To say that Oregon developers, contractors, and design professionals have been shifting project operations (and business priorities in general) to account for the effects of the COVID-19 pandemic is an understatement. With that said, construction in Oregon is experiencing “business as usual” more so than other less-fortunate industries, such as retail and hospitality.
But for construction industry players in the State of Washington, COVID-19 impacts have been even more significant given the State’s decision to shut down almost all construction activity. However, two weeks ago, Governor Inslee provided the construction industry in Washington with some relief. With so many Oregon companies operating in Washington, we thought it helpful to provide an overview of what the first phase of restarting construction in Washington entails.
On April 24—based on input from construction workers, contractors, health and safety experts, and local government officials—Inslee announced a plan to allow current construction projects to restart. The Governor’s plan is not an allowance for the construction industry to go back to pre-pandemic business as usual, but instead is a phased approach that permits only projects that were in existence prior to March 23 to restart if certain requirements can be met.
New construction projects in Washington will not be allowed until Phase II, which will not be enacted until three weeks after the Governor’s stay-at-home order is removed. Tentatively, Phase II is projected to begin around June 1. This April 24 plan is technically an addendum to Inslee’s “stay-at-home” Proclamation 20-25, and it rescinds previous guidance related to construction from the “Essential Critical Infrastructure Workers” list issued on March 23.
On April 29, the State issued guidance clarifying that construction activity that was in existence on March 23 can restart. Importantly, “in existence” means construction activity that is (1) needed to fulfill an obligation under a contract effective prior to March 23, 2020, or (2) authorized by a government-issued permit obtained prior to March 23, 2020. Again, no new projects of any nature are allowed.
For existing projects, Washington now permits jobsite activities meeting a low-risk threshold of six-foot distancing to operate as soon as the contractor can meet and maintain requirements listed in the Phase 1 Construction Restart COVID-19 Job Site Requirements. The Requirements include a 30-point plan with protocols similar to those introduced at many Oregon construction sites after Governor Brown’s March 23 stay-at-home order was enacted. Both projects that were operating under the Proclamation and newly authorized projects under the Addendum needed to be in compliance by May 1, 2020, and adherence to the six-foot social distancing rule, the Addendum, and the Requirements will be strictly enforced.
Contrary to some expectations that the Governor would allow a reopening of residential construction only, the Addendum draws no distinction between residential, office, and commercial projects. Nor is any distinction made between public and private work. The Governor’s order is dependent not on the type of construction, but the job function of the worker. The overarching operating principle is maintenance of the six-foot barrier between workers and imposition on general contractors of exhaustive, strenuous, and expensive safety measures. Paramount among those are (1) a site-specific COVID-19 safety officer, (2) daily wellness checks, including mandatory daily temperature checks, and (3) continual cleaning and disinfecting operations. It appears clear that the primary duty for meeting the 30-point plan lies with general contractors, who must manage their subcontractor and supplier compliance and owners’ expectations for a compliant site.
If a work activity requires workers to be closer than six feet, it is not considered “low risk” and is not authorized to proceed. This is obviously problematic given the many tasks on a job that must be performed by workers in closer proximity. However, there is a limited exception for construction projects that were previously authorized under the Proclamation. Such previously-authorized projects must implement a hazard assessment and control plan that identifies appropriate PPE used in accordance with the Department of Labor & Industries’ (“L&I”) Coronavirus (COVID-19) Prevention: General Requirements and Prevention Ideas for Workplaces to proceed with construction activities without maintaining six-foot distancing. Follow-up requirements from the State mandate that cloth masks must be worn at all times by every employee on the worksite. On May 3, L&I provided a matrix outlining acceptable masks and face coverings for Phase 1 construction and for different types of construction activity.
These regulations will undoubtedly cost every general contractor more to implement and manage than anticipated and may also trigger delay and/or inefficiency claims. In addition, general contractors will likely see additional costs passed on by subcontractors for PPE and cleaning supplies as well as increased labor costs and labor inefficiency claims that may result from the six-foot rule. Compensation for the extra costs will largely be determined by force majeure or emergency cost clauses in contracts. As much as we would like to provide bright-line guidance on how these clauses will be interpreted, every case is fact-specific and requires tailored evaluation. These clauses often initially trigger more questions than answers. Early and consistent communication between project teams about impacts and discussion about a process for resolving COVID-19 issues in short order can best serve all parties.
Column first appeared in the Oregon Daily Journal of Commerce on May 15, 2020.
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