Article Series by Zubatkin – April 20, 2020

To help our clients and communities navigate a rapidly evolving global health crisis, Zubatkin Owner Representation has developed a series of articles on the urgent issues impacting non-profit real estate and construction projects.

To date, we’ve covered the following topics, all of which are assembled together on this page:

  1. Effectively Assessing Capital Project Impacts: Five Fundamental Strategies
  2. Crisis Communications & Governance: Four Key Tasks
  3. A Checklist for Approaching Construction Pauses & Stoppages
  4. Pro-Active Planning Strategies for Reopening
  5. A Checklist for Restarting Capital Construction Projects

Always find the most updated versions at: Covid19

To sign up for our newsletter, or to provide feedback or discuss these issues, please contact us at covid19@zubatkin.com 




Article 1

Effectively Assessing Capital Project Impacts:
Five Fundamental Strategies

When navigating an active capital project through a crisis, quickly and honestly establishing the facts and communicating the information available will facilitate timely decision-making by organizational and Board leadership.  Within this context, it is also particularly important to have an understanding of contract, insurance, and financing information as it relates to potential risks and claims that may arise.

Below, we’ve highlighted certain fundamentals that come to the forefront in developing strategies to respond to issues related to Covid-19. Each may have implications specific to an institution, and there will likely be interdependent relationships to consider.

  1. Reviewing Contractual & Financial Exposures

    An initial guiding principle is to review contractual and financial exposures as an overall approach to risk mitigation. A comprehensive contract typically includes a clear roadmap for how to address project stoppages or pause periods due to unexpected circumstances – including managing consultants’ services and limiting fees if a project needs to be paused. Quickly developing a clear understanding of the specifics of your contract and options is a critical first step.  A few clauses to focus on may include indemnity, force majeure, excusable delays, and terms related to the owner’s right to put the project on hold, both in terms of fees and ownership of documents.

  1. Clarifying Insurance Coverage

    Similarly, insurance programs should be quickly reviewed in coordination with professionals who fully understand the scope of an organization’s policy.  Your insurance broker should be able to help quickly articulate the limitations and parameters for an organization’s specific policy as it relates to the current Covid-19 context and associated operations.

  1. Creating Easy Access to Key Information

    Consolidating and clearly summarizing the details for contracts, insurance coverage, and other documentation can help facilitate quick and safe remote access to key information. If possible, a simple term sheet for all active contracts and insurance policies – including, for example, expiration dates – could be compiled.  To the extent that budget- and schedule-related risks and claims arise, having this information at your fingertips will be particularly valuable.

  1. Reviewing Funding & Cash Flow

    Reviewing funding – both in terms of the capital project and likely ongoing operations – is also important and particularly critical if cash flow stability and/or the ability to fundraise will be affected in the short or long term. We recognize that projects are undertaken in service of an institution’s mission and can/should only proceed if the institution itself has a viable business plan. An essential step is to model different scenarios to represent and prepare for a range of potential impacts.

  1. Assessing Government Programs & Grants

    In response to the Covid-19 crisis, a variety of government programs and grants (e.g., SBA at the federal level, NYS on Pause at the state level) have become available to provide added financial support during times of need.  Understanding the requirements for these programs, as well as recognizing the implications of accepting funding from these sources for short and long term operations is a critical component of developing a project response plan.

Takeaway

In summary, while the specific response will depend on the phase and specifics of the project, these guidelines should be helpful based on the principle that having a procedure in place will allow owners to alter course on their own terms to the extent possible. On a similar note, it’s apparent that the lessons learned from crises often generate pro-active future planning to address a variety of scenarios. To that end, you might consider developing an emergency response plan that considers the above facets of capital projects, as well as a variety of “what if” scenarios – as this will strengthen the sustainability of your institution in the long term.

About the Authors
Zubatkin Owner Representation, a project management and owner representation firm founded in 1994, has a history of serving the not-for-profit community and private development clients. With a strategic and collaborative approach, Zubatkin leverages experience, in-house technical expertise and project controls to support clients during the planning and implementation of their capital projects.

Questions?
For questions about this article, or assistance during the crisis, please contact Jason B. Zubatkin, Principal, at: jbz@zubatkin.com or (212) 271-4725.




Article 2

Crisis Communications & Governance:
Four Key Tasks

Every organization is unique, from its culture and governance structure to how issues are communicated internally. However, certain principles will apply for all not-for-profit institutions. There are four key tasks that must be accomplished immediately related to any impacted real estate or construction project:

Task 1: Collaborating with the Board

As a component of stabilizing operations and possibly needing to put active projects on hold, not-for-profit governance structures mandate apprising board leadership of the evolving circumstances. It is essential to share likely budget models and as many facts as are available as quickly and responsibly as possible. The board needs to confirm alignment regarding the steps needed to mitigate risks to health and safety, maintain operations, and/or to sustain financial viability.

