Jun 4, 2020
An article by ConstructConnect’s Daily Commercial News looks at a recent panel discussion held to discuss stimulus projects in anticipation of expected government announcements. The discussion was part of a webinar presented by Toronto-based Osgoode Professional Development on May 26. According to author Don Wall, in the discussion, the panel of construction lawyers talked about the concerns that lawyers will have to deal with in future project contracts, including risks such as productivity uncertainty, a potential second wave of COVID-19 and contractor insolvency, and “warned that the next batch of project contracts they and their colleagues draft will require significant revisions from those crafted just six months ago.”
Panellist Richard Wong, Chair of Osler’s Construction and Infrastructure Practice Group, said that, among the numerous risks that will have to be incorporated into contracts as stimulus projects are rolled out, lawyers will have to accommodate a “rush to design” as owners compete to get stimulus funding.
Owners will be “designing on the fly,” stated Richard. “In a rush to get stimulus funding, especially those that have been tied to conditions, and done by 2021, you may get owners pushing things out just to get shovels in the ground, but what I see from a life cycle perspective, you’ve got to have proper cost control and oversight,” Richard said.
Panellists also flagged other issues, such as insolvencies — Richard had thought a spate might emerge in August or the fall — supply chain disruptions, other COVID-19-related execution risks and permitting delays.
Richard also identified digital infrastructure as likely to benefit from stimulus funding. “That is something we are seeing whether it’s data centres, cloud computing, telecommunications, broadband, all of those are geared to an uptick with COVID,” he said.
The article also notes that projects that aren’t likely to “get to the starting line” are those impeded by complicated procurement policies or trade agreements. “When given this kind of once-in-a-lifetime opportunity…I struggle with the fact that policies and trade agreements really don’t allow for those two-week, one-month decisions,” stated Richard. “You still need months to have full compliance, and that takes you out of the ability to move things around and accelerate capital planning work.”
For more information, read Don Wall’s full article, “Osgoode panellists highlight shovel-ready contract issues” in the Daily Commercial News.