COVID-19: Construction Sector Accord Update
11 May 2020 (Official Construction Sector Accord News site here)
In this update we share new guidance on establishing a fair value for contract variations and advice on different models to rapidly mobilise construction projects. New health and safety protocols for Alert Level Two have been published, and new resources for supporting mental health are shared. And we let you know what the Accord is focusing on this coming week in the sector as we respond to the COVID-19 pandemic.
Working out contract variations
Last month the Accord worked with the government to develop guidelines on a consistent government position for contractors facing additional costs created by the COVID-19 Alert Level 4 lockdown. These guidelines stated that in most cases contractors would be entitled to claim costs as a variation to the contract. Today we are sharing additional guidance on the complex process of establishing the fair value of these variations.
The new guidance includes a set of principles for parties to follow when negotiating the cost of the variation and outlines the factors that need to be taken into account. It lists the types of costs contractors can claim and notes that they need to be able to demonstrate they have incurred these costs and have tried to mitigate them where possible. There is also guidance on a fair approach to ‘idle labour’ costs, which has been an emerging contentious issue in the sector.
These principles and guidance will apply to all government contracts but are equally valid in the private sector and we encourage anyone dealing with this issue to engage with these guidelines.
The guidance was developed based on Construction Sector Accord principles and will work to support the COVID-19 Response Plan aim of keeping cash flowing in the sector.
As an Accord partner, the Ministry of Education has already released its guidelines for valuing COVID-19 project variation claims on school property projects. These have been based on the Accord guidelines, and you can read them on the Ministry of Education website.
Health and safety at Level 2
While New Zealand remains at Alert Level 3, the Government has released more information on what Alert Level 2 will look like. The Prime Minister has announced we will be moving to Alert Level 2 on Thursday 14 May.
At Alert Level 2, health and safety remains the top priority for all businesses and workers. Consistent health and safety standards and protocols are essential to both protect workers and stop the spread of COVID-19, and to give people confidence that the workplace continues to be a safe place.
The Accord has been leading work with CHASNZ and the wider Accord COVID-19 Forum to develop the Alert Level 2 protocols for the construction sector. These are available on the CHASNZ website.
The key changes at level 2 are focused on:
- Physical distancing
- Interregional travel
- People on site
- Mental health
Physical distancing: The protocols specify that appropriate physical distancing is maintained when possible. In instances where work requires less than 1m physical distance for safety or ergonomic reasons, a risk assessment or Safe Work Method Statement (SWMS) should be undertaken to detail the extra controls to be used such as PPE, cleaning and disinfecting, and to record the instance of work and people involved.
Interregional travel: In accordance with Alert Level 2 rules, the protocols allow for more flexibility on interregional travel. See more information on Alert Level 2 rules for travel.
People on site: The protocols specify that visitors to sites such as clients, engineers, architects or auditors are allowed, but must comply with site requirements. They must follow site entry, induction, track and trace, hygiene and physical distancing requirements.
Mental health: To support the mental wellbeing of workers during these times, Mates in Construction mental health guidance for the sector has been incorporated directly into the protocols.
The protocols represent current best practice, and the expectation is all construction sector businesses and workers will apply them, and do the right thing.
The protocols are a ‘living document’ and may be updated as best practice develops and we receive further industry feedback. The current version will always be available on the CHASNZ website.
This work is part of the Accord’s Construction Sector COVID-19 Response Plan.
Mental health going back to work
Accord partner MATES in Construction are asking businesses to make mental health a key part of their ‘back to work’ programmes. MATES are working to get the message out that they are there to help and can offer support in a range of ways including site visits, hosting lunch time chat sessions, a counselling phone line 0800 111 315, and now a new mental health induction pack. This pack is to support people going back to work on site – offering guides, posters, videos, and a presentation – that can be integrated into inductions, toolbox talks and briefings onsite.
It’s important the sector keeps mental health front of mind. Statistics show that men who work in the construction sector are already well over-represented in the suicide numbers and we need to be extra vigilant about everyone’s mental health at this time. If you would like to talk to MATES about introducing their suicide prevention programme on site you can call them on 09 302 0535.
Rapid mobilisation of projects
One of the focus areas for the COVID-19 Response Plan is to get construction projects up and running quickly to support jobs and businesses in the sector, and boost New Zealand’s economic recovery. As part of this work, an Accord subgroup has identified and analysed several existing rapid mobilization models for adoption by the sector, such as those used after the Christchurch and Kaikoura earthquakes. It outlines approaches already being taken in NZ Transport Agency, the Ministry of Education, and within a group of Waikato councils.
From this, the Accord has produced a document for local and central government agencies that provides a range of potential delivery models in both the horizontal and vertical construction sectors, and suggestions for how to match models with project complexity and agency capability. It includes analysis on what works well and what doesn’t in specific situations, and encompasses ways to streamline processes including procurement, consenting, governance, and funding approvals.
The rapid mobilisation models will be used to support delivery of the pipeline of government construction projects across the country, as well as the ‘shovel ready’ programme that the Accord is working on with Crown Infrastructure Partners and the Infrastructure Commission.
Accord partners, the Infrastructure Commission and New Zealand Government Procurement and Property (part of MBIE) will provide support to agencies that are implementing the models.
New webpage for COVID-19 information for the sector
You may have visited the new Accord webpage Guidelines, information and practice that gives quick links to a range of COVID-19-related information relevant to the construction sector. This week we have added the contract variation guidance and rapid mobilisation models advice discussed above. We have also linked to the Auckland Council’s temporary new rules that relax restrictions around construction hours, as an example of good practice to boost productivity.
Accord focus this week
This week’s focus for the Accord COVID-19 response team is to:
- Develop and share more procurement guidance including advice on the fair risk allocation for COVID-19-related disruptions in new contracts
- Assist Crown Infrastructure Partners and the Infrastructure Commission to identify the pipeline of crown infrastructure projects that can be bought forward into the next year. More than 2,000 projects have been put forward for consideration.
- Find ways to support the residential sector including ensuring consumer confidence in the housing sector remains high post COVID-19
- Develop proposals for retaining apprentices in the industry
- Work with local government to ensure the Construction Sector COVID-19 Response Plan is aligned with council needs.
- Reviewing the existing Construction Sector Transformation Plan launched in January for additional opportunities in the Post COVID-19 environment
We’ll continue to update you on further actions and decisions in the Accord’s COVID-19 Construction Sector Response Plan as they develop.