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Summary Article: ACI-NA, ACC and AGC Hosted COVID-19 Webinar Addressing the Impact of the Crisis on Airport Construction Projects

Airport construction experts recently gathered remotely to offer an informational webinar on the impacts of the COVID-19 pandemic on airport construction.  The webinar was sponsored by Airports Council International-North America (ACI-NA), the Airport Consultants Council (ACC), and the Associated General Contractors of America (AGC).

The 90-minute webinar was held in place of the annual “Airport Construction Strategy Summit” hosted by the three associations, cancelled after the pandemic necessitated social distancing.  The virtual event was offered to airport owners, contractors, designers and consultants and other stakeholders in airport construction.

The program was moderated by Jim Newland, partner at Seyfarth Shaw LLP and specialist in construction litigation.  The panel included Michael Burnett; vice president of Holder Construction Company; Yovannie Rodriguez, Esq., founder and managing partner at Agency Y, PLLC; Janice Zahn, assistant director of engineering at the Port of Seattle, and Frank Giunta, partner and head of Americas operations at HKA.

The theme of the discussion was the evolving challenges, contractual issues and construction delays associated with COVID-19, as well as best practices to mitigate related impacts and risks, and positive outcomes from the nation’s response to the global pandemic.

More than six weeks after the first shutdowns in response to the pandemic, the airport industry is grappling with the impacts, with sharp declines in air travel and resultant profits, as well as a slowdown in construction that had been booming at several locations across the US just a few months ago.

Safety protocols in place to protect both workers and the public are becoming less jarring and more routine.  “We’re starting to come to grips with this and figuring out what’s going on,” Newland said.

Most airport projects are continuing, albeit at a slower pace.  “Most airports have been spared a moratorium” on work, Newland said.  Delays have been prevalent, due to a number of factors, including owner-directed slowdowns, mandated social distancing and other safety measures, disruptions in materials and equipment supplies, the inability to stack trades, and the absence of key employees, he explained.

Newland and the group reviewed best practices to minimize the impacts of delays.  “Focus on the critical path, and look at the delays and the particular activities that are delayed, whether they’re delayed by the pandemic or not,” Newland advised.  “There could be delays accruing on the project at the time that COVID-19 impacted.  So, take a look at the critical path, and the activities” in order to determine the impact.

While most contracts allow some relief for construction delays caused by certain enumerated or extraordinary events, they the clauses may differ as to whether they compensate contractors monetarily, Newland said.  Also, if contract includes a no damage for delay clause, review it closely to determine if one of the four general exceptions apply.  On public projects, especially transportation-related projects, some states preclude the use of “no damages for delay” clauses that prevent contractors from recouping costs associated with delays.  But when they are enforceable, “generally speaking, owners may owe the contractor an extension of time, but no money,” he explained.

“When we talk about delay, we need to look at the contract to distinguish between compensable delay and non-compensable delay,” Newland added.  “These are unprecedented times, but [the issue of delay] will most likely turn on what the contract provides for.”

Newland advised both owners and contractors to stick to the facts when embroiled in a delay.  “Really, just focus on blocking and tackling.  What are the specific activities that are delayed?  Focus on those particular activities and why those activities are delayed.  Don’t get lost in the fact that we’ve got an unprecedented global pandemic.  Focus on the blocking and tackling…what happened, why it happened, and then look to the contract to see who’s responsible,” Newland explained.

In Seattle, public agencies are reticent to shut conduction down entirely, said Zahn, who oversees capital projects at the Seattle-Tacoma International Airport.  Keeping work moving isn’t easy, however, Zahn said.

“It comes with a whole litany of challenges,” she acknowledged.  Staffing shortfalls, the need to stagger work and ensure social distance at jobsites, the need to provide personal protective equipment to workers, supply chain disruptions, and shortfalls in funding all need to be managed once the decision is made to proceed.

Burnett agreed.  “We’ve seen an appreciation from the workforce to be able to work, and a commitment to do everything we can to stay safe.  But it’s meant re-inventing [how things are done], which has been a challenge,” he explained.

“If you’re making the decision to lean in and keep working, you need to recognize that that may be the more challenging decision to make,” Zahn said.  The existing contract can help sort out who’s responsible for what, Zahn added.

Collaboration among the project team, especially between the owner and contractor, can go a long way in mitigating challenges, Burnett said.  Clear, consistent communication also helps, he added, especially when workers are skittish about reporting to work.

“It’s important to keep everyone informed all along the way.  We share everything we’re doing to make sure it’s a good, safe environment,” he said.  “We’re really dedicated to keeping them informed daily, and to detail all of the actions we’re taking.”

