COVID-19 and Excusable Delay on Public Projects in DC, MD, VA

COVID-l9 and Excusable Delay on Public Projects 042020

COVID-l9 and Excusable Delay on Public Projects in the District of Columbia, Maryland and Virginia
By Gina L. Schaecher and Eric S. Lammers, Rees Broome, P.C.
While COVID-I9 stay-at-home orders have not shut down all construction projects in the
District of Columbia, Maryland and Virginia, the impacts of COVID-19 may cause significant
delays to construction throughout the region – whether from a shortage of workers, an inability
to obtain timely supplies, the implementation of social distancing protocols, or some other
pandemic-caused reason. For contractors on public jobs, the applicable contract provisions and
incorporated regulations often provide for a time extension for delays outside of the contractor’s
control, including for pandemics and other “acts of God.” To obtain this extension, however, it
is important that the contractor comply with the contract requirements. While those
requirements vary among jurisdictions, as a general rule, contractors facing COVID-1g-imposed
delays should: (l) promptly notify the appropriate contracting authority of the delay and its
causes; (2) document, in as much detail as possible, how COVID-I9 has impacted and is
impacting the contractor’s performance; and (3) develop and implement a plan, with the
contracting authority’s approval, for how the contractor will proceed with the work. Some of the
specific provisions found in many government contracts in the District of Columbia, Maryland
and Virginia are briefly addressed below.
Excusable Delay in Public Contracts
Construction contracts for public projects in the District of Columbia, Maryland and
Virginia typically include provisions that allow for additional time for excusable delay, which
may include delays caused by COVID-l9.
Federal Construction Contracts. On federal jobs, many construction contracts will
include FAR 52.249-14, for “Excusable Delay” (or a similar provision, such as FAP. 52.249-10,
“Default (Fixed-Price Construction).” This provision provides that the government will not hold
the contractor in default for failure to perform where that failure was not caused by the
contractor’s fault or negligence. The provision specifically includes “epidemics” and
“quarantine restrictions” as examples. However, the contractor still should establish and
document that the epidemic was the actual cause of the delay, how the epidemic impacted
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performance, and that the contractor attempted to mitigate the epidemic’s adverse effects on the
contractor’ s performance.
District of Columbia Construction Projects. For District of Columbia construction
projects, the Department of General Services Standard Contract Provisions and the Department
of Transportation Standard Specifications for Highways and Structures provide that the District
may not terminate a contractor or impose liquidated damages if the “delay in the completion of
the Work arises from unforeseeable causes” beyond the control or fault of the contractor. Such
causes include “acts of God,”‘epidemics,” “quarantine restrictions” and “delays of
Subcontractors or suppliers arising from unforeseeable causes.” However, the contractor must
notify the Contracting Officer in writing of the delay and its causes within ten days from the
beginning of any such delay (unless additional time is granted by the Contracting Officer).
Maryland Construction Projects. In Maryland, COMAR}L}7.02.07(4) and State
Highway Administration Standard Specification GP-8.08(dXl) also preclude the State from
imposing liquidated damages against a contractor for delay arising from unforeseeable causes
beyond the control and without the fault or negligence of the Contractor.” Such causes expressly
include “epidemics” and “quarantine.” Again, prompt notice is essential – as with the District of
Columbia requirements, these provisions generally require notice within l0 days unless
additional time is granted by the procurement officer. Some counties include language similar to
that of the State Highway Administration Standard Specification in their construction contracts.
Not all counties and cities use this provision, however, so contractors working on such projects
will need to carefully check their contracts if faced with delay caused by the current pandemic.
