CONSTRUCTION LAW
Covid-19:
Rethinking public sector tenders and contracts Despite the likelihood that the Covid-19 virus will be with us for many months to come, it appears that public sector construction tenders are not including clauses in their contracts to deal with the global outbreak. By Natalie Reyneke*
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DA Attorneys recently reviewed several tender packages and their accompanying contract conditions posted for public sector work. The exercise revealed that not one of these tenders included a clause related to the pandemic. As construction law specialists, MDA Attorneys has worked to clarify how the pandemic could and should be dealt with in contracts that are currently being negotiated and signed. This follows months of assisting contractors with claims relating to the nationwide lockdown and its impact on construction projects in the country. Most claims envisaged the use of the force majeure provisions of contracts and, in some cases, clauses that entitle the contractor to benefits due to a change in legislation, and/ or unforeseeable shortages in the availability of materials or goods. Clearly, the pandemic can no longer be seen as a force majeure event, having already occurred; in addition, the potential ramifications are no longer unforeseeable. Although the specific contract form being used is key, we can assume that the ramifications are not only foreseeable (such as a move between levels of lockdown that could restrict movement) but that these ramifications could have been provided for under the contract.
Areas of impact To identify the relevant clauses and provisions that need to be reconsidered in new construction contracts, the various areas of impact caused by this event must be identified. The following was gleaned from what we have seen to date: • Works on-site were suspended or stopped as a whole (whether by instruction directly from the employer or its agent, caused by this unforeseen event, and further forced by regulation implemented by governments). • Government regulations resulted in border closures (affecting international trade and shipping, further affecting the supply chain, materials and goods delivery). • Restriction of movement by people (only allowed to work from home, demobilisation of people from the site, requiring additional travel arrangements for the workforce). • Health and safety implications (additional measures had to be put in place, social distancing had to be applied, hand sanitisers, regular washing of hands, wearing of masks, immediate alertness, and actions to be taken regarding medical testing upon experiencing of Covid-19 symptoms, to name a few measures). The majority of the public works tender documents reviewed incorporated the General Conditions of Contract for Construction Works (GCC), Third Edition, 2015, 2nd Print.
