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Vaccinating Against Design and Construction Risk: A COGENCE Alliance Momentum Recap

Client Alert

Last month, COGENCE Alliance hosted a four-day conference, attended by owners, affiliates, construction managers, trades, engineers, and architects. David Scott presented and other BMD team members hosted breakout discussions on how to “vaccinate against design and construction risk.” Groups discussed new and developing risks, how to mitigate those risks, and qualities of those who best adjusted to the new and developing risks.

Aggregated Risks in 2019. In 2019, COGENCE gathered information from the six industry segments (owners, affiliates, construction managers, trades, engineers, and architects) to first identify risks from each discrete group’s perspective. Next, COGENCE ranked the identified risks to determine which risks were most significant. Finally, COGENCE worked together across industry segments to identify habits to help mitigate risks and improve projects. The ten greatest risks aggregated across industry segments included: (1) communication; (2) contracts; (3) leadership; (4) schedule; (5) budget; (6) team members; (7) changes; (8) financial; (9) quality; and (10) due diligence.

Changing Risks with COVID-19. With the onset of the COVID-19 pandemic in March 2020, some of the risks identified by the various industry segments in 2019 quickly changed. Reports from breakout rooms indicated that new and different risks were resultant of the pandemic. For example, industry segments identified new risks associated with an elevated standard of care with heightened expectations and design for occupant safety, as well as new safety and sanitation protocols. Other risks included those related to cybersecurity due to increased remote work, as well as the evolution and need (or lack thereof) for space, such as physical offices.

New Risks with COVID-19. The breakout rooms also discussed how existing risks had morphed. For example, communication, the greatest risk identified pre-pandemic, posited new challenges including Zoom fatigue, complex logistics with site visits, as well as an increase in difficulty to collaborate due to a loss of “serendipitous” communications. Other changes to existing risks included budgetary concerns, particularly relating to the cost of PPE, HVAC improvements, and WELL certifications.

Mitigating New and Changing Risks. To address the new and developing risks, the breakout rooms discussed how to mitigate certain risks, which included more frontend planning, running through project stress tests (e.g. check technology and remote access), and developing more robust onboarding protocols to integrate new team members. Other mitigation plans revolved around communication, specifically ensuring consistent communication, standardizing how teams communicate (email, videoconference, phone call, text), following up after meetings, and identifying issues early and often.

Adapting to New and Changing Risks. The breakout rooms concluded by discussing those who have been most effective in adapting to the new and developing risks of the pandemic. Groups identified that those who demonstrate care and concern for their team members, as well as those willing to seek information and consequently learn and adapt had best weathered the new challenges in design and construction.

If you have questions or need more information regarding design and construction risk, please contact Construction Law Member David Scott at dmscott@bmdllc.com (614.246.7514).


Valley National Bank/Trulieve Loan: A Big Step Out of the Shadows

In a late December press release, Trulieve announced that it had secured a $71.5 million commercial bank loan. In addition to the amount of the loan, which may be the largest commercial bank loan to date to a cannabis company, the release prominently identified Valley Bank and featured both a quote from Valley’s Senior Vice President, John Myers, and a description of the Bank’s service platform and commitment to the cannabis industry.

The End of Non-Competes? The Impact It Will Have on the Healthcare Industry

On January 5, 2023, the Federal Trade Commission (“FTC”) announced a proposed rule that, if enacted, will ban employers from entering into non-compete clauses with workers (the “Rule”), and the Rule would void existing non-compete agreements. In their Notice, the FTC stated that if the Rule were to go into effect, they estimate the overall earnings of employees in the United States could increase by $250 billion to $296 billion per year. The Rule would also require employers to rescind non-competes that they had already entered into with their workers. For purposes of the Rule, the FTC has defined “worker” to also include any employees, interns, volunteers, and contractors.”

2022 Healthcare Recap and 2023 Healthcare Check-Up

As the country begins to return to a new “normal” following the COVID-19 pandemic, there are many healthcare rules changing on both the federal and state levels as a result. Thus, it is important for healthcare providers and their employers to be aware of these changing rules, and any implications they may have on their practice. Look back on healthcare in 2022 and find a checklist for 2023.

Direct Support Professional Retention Payments

On December 15, the Ohio Senate and House passed House Bill 45, which authorizes the Department of Developmental Disabilities (DODD), in conjunction with the county boards of developmental disabilities, to launch their initiative to issue retention payments to Direct Support Professionals (DSPs). These retention payments will be distributed quarterly to participating home and community-based waiver providers to address the workforce crisis in the direct provider sector. Governor DeWine needs to sign the Bill to begin the payments, but he is expected to do so by the end of 2022.

Real Estate Investors Position for 2023 Opportunities

Real estate investors weathered another year in a post-pandemic world, with the year closing with yet another interest rate increase coupled with both uncertainty and heightened interest carrying into 2023. Just last Wednesday, the Federal Reserve raised its benchmark interest rate 0.50 percentage points, shifting the target range to 4.25% to 4.50%. The new level is the highest the fed funds rate has been since December 2007 and marks the seventh rate hike this year. So what does this mean to investors, brokers, lenders, and others in the real estate world? Read a few perspectives below from stakeholders familiar with our BMD clients and the markets in which they do business.