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Finding Opportunity in Adversity: Optimism for the Construction Industry

Client Alert
September 8, 2020

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. 

Construction LawBMD's Construction Law GroupJustin M. Alaburdaconstruction industryCOVID-19projectscontractorssubcontractorsjobs
Client Alert

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Changes to Medicare’s Physician Fee Schedule and Outpatient Prospective Payment System

November 15, 2021Come the beginning of 2022, both the Medicare Physician Fee Schedule (“MPFS”) and Outpatient Prospective Payment System (“OPPS”) will look a little different. As a refresher, the MPFS lists the fees associated with reimbursement of services to providers at certain facilities, taking into account geography and costs. By contrast, OPPS sets reimbursement rates for hospitals and community mental health centers for outpatient services, which are determined in advance. A summary of some of the more pertinent changes to each rule will be outlined below.Client Alert

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November 10, 2021On November 4, 2021, the Centers for Medicare and Medicaid (“CMS”) released a new rule requiring certain healthcare facilities to implement policies requiring employees to be vaccinated against COVID-19. It does not matter if a staff member does not perform patient treatment services, they must still be vaccinated if an employee of an applicable facility.Client Alert

OSHA COVID-19 EMERGENCY TEMPORARY STANDARD (ETS) Vaccination, Testing, Recordkeeping, and Reporting

November 5, 2021The Occupational Safety and Health Administration has issued its long-awaited COVID-19 Emergency Temporary Standard (ETS). Note that the ETS does not apply to employers covered under the Safer Federal Workforce Task Force COVID-19 Workplace Safety: Guidance for Federal Contractors or Subcontractors (see here), or to settings where employees provide healthcare services subject to OSHA’s ETS for the healthcare industry (see here).
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