Coping With Covid In The Construction Industry
The construction industry is (understandably!) full to the brim with unanswered questions concerning all manner of things such as contracts, programme implications, extensions of time and much more.
Over the coming weeks, I'm going to record a series of videos which I hope will help answer the most common questions. Have you got any questions you would like us to answer? Please get in touch and I will do my best to answer them.
Who Should You Notify?
There are various different stakeholders that must be kept notified of site and project issues including Insurers, Building Control, Warranty Providers, Funders/Banks.
Our MD Parm Bhangal explains some of the keys things that need to be communicated to each of these people in this video.
'When asked about what to do during this lockdown period, I will always revert to three things, communication, communication and COMMUNICATION! In the construction industry (and in all businesses!) it is imperative you stay in regular contact with all the key people involved in your projects.'
If you need any further information or advice, or if there is something you would like us to cover please do not hesitate to get in touch.
Communications and Record Keeping
The next video in the 'Coping With Covid In The Construction Industry' series by Parm Bhangal deals with subjects we have alluded to in the past, communication, record-keeping and site protection.
What is good record keeping? examples could include
Meetings (via Zoom)
Emails and letters.
Please watch our video for more details.
Issuing Payment Notices
Video 4 in our 'Coping With Covid In The Construction Industry' series deals with Issuing payment notices.
Regardless of the situation, you still need to issue payment notices or pay-less notices.
Please watch our video for more details on why this is so important and the possible consequences for not issuing the notices.
As always, get in touch if you have any questions you' like Parm to answer.
Extension of Time Claim
How do we put in an extension of time claim? am I permitted to do this and under what clause?
Do we need to accept requests for a time extension?
As you would expect, this is another question we are regularly asked - and the answer varies depending on the type of contract that bounds the project.
In most main forms of JCT contracts, there is a list of relevant events where you can put in an extension of time - unfortunately, Covid-19 isn't one of these!
However, there are two relevant events that a person could call upon - as long as they have not been struck out of the contract!
Minor works contracts are slightly different, NEC contracts are different again and of course, your own personal contracts could again be different.
Parm's video covers all the relevant details you need to know and gives some information about how you should write an extension of time letter.
Every contract is different. If you want further advice or assistance putting together an extension of time claim or reviewing a claim submitted then please do not hesitate to contact us.
Loss and Expense
In a previous video, we discussed an extension of time.
In normal circumstances, an extension of time would come with loss and expense claims.
These are not normal circumstances!
Due to the current Covid-19 pandemic if you request an extension of time under force majeure or a change in legislation there is no entitlement for loss and expense or LAD due to it being a neutral event.
If you have had to re-mobilise, de-mobilise, or have cabins and plant on site and you have to leave the site you may be asking who is going to pay for them?
Every contract is different but if you want further advice or assistance then please do not hesitate to contact me.
Social Distancing On-Site
Here's an Interesting question - how exactly do you keep to government social distancing guidelines whilst you are on a construction site?
Many trades work together or in close proximity to one another, so it does present us with (yet another!) challenge.
As an example, heavy lifting rules - we need to abide by HSE guidelines but how do two people lift something heavy if they need to be closer together than 2m?
We'd really like to hear your thoughts on how you are safely overcoming this particular issue and what strategies you have in place on your sites.
Will My Construction Costs Go Down?
As Quantity Surveyors, Project Managers and Estimators we're often asked about construction costs and with the currently Covid pandemic, people want to know if their construction costs are going to be affected.
We look at this as an issue of economics - supply and demand.
To give an example, currently, there is a shortage of plaster products, and products of this type that would normally sell for £5 are being sold for up to 7 times as much!
This is simply down to insufficient supply.
If products are selling for an inflated price it is to be expected that the cost of your build is going to increase.
What else could happen?
As we come out of isolation, construction projects that would normally have one bricklayer, roofer, electrician, may now hire 4 or 5 in order to get the project back on track, larger companies could take lots of resources, therefore, affecting supply and of course increasing costs.
On the flip side, if large housing companies cannot sell the number of houses that they need to sell, they may pull some of the trades which could then decrease the need for a trade and this may decrease the costs.
Will furloughed staff going back to work after Covid affect the housing market? Will people want to buy houses or improve their current homes?
There are many uncertainties to consider when answering this question. Here are some of our thoughts and ideas.
Responding to Boris Johnson!
We got a mention from Boris!
Millions of people tuned in to the PM's address in anticipation of some much needed good news. What we actually got was a murky 'roadmap' that left many people seeking further clarity on a number of points (Stay alert?)
For those of us working in construction it was great to hear Boris specifically mentioned our industry and in fact, used site workers as an example of a group of people that can return to work.
I recorded the video below in response to the address to give my reaction and a few tips on what I think you should do next.
Contracts In Dispute
A recent article in Construction News suggests that 1-in-4 projects are set to be in contractual dispute and 1-in-25 are already in dispute - news like this hits the Industry hard.
There are some good signs though.... Here's a short video of my thoughts concerning this subject.
