Fast-tracked Construction Projects in Local Government – Impacts in a COVID-19 world – What to keep in mind

01 July 2020

Local Government led recovery

The Western Sydney Business Chamber recently released its “Shovels Ready!” initiative recommending that State and Federal governments develop an economic stimulus package specifically for local government including:

  • Allocating grants or loans to accelerate local capital works such as buildings and structural improvements and civic infrastructure;
  • Removing rate pegging or allowing it to be increased; and
  • Providing short-term financial support to ease liquidity difficulties caused by the pandemic.

The Federal Government has announced $1.8 billion funding boost for Councils in the form of the Local Road and Community Infrastructure Program. At State level, the Accelerated Infrastructure Fund will subsidise the costs of essential infrastructure works in the North West to unlock plans for the development of homes and employment lands.

Minister Stokes has also announced legislative reform for local contributions funds to provide more flexibility and fund pooling options for infrastructure works to stimulate the economy.

In anticipation of stimulus funding for local government projects that will help you sustain your local economy, we have set out some key issues for you to consider in the implementation of this initiative.

Key Issues

Tendering in the current climate

  • When issuing requests for tender and when evaluating those tenders, consider the allowance in their preliminaries that they have factored in costs associated with the Public Health Orders regarding social distancing so as to avoid variations during the project;
  • Programmes submitted with tenders should allow for the current work restrictions in those Public Health Orders;
  • Consider the impact of the Public Health Orders on the projects risk analysis;
  • Assess the suitability of the procurement contract platform and the tendering contractors’ capacity to manage the risks at different points in time, including relaxing restrictions and/or a second wave;
  • Ensure you have a robust procurement platform that will withstand the pressures brought to get these projects into the market and underway quickly so as to avoid risk; and
  • Consider Council’s Work Health and Safety obligations and those of the tenderers.

“New Normal” considerations in contract drafting and negotiation

  • Depending upon the project’s size, have you considered dividing the project into separable portions to react to evolving State and Federal government requirements?1
  • Does the awarded contractor have options to substitute the type and source of materials to avoid interruptions in the supply chains?
  • Reduce the risk of costly variations and extensions of time, by incorporating into contracts appropriate provisions that ensure the circumstances that exist at the time of tender are allowed for.

Costs associated with physical distancing requirements

  • The RFT could suggest that different work methodologies different shift patterns for sub-contractors could be considered to reduce the number of trades on-site at any given time?
  • Taking advantage of the change to working hours, and subject to reconciling those changes with the DA requirements consideration could be given to certain works taking place on weekends and public holidays to practice social distancing in line with extended construction site operating hours2 or staggering start times, breaks and finish times for subcontractors.

Workplace Relations & Safety

No matter how fast the stimulus moves, employers must remain focused on the safety aspects of all projects (not just workers, but all persons associated with each project such as contractors and members of the public while works are carried out).

We suggest each project be made “safety ready” through a detailed safety audit prior to and during each project to ensure, as far as is reasonable, compliance with our safety legislation.

The use of contractors should also be examined from a safety aspect, including for workers of those contractors.

How can HWL Ebsworth help you?

At HWL Ebsworth our team is made up of Local Government, Construction and Workplace experts dedicated to providing support to our clients in relation to the widespread ramifications of the COVID-19 pandemic. We provide guidance and advice to Councils negotiating with COVID-19 related issues in documenting arrangements for projects and works programmes and ensuring compliance with Public Health Orders. If you have any queries please contact one of our Partners below.

This article was written by David Vaughan, Kirston Gerathy and Brad Swebeck, Partners.

1. Such as, complying with national and state public health directions and promoting the simple but effective social    distancing and hygiene measures.

2. Environmental Planning and Assessment (COVID-19 Development—Construction Work Days) Order 2020; Environmental Planning and Assessment (COVID-19 Development—Infrastructure Construction Work Days) Order 2020.

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