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

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).

Medicaid Announces Next Generation of Managed Care Organizations

For the first time since 2005, the Ohio Department of Medicaid (“ODM”) made significant changes to the structure of the Medicaid program by finalizing the Medicaid Managed Care Procurement process. The Procurement process began in 2019 at the behest of Governor Mike DeWine who had a goal to make Medicaid managed care more focused on the health and well-being of individuals.

BMD Appellate Win Clarifies Waiver of Contractual Right to Arbitrate

Brennan, Manna & Diamond, LLC attorneys David M. Scott, Lucas K. Palmer, and Krista D. Warren prevailed before the United States Court of Appeals for the Sixth Circuit regarding if/when a party waives a contractual right to arbitrate. Borror Property Management, LLC v. Oro Karric North, LLC, No. 20-3146 (the “Decision”).

Relief for Ohio Under the Federal American Rescue Plan Act

On March 11, 2021, President Biden signed the American Rescue Plan Act (the “Act”) — a $1.9 trillion COVID-19 relief package — a significant portion of which will be directed to the State of Ohio to support economic recovery, as outlined below.

Cleveland Manufacturer Violated OFAC Sanctions By Allowing Shipments To Iran - Know Your Customer and Know Their Customer

UniControl, Inc., a Cleveland, Ohio manufacturer of process controls, airflow pressure switches, boiler controls and other instruments, agreed to pay the Office of Foreign Assets Control “OFAC,” the financial enforcement agency of the U.S. Treasury Department, $216,464 to settle its liabilities for violations of the Iran Sanctions Program. OFAC stated that “this enforcement action highlights the importance of identifying and assessing multiple warning signs that indicate a foreign trade partner may be re-exporting goods to a sanctioned jurisdiction.”

Ohio Breach of Contract Statute of Limitations Shortened to 6 Years

On March 16, 2021, Governor DeWine signed into law S.B. 13 which shortens Ohio’s statute of limitations for filing lawsuits based on breach of contract. A statute of limitation is the time period within which a party must file a lawsuit before its claim expires as a matter of law.