Social Distancing On Construction Sites
So just how do you run a construction site whilst adhering to social distancing guidelines?
How do we organise some of the site fundamentals like eating and toilet breaks?
Should we carry out temperature checks before we allow people on-site?
Here are some of my ideas as well as some from our community.
Should Construction Sites Be Open 24hrs?
With many construction projects now severely behind schedule, should building sites be open earlier - and for later? until 9 pm?
Should they be open 24 hrs and what are the benefits of having an 'open all hours' site?
The question of how long should you be able to work on-site is just one of the hundreds that are raised every day by those working In the construction industry.
What are your thoughts on this issue? Here's mine.
Here's an early morning message from our MD Parm Bhangal regarding some decisions we've made about how we make our site visits, and how we're helping lots of our clients with their issues including making their sites compliant with social distancing regulations.
According to Chancellor Rishi Sunak we are going to go into a recession the 'like of which we have never seen before'.
- What does that mean for the construction industry?
- How will this affect spending in the housing market?
- What can we do to adapt to current working conditions?
- Can we learn anything from what happened in 2008?
If you haven't already, now is the time to strategically plan for the future.
Recession Vs Output
'If you fail to plan, you plan to fail'
Since the talk of recession from the government last week, I've been having a really good think about how this could affect our Industry, specifically output.
It is inevitable that output has decreased over the past 8-10 weeks and adapting to a new environment could mean output drops even further!
What is your strategy in recovering your output?
How can you assess your current situation and plan for the future?
Here are my thoughts on what we need to do.
Industry Job Cuts
My research has again led me to the Construction News website and whilst browsing the pages, one particular article caught my eye - and it hit home.
Two big names in our Industry - Ibstock and Forterra have announced job cuts as a result of Coronavirus and the subsequent lockdown.
Whilst this isn't great news, there are things we can do to prevent a similar fate and lessen the impact on our businesses. For me this just reinforces a point that I made in my last video - we must rigorously plan for the future, now.
I recorded this short video to share my tips on how we can better prepare ourselves for the coming 6-12 months.
I'd love to hear your thoughts and feedback, and if you need any help with anything in your construction business right now please dop not hesitate to get in touch.
Do You Want Cheap or Best Value?
Do you want cheap or best value?
I recently received an enquiry from a client who stated that they wanted the 'cheapest quote possible' - I had to ask the client to clarify what they meant.
During the quote gathering process, it is easy to opt for the cheapest quote, but can you be sure that all the quotes you have include the same items?
A good professional tendering process, schedule of works and tendering analysis can help put your mind at rest.
Here are my thoughts on 'Cheap vs Best Value' and how we can help.
Client Win Rate
What's Your Client Win Rate?
A reasonable question for us to be asked - but it's not about our win rate its about our clients' win rate and there are several factors involved that could swing that figure either way.
For example, If you work on lower margins, you could win 1-in-2 or 3, if you work on higher margins it could be 1-in-10 - but much more profitable.
Ask yourself some questions:
- Are you working efficiently in your market?
- Is your sales process optimised?
- Are you buying at the right price?
The are many strategies that construction industry businesses can put in place that help improve your win rate, for more details please feel free to contact me directly.
New From Travis Perkins
News from Travis Perkins - what can we learn?
The press recently published news saying that Travis Perkins will cut 2,500 jobs and close 165 stores.
Their Chief Exec says they are busy but the business hasn't returned to pre-covid levels and may not for some time.
There is always something we can learn from 'bad' news.
We need to understand what is going on in the market - we are in an unnatural situation. Right now business owners need to look at their kpis such as the number of enquiries the business is getting and if they are way off pre-covid levels now, in a month, in two months, you need a strategy to get yourself back to where you need to be.
In construction and property, payment terms seem to have a law of their own!
If you are going to hold money back, do it in the right way - I believe it is fair to pay people on time for what they have done, and it's fair to hold payments in most cases if you have a legitimate reason for doing so and it's mentioned in the project contract.
The unnecessary holding of payment causes more harm than you may think - remember, your relationship capital is very valuable!
All my videos are based on my own experiences and opinions - here' what I think about payments
What do you think? What are your experiences and point of view?
The latest ONS data (don't worry - It will get back to where it needs to be)
The ONS recently announced that, unsurprisingly, construction output was down by 40% in April - what you would expect when going through a worldwide pandemic!?
To get us back to where we were pre-Corona, the output will now need to rise significantly to around 60-65%.
As much as we'd like it to, It's likely that won't happen for some time.
I'll say it again - let's get strategic. Look at the bigger picture.
Now is the time for fine-tuning....oh, and when output increases, will you be ready?
Stats From Trade Bodies
Everyone loves a stat - don't they?
Statistics from Industry trade bodies show that firms are starting to discount their prices in order to try and secure work.
This could mean that projects are less profitable.
It's a strategy that people have been using for years and one that is especially prevalent in property.
Is it the right strategy for you?
The answer depends on many things - some of which i discuss in my video below.
Whats' your opinion? Will you be discounting your products or services?