Virginia Construction Projects. For Virginia Department of Transportation projects,
Section 108.04 of the current Road and Bridge Specifications state that, for fixed price contracts,
the Department will consider permitting an extension of time “when a delay occurs due to
unforeseen causes beyond the control of or without the fault or negligence of the Contractor.” In
a Memorandum dated March 12,2020, the Department acknowledged that the Specifications
authorize contract modifications and time extensions that may be necessitated by COVID-I9, but
stated that the Department would address these impacts on a “case-by-case basis.” Contractors
working on projects for the Department should provide timely notice of delays and all
information required by the Department to evaluate the request. For example, Section 108.04
provides that the contractor should provide information regarding certain delays to the
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Department “within three days of experiencing such a delay.” Contractors working on County
and City construction projects should review their contracts to determine the requirements for
pursuing an excusable delay claim for COVID-19 project impacts.
Other Contract Adjustments for COVID-19 Impacts
The foregoing “excusable delay” provisions provide for a contract time adjustment, but
typically do not provide any compensation for the additional costs that may be imposed upon
contractors by COVID-19. The ability to recover such costs will vary from project to project,
and jurisdiction to jurisdiction. As a general matter, however, a contractor may have one or
more avenues available to pursue a claim for additional costs:
o Government-Ordered Suspensions of Work. Most federal and state construction
contracts contain provisions allowing the contractor to recover costs where work is
temporarily stopped or suspended. On federal projects, for example, contractors may
be able to recover costs pursuant to FAPt 52.242-15 (Stop Work Orders) or FAR
52.242-14 (Suspensions of Work). The District of Columbia Department of
Transportation Standard Specifications permit a cost adjustment where the
contractor’s work is, “for an unreasonable period of time, suspended, delayed or
interrupted by an act of the Contracting Officer.” Maryland contractors may recover
for additional costs “caused by an unreasonable suspension, delay, or interruption”
caused by the state’s procurement officer pursuant to COMAR 21.07.02(4) and State
Highway Association Standard Specification 8.07(b). Finally, in Virginia, the Road
and Bridge Specifications also allow compensable delay for certain Engineer-ordered
suspensions according to Section 108.05. As always, compliance with applicable
notice and documentation requirements is essential.
o Government-Imposed Changes. COVID-19 may necessitate government-ordered
changes to schedules, work site accessibility or other impacts to the contractor’s
work. For federal construction projects, the contractor may be able to request a cost
adjustment pursuant to the standard FAR Changes clauses: FAR 52.243-l (“Changes
– Fixed Price”), FAF* 52.243-2 (“Changes – Cost Reimbursement”), FAP* 52.243-3
(“Changes – Time and Materials or Labor-Hours”), or FAP. 52.243-4 (“Changes”).
For District of Columbia projects, the Department of General Services Standard
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Contract Provisions and the Department of Transportation Standard Specifications
permit cost adjustments where “alterations or changes in quantities significantly
change the character of the Work under the Contract.” For Maryland projects, State
Highway Association Standard Specification 4.06 and COMAR21.07.02.02 provide
for an equitable adjustment where a government change causes an increase or
decrease in the Contractor’s cost of, or the time required for, the performance of any
part of the work under this Contract.” Similarly, Virginia’s Road and Bridge
Specifications provide for compensable delay in the case of delays due to alteration of
quantities or character of work according to Section 104.02. Again, the contractor
should pay close attention to notice and documentation requirements.
In addition to the above two examples, contractors may be able to seek recovery of additional
costs pursuant to other contract provisions – but it is important that contractors identify such
potentially applicable provisions quickly as timely notice and documentation undoubtedly will
be key to the contractor’s ability to recover.
Every construction claim, and every project, is different, and the contract clauses
applicable to such projects likewise vary. Accordingly, a complete recitation of all of the
possible contract clauses and requirements applicable to the COVID-I9 pandemic is beyond the
scope of this short article. Please consult an attorney to obtain legal advice regarding your
particular situation. Also, if you have any questions or comments regarding this article, please
contact Gina Schaecher or Eric Lammers at Rees Broome, P.C. Ms. Schaecher may be reached
at Gschaechner@ReesBroome.com or (703) 790-1911. Mr. Lammers may be reached at
Elammers@ReesBroome.com or (703) 226-17 60.