  • This will require initial legwork – for example, to develop potential budget and cash flow scenarios – and potentially establishing a series of committee meetings in preparation for a coordinated board communication, which may take the format of a virtual meeting.
  • The key is simply that time is of the essence, so the more typical cycle (which for not-for profits, may rely on volunteer board members with day jobs and other commitments) will not apply here.
  • If possible, there should already be a protocol in place that empowers alternate decision-makers in the event that the typical board leadership are not available due to the crisis.
  • Consider checking Board bylaws to confirm virtual voting and quorum requirements
  • It may also be helpful to have a conference or videoconference line available – potentially for regular updates – that everyone, including those that are less tech-savvy, have ready access to. Confidentiality and security provisions should be reviewed as part of selecting the right provider.

Task 2: Coordinating Emergency Response Notifications & Keeping the Internal Team Informed

With the board’s support, the next step is communication to internal staff, as their continued efforts are what will enable the institution to continue operations, even if in a modified mode.

  • A clear communications protocol for issuing and distributing emergency response notifications should be in place and immediately reviewed with facilities and operational staff engaged in active capital projects.  Within the context of Covid-19, such a protocol should address how to handle the associated communications and response should an individual become infected on a project site. The emergency response notification plans would typically be devised and managed by a project’s construction partner, who will also be able to advise of any relevant health and safety guidelines being issued by regulatory agencies (e.g., DOB, OSHA).
  • For in-house staff as a whole, consideration should be given to the fact that many people that work in the not-for-profit space are probably doing so because they care about the institution’s mission; so, it will be important to make an extra effort to share regular updates from internal leadership – even if difficult business decisions are necessary.
  • If possible, provide regular updates and, if appropriate, share what the leadership is doing to stabilize and maintain operations, e.g. applying for grants or loans.

Task 3: Communicating Externally

For external parties, the communication may need to be tailored for each given audience – patrons, donors, general public, etc.

  • Outreach will depend on the institution’s mission – however, the overarching goal is to communicate with your constituents even while operating remotely.
  • In addition to updating the website to reflect the current conditions, a more tailored communication should be considered for patrons and ticketholders to acknowledge their greater level of interest and engagement
  • A separate communication may be warranted for donors or certain friends of the institution – whether to reassure them, or to request assistance in a time of specific and unprecedented need.
  • Don’t be silent! Past support for the institution’s mission will likely translate into genuine interest in how you’re faring and possibly to future patronage.

Task 4: Documenting Project Status & Commitments

Looking ahead, whether you’re in the midst of a capital project and needing to pivot to address a crisis – hopefully with temporary ramifications, or considering putting a project on hold for a certain time period, it may be worthwhile to invest in developing a “turnover” package – as a record of past decisions made.

  • We recommend a high-level summary of the project and contract/commitments status, along with a summary budget report that documents what’s been expended to-date; all key documents can then be transmitted in an agreed-upon electronic format.
  • Refer to the “Effectively Assessing Capital Project Impacts: Five Fundamental Strategies” for related recommendations related to contracts and insurance
  • In the best case, this package will become a “roadmap” if the project reactivates at a later date.

About the Authors

Zubatkin Owner Representation, a project management and owner representation firm founded in 1994, has a history of serving the not-for-profit community and private development clients. With a strategic and collaborative approach, Zubatkin leverages experience, in-house technical expertise and project controls to support clients during the planning and implementation of their capital projects.

Questions?

For questions about this article, or assistance during the crisis, please contact Jason B. Zubatkin, Principal, at: jbz@zubatkin.com or (212) 271-4725.




Article 3

A Checklist for Construction Pauses & Stoppages

In response to the Executive Orders in place across the country limiting construction activities, many capital projects have been experiencing a pause or stop in construction.  Given the possibility of fines for projects that remain active against orders, you will need to work with your construction partner to have them interpret directives and provide clear direction to demobilize as quickly, practically and safely as possible.

Note: This checklist can be used in two ways: either for projects that are not yet fully stopped; or for projects that have been stopped, to confirm that all the necessary steps have been taken.

While asking the right questions of your construction partner is critical to a successful process, it is important to keep in mind that contracts often require that directives to pause or stop work must be managed and directed by the construction professional – and not the owner.  This should be considered in helping to protect organizational liability should an issue or dispute arise.

Potential Considerations

The following is a list of potential considerations, which is not exhaustive and not in order of priority. Many of these tasks may also be applicable for operations staff, whether or not a major capital project is underway. It should be noted that every project is different and the unique complexities of your project may create additional specialty requirements.

