David M. Lick and Alaina M. Nelson | Foster Swift Collins & Smith
Re-opening after interrupted operations by COVID-19 will require keen attention to planning for previously unheard of requirements. There is a real possibility of the following concerns:
- Scarcity of key laborers including skilled trades as well as internet and IT employees and management
- Scarcity of materials and masks, for both employees and the projects
- Restrictions on mobility
- New safety concerns, disinfecting protocols, and daily employee requirements
- Work remotely protocols and new equipment to facilitate remote work
- Lack of sufficient capital to re-open and commence operations
- Limited access to loans
- Lack of returning customers or a reduction of volume
- Increase in cost of material, services and labor
- Reluctance of employees and customers to re-engage in face-to-face work
- Delays in permit approval or inspection processes
What to do
1. Employment Issues
- Conduct daily cleaning and disinfecting of the company premises and off-site project areas as required
- Conduct an inventory and assessment of current projects or operations
- Assess what new safety procedures will be needed and how to implement them with manuals and meetings with employees
- Evaluate if prior employees will return to work in person and assess the availability and need for new or different employee positions for remote work
- Determine what portion of the work, if any, can be done remotely for each employee
- Draft and implement remote work rules
- Assess what new equipment will be needed for remote work including new internet programs and protocols, videoconferencing software, laptops, computers, scanners, and printers
- Draft new onsite work safety requirements of:
- Daily temperature checks and self-reporting of health condition
- Social distancing and testing needs
- Employee safety masks, gloves, and other necessary personal protective equipment
- Heightened hygiene and cleaning practices
- Minimize congested staffing
- Daily monitoring of employee health
- Maintain a daily list of employees present at a worksite to facilitate identification of employees in contact with an infected employee in the event this situation arises
- Develop appropriate signage for employees and third parties
- Be mindful that this is a new culture affecting physical and mental health of employees
2. Financial and Administrative Issues
- Is there sufficient capital to re-open or is there government assistance available?
- Can additional capital be acquired through loans or other financing mechanisms?
- What is the additional cost to re-open with new procedures, new and different employees, and additional equipment?
- Will cost increase for operating the business after re-opening?
- Assess the amount of damage or loss that can be claimed against others or the insurance policies
3. Project Issues
- Has the physical plant or project deteriorated? If so, what is the cost to bring the status back to pre-COVID interruption?
- Are there any new environmental issues to be addressed? If so, what is the cost to address these issues?
- Will there be new facility designs?
- Will project performance require more time adjusting the schedule to complete?
- Provide communication of new expectations regarding project performance and new safety requirements
- Calculate the amount to re-commence the project
- Calculate the additional time to complete the project
4. Seek consultation with professionals who provide you with important advice regarding your business, including your CPA and your insurance agent.
5. Seek consultation with attorney regarding various legal issues such as:
- New government programs
- Existing contract terms for performance of production or construction, force majeure, and disruption and claims
- Preservation of claims for delay damages and loss of productivity
- Draft notices for claims and to insurance companies
- Need for a claims expert
- Insurance policy assistance provisions
- Need for new procedures and employee manuals
- Workers’ compensation
- MIOSHA rules
- Compliance with existing laws
- Good faith efforts to comply with health recommendations by public officials
- Advice regarding reducing your liability
6. New contract terms and additional documents to be considered include:
- Remote work protocols
- Mobility restrictions
- Disruption clauses defined
- Force majeure clauses specifically contemplating a pandemic
- New manuals required for safety and MIOSHA regulations
- Developing external communication protocols with customers and consultants and other contractees
- Developing internal communication protocols and implementing the use of Zoom or other videoconferencing software
- Consulting with an internet or IT expert
- New guidance for use of texting and other media use, particularly for company-owned devices
- Alternative dispute resolution processes, such as mediation or arbitration
- New insurances
- Review means to protect the company legal position
- Create a reminder of good business practices of employee media protocol, maintain records to anticipate future effects and crisis management