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