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There are increasing reports that some subcontractors have decided to suspend operations during the COVID-19 outbreak.  The subcontractors made this difficult decision even though the construction projects for which the general contractor has a continuing performance obligation remain ongoing with CDC health and safety measures in place.

What should a general contractor do if it receives such a notice (assuming the project is still moving forward)?  My thoughts are below recognizing that our present environment changes from day to day based upon news reports and governmental orders.

1. Reply to the subcontractor.  Confirm receipt of the notice and inquire about the subcontractor’s reasons for suspension and corporate policies regarding COVID-19 if not clear from the notice letter.  If not already established, provide a contact person for the subcontractor to provide updates as to the subcontractor’s policies and work plan schedule. Include a reservation of rights so that it is clear that you are preserving claims arising from the suspension and state that

The day-to-day professional and personal impact of the COVID-19 pandemic is substantial.  The global event will have dozens of common legal implications that we will address in this blog over the coming days, but for now I wanted to start with the basic starting point for any event of delay and/or additional cost on a construction project — THE NOTICE! 

The time is now to send your notice.  

This is not an adversarial notice.  Your contracting party will understand the impacts experienced and should appreciate the proactive approach in communicating the COVID-19 impacts.  If discussions have occurred between with your contracting party, I would still send a formal notice as to avoid further legal defenses down the line.  Also, providing the formal notice creates a structure that is helpful in creating a productive communication pathway regarding the delays/costs incurred and ways to mitigate them.

No matter what the legal theory, the COVID-19

Below is the City of Boston’s Press Release suspending all regular activity at construction sites in Boston as of today – March 17, 2020.  Sites need to be made safe by March 23, 2020.  Policy will be revisited in two weeks.

CONSTRUCTION SITES

Effective tomorrow, Tuesday, March 17, 2020, the City is suspending all regular activity at construction sites in Boston. Employers should maintain the necessary crews to keep their sites safe and secure, keep any materials from blowing away, and prevent trespassing. This work needs to be completed in the next week, by Monday, March 23, 2020. After sites have been secured, skeleton crews will be permitted for the remainder of this suspension to ensure safety. The only work that will be permitted moving forward will be emergency work, which will need to be approved by the City of Boston’s Inspectional Services Department.

That essential work includes:

• emergency utility, road or building work, such as