As many construction projects are being canceled by orders of different federals states, some projects are being canceled by investors and project owners due to financial uncertainties. However, more than 50% of construction projects in the US are moving forward. How are these firms managing potential construction costs during the COVID-19 crisis?
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Issues with Supply Chain and Late Deliveries During COVID-19
One of the biggest problems in the construction since the beginning of the Coronavirus crisis is the overall shortage of materials and supplies. Since the supply chain is experiencing issues, construction firms are faced with delays and thus have to put up with late deliveries. Late deliveries mean that the overall construction can take more time, which imposes costs on the budget of construction firms. Some contracts may provide financial relief through force majeure clause, so construction firms can delay deliveries and avoid additional costs.
Understanding Contractual Rights and Obligations
To try and avoid additional costs that can emerge as a consequence of a shortage of supplies and labor, construction firms need to revise their contractual rights and obligations. It is very important to use legal tools to address the potential shortage of essential elements in construction. That way, construction firms can try and minimize excess costs emerging from the crisis. Each project contract should be created for specific needs, while there should be some relief for contractors in times of COVID-19 crisis. It is crucial to address the fact that supply chain issues with delays are consequently causing delays in construction as well.
Construction in Times of COVID-19: Shortage of Labor
The shortage of labor is also imposing additional costs on construction firms. Despite the attempts to create a safe working environment at construction sites, workers are fearing for their wellbeing. This case scenario as a consequence contributes to a tardy execution of construction projects. Ongoing construction projects are more certainly struggling to respond to the latest crisis. However, the industry is still operating as essential.
