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Finding Opportunity in Adversity: Optimism for the Construction Industry

It is said that opportunity hides itself in adversity, and so, for those industry stakeholders still struggling with the impacts of the pandemic, it is fair to ask: what opportunities has the COVID-19 pandemic created within the construction industry?

Opportunities to Collaborate are at an All-Time High. Collaboration is, at times, a byproduct of necessity. For many years, contractors, subcontractors and lower tiers have all talked about a more collaborative approach to building, but habit always seemed to get in the way, as many of those same parties were quick to resort to familiar, one-sided contracting methods and traditional risk allocation mechanisms. Now, however, faced with the need to revise project programs, manage disrupted supply chains, accommodate public health restrictions, and mitigate project delays, project owners and construction managers are learning that it is in their best interest to work with team members in unison, not restricted by lines of contractual privity. This presents a real opportunity for the industry to come together to develop processes and procedures that correspond to the changed public health and market conditions.

We expect that along the way, project owners and program managers may see the benefit of increased participation in joint efforts related to managing project budget, scope and time. Adding stakeholders to the conversation lends itself to the future use of more collaborative project delivery methods, and improved contracting processes through which parties agree to fairly allocate risk based on their ability to control, and prevent, such risk. 

Innovations in Technology and Building Methods.  Physical distancing is now the norm, which necessarily changes the way contractors, subcontractors and other project participants interact with one another. Interactive web-based meetings have replaced in-person meetings. Tours and inspections are being conducted virtually to allow stakeholders to monitor project progress from miles away. Artificially intelligent sensors and devices can be worn to ensure physical distancing measures are being observed. All of these tools offer real-time information so that issues can be identified and resolved quickly, thus improving productivity and efficiency. 

We can also expect to see an increase in the modular building trend. Here, control is the key. When physical components or units are built off-site, the benefit is two-fold: first, more opportunities to better control the safety of that off-site environment, and second, a greater ability to control, and reduce, on-site congestion. 

Made in the U.S.A.  The pandemic has exposed another truth: the construction industry in the United States is still dependent on international materials and workers. Reports indicate that nearly 30% of building materials used in the United States are imported from China. When international borders are closed, or trade relations are strained, disruptions in critical supply chains are inevitable. Herein lies an opportunity to bring production and manufacturing operations back to the United States, particularly where owners and developers may be willing to pay higher prices for materials that come from a more reliable supply chain. The construction of those very manufacturing facilities could, in and of itself, also be a boon for the industry. 

Safer and Cleaner Project Sites.  Practices such as temperature checks, frequent handwashing, improved mask and glove policies, and sanitization of work sites and equipment are all drivers for improved public health, and are likely to continue beyond the pandemic. We may also see evidence of secondary benefits from certain health and safety measures. For example, staggered shifts will lead to less crowded work areas, which should aid accident prevention efforts. Less congested work areas may also lessen burdens to coordinate work, which in turn may increase productivity. With these practices likely here for the long-term, the project participants most willing to embrace the new measures are most likely to succeed.

Justin M. Alaburda is a member and co-managing partner of the Akron office of Brennan, Manna & Diamond. He can be reached at jmalaburda@bmdllc.com. 

El Contrato Escrito: La Herramienta Predilecta

No existe mejor herramienta a una disputa contractual que un documento firmado por las partes en el cual se expongan las obligaciones y acuerdos entre éstas.

New State Budget Institutes Licensure Requirement for Ohio’s Hospitals

On July 1, 2021, Governor Mike DeWine signed Ohio’s final budget codified at Ohio Revised Code 3722.01 et seq., which includes a new licensing requirement for Ohio’s hospitals. For years, Ohio was the only state in the country that did not license its hospitals. This approach will now be replaced with new, detailed requirements that will require careful review and compliance. Here are some of the highlights concerning these new changes:

Healthcare Provisions in the Ohio FY 22-23 Budget

Governor Mike DeWine signed Ohio’s Fiscal Year 2022-2023 budget bill (HB 110) into law on July 1, 2021. At almost 1,000 pages and 74.1 billion dollars, the budget lays out the State’s spending for the next two years. Below are a few highlighted provisions from the budget that will be important for the healthcare industry in Ohio

Interim Final Rule for Surprise Billing

In an effort to implement the new bipartisan No Surprises Act, on July 1, 2021, the Department of Health and Human Services (HHS), along with the Departments of Labor and Treasury, issued an interim final rule to safeguard patients against unforeseen medical bills arising from out-of-network care.

President Biden Seeks to Limit Non-Compete Agreements

Today, President Biden announced he would issue an Executive Order that calls on the Federal Trade Commission (FTC) to adopt rules to curtail worker non-compete agreements. Interestingly, a week ago, the FTC approved changes to its Rules of Practice to modernize and expedite the way it issues Trade Regulation Rules. If you have followed our alerts, we predicted the elimination of non-competes would probably happen. In 2016, then-Vice President Biden was a vocal opponent against non-compete agreements. He led the Obama administration’s initiative seeking to limit or eliminate non-compete agreements. In his presidential campaign, Biden promised to “work with Congress to eliminate all non-compete agreements, except the very few that are absolutely necessary to protect a narrowly defined category of trade secrets . . ..”