your BKD Trusted Advisor™ or use the Contact Us form below.

Kate & Ben — How can we help you? Contact Us!

How can we help you?