The construction industry is likely to experience a lag in feeling the more significant impacts of COVID-19. Investors and owners will likely see current projects through completion, which will maintain the backlog that existed for construction firms when COVID-19 was declared a pandemic. This means many construction firms may not currently feel impacted by the current state of the economy, the rising jobless claims, and volatile swings in the market.
However, the economic stimulus will likely not restore the previous state of the world, and there are both immediate and long-term concerns for construction firms to consider now, to ensure the sustainability of operations. Here is a list of talking points for management of construction firms to review and evaluate:
- How are your primary suppliers, including subcontractors, doing through all of this?
- Do your suppliers anticipate being able to meet demand?
- Are your subcontractors able to stay on schedule?
- Will delays in procurement impact other aspects of the job schedule and cause stacking of trades, delay claims, other?
- Are there other ways to mitigate supply chain disruptions that you can put in place now?
- How are your customers doing?
- Will collections be delayed?
- Are you monitoring lien rights?
- Do you have an adequate credit facility to get you through a shortfall or delay from a customer?
- Have you considered cash flow projections under different scenarios over the next three to six months, and what ways it can be proactively managed?
Bidding and Estimating
- Has the pandemic impacted your backlog?
- Have you adjusted your current estimates for:
- Productivity issues incurred on jobs during the pandemic?
- Delay claims that may be incurred?
- Material pricing that has changed?
- Do you bid new work anticipating a return to normalcy?
- Have you talked with critical service providers (banking, bonding, etc.) on the anticipated impacts?
- Are you properly insured? What if an employee contracts COVID-19?
The risks and considerations are unique to each business, and collaborating to form a strategic plan to address the impacts of this pandemic is critical. Your Blue & Co. representatives are ready to talk through these and the other “what ifs” of your business to help manage your strategy around COVID-19. If you have questions or would like to talk, please contact us.