From the beginning of the COVID-19 pandemic, many feared the that virus would have a powerful impact on supply chains and result in severe construction delays. In many states and municipalities across the country, construction was deemed an “essential” function, however, many manufacturing plants and trucking companies ceased operations that normally served the construction industry needs. Combined with a massive labor shortage, those fears have come to fruition. In this article we’ll look at steps contractors can do to navigate this new supply chain shortage climate.
Evaluate Work and Insurance
Contractors should be making a new habit to perform regular reviews of materials and equipment which have not been delivered to projects. The evaluation should identify the manufacturers involved, and where the materials are sourced and manufactured to understand potential risks.
In anticipation of supply chain delays, contractors should review their schedules to ensure there are material delivery activities in the schedule. Contractors would also be wise to review their insurance policies as they relate to business disruption and supply chain insurance.
Many contractors are finding that just because construction is continuing, external factors are still causing delays, such as the shutdown of state or local inspections, or the inability to pull new permits. At the same time materials and equipment needed to perform the work could be unavailable.
Other Construction Delay Considerations
Consideration should be given if an alternative product or material is to be used to mitigate a supply chain disruption. As with all substitutions, the contractor needs to make sure the product meets the requirements of the contract. Any deviation from the requirements needs to be clearly indicated as part of the submittal process.
There’s likely to be price differentials associated with a substitution, or credit required from suppliers and/or subcontractors contracted to provide the material which is unavailable. Contractors can rely on their subcontractors and suppliers to manage these risks but should provide notice and a change request prior to proceeding with a substitution if there are additional costs involved.
Delivery Delay Considerations
Contractors who are impacted by delays associated with delivery should carefully evaluate efforts to compensate for or work around these issues. Some contractors pace their work or perform out-of-sequence work to compensate. Pacing planned decision to temper the progress of an activity against another activity experiencing delay due to an independent cause. To implement pacing, contractors should know their schedule and available float.
Need Rental Equipment for Your Construction Project?
Duke Rentals is the number supplier of construction rental equipment across the Mid-west. We’ve been working hard to help our contractors meet their equipment during this difficult time. As the construction industry continues to navigate these uncharted waters, Duke Rentals is here to do everything we can to help.
