Residential construction management specialist Gavin Skelly explains how covid-19 affected his business – and how the projects he worked on have kept going
Like the country generally, construction wasn’t prepared for covid-19. Many industries were shut down, but construction didn’t know where it stood. Building a hospital was obviously ‘essential work’. But what about housebuilding, which would at least help keep people in work and the economy going?
Our business works for residential developers and contractors, providing consulting and construction management services, delivering projects from appraisal stage right through to completion. This gave us a wide perspective on how covid-19 affected the sector. When the general lockdown was introduced, there was utter chaos. The virus tested every part of the system – relationships up and downstream.
Some subcontractors and main contractors immediately shut up shop, seeing furlough as a way of protecting overhead costs. Other sites tried to struggle on without any idea of who would be on site from one day to the next. With manufacturers closing down, many subcontractors were left without materials. Utility companies vanished over the hill without any explanation of when they would be back. Monitoring surveyors were told to stop visiting sites, clients were demanding answers on project timescales, while banks were asking about protection of risk and not allowing a single penny to be drawn without absolute surety.
Clients in the main were sympathetic but, with the possibility of interest overrun ruining any form of success, a contractor had to demonstrate a fairly robust argument about the delay being fully related to the coronavirus outbreak – and not a smokescreen to cover off other delay issues. Protection would be afforded under a JCT contract but only for time protection and not cost, bringing into question concurrent delays on time lost before the virus struck.
Our projects programme was affected in several ways. Larger schemes with multiple subcontractors fared worse than smaller projects procured with more ‘bundled-up’ packages and therefore less spread of labour. The largest delay was approximately eight weeks, but some sites were not affected at all.
The only way to manage client expectations was by issuing regular and detailed information to demonstrate the effect. That relied on having a substantive plan in the first place to measure against: weekly reports indicating labour levels against predicted, minutely detailed programmes allowed specific tasks to be identified in a cause-and-effect analysis, as opposed to headline summary bars that were too generic to break down.
This was backed up by affected subcontractors in writing, indicating their own issues, and in turn backup from their suppliers to prove the case. If possible, a contingency plan was prepared, demonstrating how we would react and adapt to certain circumstances.
For example, we are currently experiencing a lack of UK-produced multi-finish plaster. The ripple effect of this will be a lack of labour to apply it when the demand kicks in. In one instance, we offered clients the option of a tape-and-joint finish as opposed to the contracted skim, which would, in normal circumstances, be rejected by that particular client. Weighing up the comparative finish against the potential delay and cost overrun made the concession a more palatable option.
This virus could be with us for a long time. How we plan and resource construction projects will require careful consideration and plenty of flexibility from all stakeholders.
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Gavin Skelly is founder of Wisestone Consulting, which provides supported delivery and construction management to residential developers and contractors