If you’ve bid on and won a project, it’s assumed you understand the risks, including delayed delivery of materials and equipment. As the pandemic proved, you can’t always factor delay risks into a bid. But you can’t bid without some guarantee that you can deliver the project on time and within budget. Contract-wise, you’ve assumed responsibility.
The Devil’s in the (Contract Details) For Construction Business Projects
A 2020 report on worldwide Construction Claims states the global average value of a construction delay dispute to be a staggering US$30.7 million… The report also indicates that the average dispute took 15 months to reconcile. –Plan Academy
Types of delays affecting your contract:
- Concurrent delays – Two or more parties involved
- Critical delays – Impact project delivery date
- Excusable delays – Outside of the contractor’s control
- Compensable excusable delays – Caused by the owner or the owner’s team. The contractor may receive more time and financial compensation.
- Noncompensible excusable delays – Beyond anyone’s control (Force majeure)
- Non-critical delays – Little to no impact
- Non-excusable delays – Occurred as a result of something the contractor should have been able to control
Most contracts state the contractor has an amount of time to report a delay. This time should be used to mitigate the delay; seek alternative materials or suppliers. Construction business contractors are legally required to try to mitigate every delay.
Quinn Murphy, an attorney with Sandberg Phoenix in St. Louis, said anyone claiming delays due to the pandemic, “….particularly those who entered into a contract after it became widespread in March 2020, will have to prove that the delay was directly related to the pandemic.”
If you signed a contract for the construction business after the pandemic was firmly in place, you may have a hard time claiming delays due to COVID-19. “They’re going to have a really hard time alleging the pandemic is an excuse,” Murphy concluded.
Never sign a contract for a large project without legal support. But you can’t bid on and win contracts if you don’t know your demographics. Contact Construction Monitor with questions about business leads for your company.