From the time when COVID-19 has been declared as a global pandemic by the World Health Organization on March 11, 2020, most countries took strict measures to control the outbreak. These measures, like social distancing and closing non-essential businesses impacted construction projects directly or indirectly. Due to the Government declaration of emergency in some regions, several projects got shut down while others are still running but facing delays in delivery of materials, labour shortage, and increased cost. So, these conditions caused many projects to experience time and cost overrun.
Contractors and employers need to understand their contractual rights and act accordingly. It is vital to use applicable contractual clause(s) when making claims for additional time and/or costs. For instance, although the ‘Force Majeure’ clause provides an extension of time entitlement for contractors, it will not give entitlement for the recovery of additional costs. However, some other contractual clauses could potentially offer eligibility for both time and cost.
It should be considered that although a contract may give potential entitlements, it would remain an obligation of the contractor to demonstrate the claimed event caused delay and/or additional costs in the project. In order to do this, contractors will need to show the impacts of the event on the critical path of the project along with the incurred additional costs in their claim.
The dispute experts encounter this type of time, and financial loses routinely and can address them using standard or most common accepted quantification techniques.
PM ERA Inc. experts with extensive experience in dealing with such complex delay and impact analysis, are here to assist you and your team with analytical challenges to both times and cost-related issues of COVID-19.
