Understanding the impact of Covid-19 on contracts and future projects

As the Covid-19 pandemic continues, there are questions about the impact on contracts and future projects. ICE is bringing together experts to help you understand the impacts.

The impact of the pandemic on contracts.
The impact of the pandemic on contracts.
  • Updated: 17 April, 2020
  • Author: Mark Hansford, Director of Engineering Knowledge

The ongoing Covid-19 pandemic is presenting many challenges to civil engineers. Delivery of ongoing projects is being challenged by site shut-downs, material supply issues and shortages of personnel. Beyond that, future workloads are uncertain although the announcement this week of the notice to proceed on High Speed 2 is incredibly welcome.

It is already a reality that many major employers of civil engineers are using the UK government-funded Coronavirus job retention scheme that sees government paying 80% of the salary of workers placed on temporary leave or 'furlough'.

This is presenting challenges for joint venture partners and other project teams who, often at short notice, are finding themselves missing key team members. It seems almost inevitable therefore that contractual and legal issues will arise as those running projects struggle to remain on schedule.

In many cases the application of the NEC contract is likely to be key. To help with this, NEC4 Contract Board Chair Peter Higgins has been leading on providing advice to NEC users, producing guidance and hosting Q&A sessions for users alongside board member Ian Heaphy. You can watch the session below.

It is far from simple and misinformation abounds. For example, just how many times have we heard the two words 'force majeure' used in the last few weeks? Yet how many people understand what force majeure actually is or how it is applied?

Force majeure is a legal concept in many countries. In England, however, where there is no civil code, provisions to deal with force majeure should be set out in the contract. And these provisions vary from contract to contract.

The NEC3 and NEC4 contracts do not use the words force majeure at all, but make an event that looks like force majeure a compensation event. The JCT form of contract does use the term, but force majeure is not defined. The 1999 'Silver Book' version of FIDIC contracts does contain provisions defining force majeure as an exceptional event or circumstance beyond a party's control but the term is dropped in the more recent 2017 version. It really is complex.

ICE has a wealth of knowledge products for civil engineers to quickly refresh their understanding of law and contracts. This includes CPD modules and up-to-date contract guidance notes in our dedicated, member-only online Learning Hub.

As project teams attempt to press on in the face of Covid-19, there is also the fundamental challenge of ensuring that our infrastructure remains safe. Perhaps now more than ever, civil engineers need to be aware and alert to safety-related issues. This will be a question addressed next Tuesday in the first of a new series of ICE Strategy Sessions exploring the big issues facing civil engineering

This first session will explore how civil engineers are reassuring the public that the infrastructure they use is safe and will hear from Transport Scotland chief bridge engineer Hazel MacDonald on the challenges of maintaining Scotland’s rail and roads assets – a challenge made all the harder by the Covid-19 pandemic.

To the bigger, future workload question, that is more complex still. Going forward the world now faces three overwhelming threats of global disasters – climate change, the Coronavirus pandemic, and unknown, transformative socio-economic changes in its aftermath. Some of these socio-economic changes, if sustained, will have positive effects in support of climate change mitigation and adaptation. But what does that mean for our infrastructure systems? What will society want from our roads, railways and other vital communication networks?

ICE will be working with some of the smartest engineering minds and some of the UK's and the world’s leading academic institutions to explore these changes in depth and we’ll be sharing the findings as they emerge.

Whatever else Covid-19 is doing, it is reinforcing the need for civil engineers to be able to access reliable and trusted knowledge. ICE's knowledge team will be here to provide that, so please keep reading our newsletter and checking the ICE website for all our latest outputs.

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