Corona crisis: stabilise your current projects.
Current duties regarding information and action for clients/contractors of projects
Recent days have required all of us to develop a high level of improvisation skills and adaptability to an unprecedented situation which will change our social and economic existence for a long time to come. We see that everyone is working very hard to keep the consequences of the Corona pandemic as low as possible for their own social and professional environment. Understandably, this is almost impossible to achieve.
Cooperation is the watchword
To be able to successfully complete projects, albeit later than planned, under the current conditions, there is a need for close cooperation between the operators/clients of industrial plants and their contractors. The same applies to cooperation between subcontractors and the direct contractors of these projects.
Cooperation means first and foremost the open and immediate exchange of relevant information
If you are a contractor/subcontractor working on a project, please inform your client if there is a current event which is preventing your company from fulfilling its contractual obligations in relation to that project. Or inform your client that this current event has the potential to prevent your company from fulfilling its contractual obligations in the near future. Whether or not the Corona pandemic is the event preventing your company from fulfilling its contractual obligations must be determined on a case-by-case basis. Informing your contractual partners is in any case a first step along the road of cooperation for dealing with the consequences which the crisis will have on your project. An important point here is that you provide this information within the deadlines and in the form to which you are bound under your project contract or the applicable laws. This information must be provided for each individual contract. A notice on your company's website and/or in the social media is not sufficient and above all not suited to fulfil your contractual/legal loss minimisation obligation.
Only if you inform your clients of the existence of a disruptive event will you be able to refer to the causative event in the further course of the project and demand compensation for the consequences of such event, provided that compensation was agreed on in the framework of the respective project contract.
However, it is not only your duty now to report the event disrupting the planned course of the project; you must also inform your immediate clients about the risks you see for the further development of the respective project and the defence measures you intend to take in order to manage these risks. You must regularly examine the effectiveness of these defence measures and also inform your clients accordingly. Should the measures you have chosen not bear fruit, you must identify new measures, implement them and inform your clients accordingly. You must maintain this information loop until the causative event has been overcome or the project has been completed.
Operators / clients of industrial plants also have information duties
"We are the project's client, nothing can happen to us. It is the contractor who is late." This statement is as naïve as it is wrong. Project clients also have a loss minimisation obligation. You as the client of a project might have a contractually agreed obligation to cooperate in providing services needed by the contractor/subcontractor to fulfil their part of the contract. Should you not fulfil your obligation to cooperate, then the contractor/subcontractor might incur a loss for which they can demand compensation from you. A glance at the respective project contract will quickly show you your obligations in this regard. If there is nothing about it in the contract, then the obligations that arise for you under the laws which apply to the project should be examined.
Please let your contractor/subcontractor know which of your obligations to cooperate you are currently able to fulfil and which you are not. That way you can avoid any misinterpretations by your project partner. "We thought we were not allowed to deliver any material to the construction site because your incoming goods inspector is working from home" might be, for example, an assumption by a contractor/subcontractor who was not informed of the current status of your construction site organization (perhaps you have a skeleton crew). Update such information to your contractual partners regularly. Play with open cards. That will also create trust in your company.
Important for both client and contractor: call a spade a spade
Work has not been banned by the Federal Government. A generalisation such as "We could not work because of Corona as a case of force majeure" is not valid. Specify what work you can currently carry out or your project partner can carry out - and ask your project partner to specify the same. Based on the information exchanged, you then adapt your modus operandi in the project. This is the only way to put your project on a more stable footing given the uncertain Corona crisis conditions.
We will be happy to help you to cope with the consequences of the Corona crisis. Proverbially speaking: "We are all on deck" and fully operational. If you need help now to protect your interests with regard to massively disrupted projects, please send us an e-mail to the following address:
corona-services (at) 1155pm.de
We will then get in touch with you as soon as possible.
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