Holder Construction has set up temperature check stations on its jobsites, and conducts regular health-check interviews with employees to screen who enters.  The firm also provides PPE to all employees, mandates social distancing, and bumps up protections for those who must work in close proximity.

“It’s a major moment for all of us to think and plan strategically,” Zahn added.  “The communication really needs to start when the owner decides to lean in or not.  [Once that decision is made, it’s important to think strategically, to think bigger, and to encourage everyone to be in the room.”

Newland added that good project relationships can help resolve the many challenges both owners and contractors are facing now.  “It’s a time for leadership here; not for playing too close to the vest,” he said.

Documentation also is key, the group said.  “Change is the new norm, and we need to document the agreements we make along the way,” Newland advised.  That documentation can be invaluable when later filing or defending claims or disputes, and also will help when planning future projects a year from now or five years from now, Rodriguez added.

US government websites, including FEMA’s, provide guidance on forms of documentation and the level of detail needed, Zahn said.

At Sea-Tec, where air traffic has dropped by 90 percent, the airport is working with contractors to make good use of the downtime to accomplish work now that had been planned for 2021.

“We asked, ‘what can we do instead?  Instead of paying workers to be inefficient what else can we do?’ ” Zahn explained.

“The worst thing for both the owner and contractor or subcontractor is to try to tease out who’s responsible for the inefficiency.  We want to reduce the impact for everybody and the way to do that is to look for the ‘silver linings,’ ” she said.

Involving all of the stakeholders in this pivoting has proved invaluable, Zahn added.  “The team came together, and came up with some ‘silver linings.’  This is where collaboration and teamwork really shines through,” she said.

In reality, both the owners and contractors have a vested interest in working together to maintain progress, Rodriguez added.  .

“On the contractor side, you want to be very open about things.  You want to sit down with the owner and look for ways to solve what could be an owner problem,” Newland said. “From the owner’s side, you want to work with the contactors to keep them working, to keep them busy, and to keep them paid, which keeps them happy.”

Rodriguez agreed.  “We’re in this together.  Although the priorities may not be exact, they may not be misaligned either,” she said.  “At the end of the day, we all want the projects done.”

Subcontractors, especially DBEs, can be particularly vulnerable now, especially in terms of cash flow, the panel member said.

“Communication with subcontractors is key,” Rodriguez said.  “This moment is going to have a lasting impact on our economies, and the smallest of businesses are going to struggle with cash flow.  That needs to be taken into consideration and it needs to be part of the equation.”

“All projects should have a person that represents the subcontractors involved in the decision making.  ” Rodriguez added.  “Those entities need to be considered and part of the equation.”

Technology has played an unprecedented role in keeping projects moving, the panel member said.

Sea-Tac, for example, is using cameras and other digital equipment to perform inspections normally done by people.  The airport also is conducting virtual pre-bid meetings, virtual pre-bid site tours, and virtual project meetings.  “We’re finding our folks to be quite innovative when they have to be,” Zahn said.

Technology is adding to productivity, rather than diminishing it, Newland said.  “We’re finding that we are more productive than we may have thought,” he said.

Telework, and other practices driven by COVID-19, may continue to play a large role in future projects, the group said.

“There are going to be a lot of improvements to construction that will stay,” Giunta said.  “We’ll see jobsites that are secure and safe, and we’ll see a commitment to health and safety.”

“We’ll have to learn how to do construction from a distance and, as a result, construction may [cost more and take longer],” Giunta added.  “Also, contractors will be stepping back and re-evaluating their bids based on the new normal.  The old prices aren’t going to hold any longer.”

Burnett agreed, saying that health and safety—and stopping the spread of illness—will continue to be a priority on future airport work.  “There’s no question that there will be lasting improvements,” he said.

“It’s really a time for leadership, a time for collaboration, and a time to be creative,” Newland said.

“To sum it up, be safe, but find ways to be productive,” he added.  “Safety is paramount.”

For more information on the Airport Construction Strategy Summit webinar series and related resources, visit https://airportscouncil.org/conference/airport-construction-strategy-webinar-series/. This webinar summary is provided courtesy of HKA technical writer, Patricia McCunney Thomas, inquiries@hka.com

It’s important to keep everyone informed all along the way. We share everything we’re doing to make sure it’s a good, safe environment. We’re really dedicated to keeping them informed daily, and to detail all of the actions we’re taking.”
Michael Burnett, Vice President Holder Construction Company
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