Building is challenging at the best of times, but following an early start to a devastating fire season and the country’s hottest and driest years on record, 2019 has upped the ante beyond what anyone could have expected. So how do you navigate the impacts of disasters and recover from them—and can our industry be better prepared next time?
The scale of this summer’s bushfires has been unprecedented. Now, before the ash and smoke have even settled, many parts of the country are grappling with floods.
For construction, the disruption has been two-fold. The disaster had an immediate impact on worksites, staff and supply chains. It also poses logistical and operational challenges during the recovery phase.
The good news is, there are many places a builder or subcontractor can turn to for help and advice. You can also ensure that your recovery will help you be better prepared the next time a disaster strikes.
Be Prepared From the Start
Depending on the contract, a Head Contractor should be able to negotiate with a client so that project delays do not incur a financial penalty and cost-overruns are compensated.
Subcontractors, however, may be more vulnerable. Chair of the Australian Subcontractors Association, Paul Williams, tells Jobsite that many subcontractors are caught out when things go wrong because they did not read their contract thoroughly.
Look out for clauses that are likely to put you in a difficult situation when something happens.
Williams warns that there are cases where unethical contracts may impose penalties on subcontractors for not meeting milestones, without any exemptions or room to negotiate if outside forces beyond their control, such as flash-flooding or heavy smoke, resulted in a site-wide stand-down for a significant period.
The industry trend is for the majority of work on a project to be subcontracted, says Williams. Therefore, a large part of the project’s time, budget, safety and quality risks are passed down to the subcontractors.
“Look out for clauses that are likely to put you in a difficult situation when something happens,” says Williams.
It’s important to be familiar with the process for extensions of time and follow that procedure. “There should be a clause in the contract that says you can do that, all subcontractors have the right to apply for extension of time,” explains Williams.
Specific requirements within construction contracts can vary from state to state, the Queensland Building and Construction Commission notes in its advice. The Federal Government has compiled a range of resources that can help you find out which rules apply in your state or territory, and where to get some free guidance.
Construction law experts have also produced some excellent general resources on the issues surrounding natural disasters and the aftermath.
For example, Partner in US firm Smith Currie, Eugene J. Heady, outlines a range of considerations including legal matters, worker safety and practicalities like managing power and fuel supplies for site recovery work based on learnings gained from Hurricane Katrina in the USA.
Another useful resource is the Australian Institute for Disaster Resilience Handbook on Community Recovery. It has contact details for a number of useful organisations in each state for support and resources and contains a specific chapter about built environment issues. It highlights the need to carefully consider risks beyond the loss of materials or equipment, for instance, checking whether any asbestos contamination has occurred due to debris washing onto or being blown onto a site.
Insured or Not?
Williams says it could be worth considering business income insurance, in addition to loss and damage insurance. Many subcontractors do not have significant cash reserves to tide them over and keep wages paid during a stand-down period.
This is where the right insurance can help. The ASA has links with providers specialising in giving advice and finding the right policy.
Diversity Means Resilience
Any subcontractor is likely to have what Williams calls their “bread and butter work.” However, he warns not to “put all your eggs in one basket.” Having other, smaller jobs or projects on the side can help keep everyone working—and earning—if your main project is halted due to outside forces.
Prefab means being able to work out of the weather or a danger zone
It’s also worth looking into what parts of a job can be done using off-site prefabrication or assembly. Prefab means being able to work out of the weather or a danger zone. The trend is gaining popularity due to the productivity, quality and safety benefits.
“Anybody not thinking about offsite construction is fooling themselves,” Williams says.
Use Time Wisely
Some trades may be limited in terms of what can be done offsite—civil and plumbing, for example—but Williams believes any subcontracting trade can use offsite time productively to improve their business.
Changes to building codes and regulations, getting up to speed on new technologies or doing training in new safety requirements, such as managing silicosis risks, are all positive ways offsite time can be used to value-add.
“Any good business needs to not just do its trade, it also needs to concentrate on training, upskilling and advancing business acumen,” Williams advises.
“If you don’t update your knowledge…how can you plan for disaster?”