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Covid 19 Change Orders Phase 2 - Trade Costs

Subcontractors will be exposed to additional cost as they continue to reopen projects in a time with new work rules and risks.

  1. Labor availability – reduced construction activity should result in higher productivity workers being available.This won’t manifest in a cost change but will likely improve the situation for most projects.

  2. PPE Requirements – some small costs will impact the trade costs here, but will likely not have significant cost implications for most projects, if the project was bid with normal safety requirements. The biggest impact of PPE may well be minor productivity reductions as friction between tradesmen and managers increases.

  3. Material availability – the materials assumed or purchased by subcontractors may no longer be available, and alternate materials will have alternate cost structures. This may cut both ways, so owners should be deeply involved here. These issues may involve schedule, cost and quality, so close attention is required.

  4. Parking/Transportation – for projects that provide remote parking arrangements, or transportation on buses or similar, unanticipated costs may be encountered in assisting workers in accessing the remote parking site.

  5. Temporary services – temp lighting is likely to be required more extensively for projects that use a 2nd shift to achieve social distancing. Other temporary services such as temporary facilities, conference/break-rooms, or other high use areas may need to be increased or revised to meet new needs.

Changes are inevitable on construction projects in normal conditions. After a sea change in human behavior requirements, there will be a sorting process, as owners and workers try to find new ways to do their job. Construction managers must be alert and diligent to make certain that only appropriate charges impact the project. Estimators must watch and take notice in order to successfully price those costs in upcoming work.

And the big question: How much? I've heard reasoned arguments for everything from decreased cost to increases up to 5%. Prudent construction managers should allow for what they see happening in their projects. It seems unlikely that reasonable accommodations, up to and including adding second shifts, should be manageable within owner budgets, assuming you are holding some project contingency.

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