On-Site Tasks:

  • Secure the site to prevent access from unauthorized personnel.
  • Security and code related signage is in place.  Update the emergency contact list / protocols and assure they have been properly distributed.
  • Confirm security cameras are operational.
  • Scaffolding, stairs, sidewalk bridges and netting to be secured.
  • Temporary lighting on site and at sidewalk bridges to be operational.
  • Temporary electric to be made safe.
  • Temporary toilets to be serviced / emptied.
  • Remove / empty dumpsters to minimize loose materials.
  • Consider adding bait boxes or traps to keep rodent population down.
  • Check for clear access to FDNY connections.
  • Safe off and lock out construction hoists.
  • Review integrity of all neighboring protection under your project’s control.
  • Review all fall protection hazards, install guardrails, infill floor and wall openings as necessary.
  • Assure all construction equipment is safely stored and maintained in accordance with manufacturer recommendations and remove keys.
  • Construction and demolition related materials to be safely stored or removed from the site.
  • Combustibles and combustible materials to be removed from the site.
  • Secure, or remove, all loose materials from uplift.
  • Regrade or back fill excavations as practical to prevent ponding.
  • Confirm integrity of exterior envelope (roofs, walls, windows, doors, etc.).
  • Review that existing building systems (MEP, fire alarm, security, etc.) are properly operational and not impaired.
  • Top off fuel tanks and assure integrity of utility connections.
  • Remove all volatile gases and liquids from the site.
  • Clean public sidewalks prior to leaving site.
  • Assure all emergency egress paths are clear.

Administrative / Documentation Tasks:

  • Notify agencies of work stoppage as may be required.
  • Photo document all current conditions.
  • Arrange a program for ongoing inspections as per agency, or project requirements, to assure ongoing site integrity.
  • Check state and local websites for directives and other requirements.
About the Authors

Zubatkin Owner Representation, a project management and owner representation firm founded in 1994, has a history of serving the not-for-profit community and private development clients. With a strategic and collaborative approach, Zubatkin leverages experience, in-house technical expertise and project controls to support clients during the planning and implementation of their capital projects.

Questions?

For questions about this article, or assistance during the crisis, please contact Jason B. Zubatkin, Principal, at: jbz@zubatkin.com or (212) 271-4725.




Article 4

Pro-Active Planning Strategies for Reopening

As owners prepare to restart a capital project following a pause due to COVID-19, many of the basic strategic principles outlined in prior articles apply. Owners should communicate a consistent and organized message to internal and external stakeholders that is based on facts – while acknowledging the evolving nature of the Covid-19 context.

A critical first step will be to acknowledge what has changed during the pause period, why the project is restarting, and whether there are any necessary modifications (e.g., space layouts, traffic flow, mechanical systems, facility maintenance/cleaning protocols) that may apply when restarting work.  This will also be an opportunity to be more deliberate, apply the lessons learned from the past two months, and, as appropriate, more readily plan for any future Covid-19 impacts that may occur.

A. Internal Leadership – Communications & Coordination

The foundation for this essential communication will be a reconfirmation of the project’s goals as the recent pause may have reset or adjusted priorities – either temporarily or permanently. The overarching objective is to identify potential exposures and risks in the near- and long-term, especially related to budget, cash flow and availability of funding. There will also be a critical need to look at any modifications to your facility maintenance and operations programs, as new guidelines are being rolled out. By anticipating key issues and having the proper information in hand, a realistic financial model and revised implementation plan can be developed.

It is as important as ever to establish a clear, consistent communications protocol that is based on good information. If there is already a website for the project, consider more regular updates; if there isn’t one in place, a regular internal communications bulletin is one possible idea to provide project-specific updates.

B. External Preparations & Management

In conjunction with developing the internal communication plans and protocol, a designated person should reach out to the relevant project team members and owner-managed vendors to confirm availability to resume work on the project. The goal will be to make any necessary contract updates regarding the scope, objectives and priorities – and as appropriate, to address recovery plans related to schedule or budget (hard and soft costs) since both may have been affected by the pause.

If an organization has been the recipient of a claim, legal counsel and the project management team should be conjointly engaged to offer support.  The attorney will provide input on the specific contractual obligations and legal implications, while the project management team will be focused on understanding the changes (e.g., project labor adjustments, cleaning, alternate shifts, etc.) that must be applied to the implementation plan.  Approaching the negotiation and reconciliation of claims from this holistic lens will help improve the chances of a successful project outcome.

As resuming operations within the “new normal” holds many unknowns, the key is to clearly present the facts so that you are able to effectively make decisions regarding how to proceed. Depending on the institution, outreach to the external partners may occur in parallel with the internal communications outlined above. Keeping your external partners directly engaged will help ensure a continued connection with your community, as well as help encourage ongoing and future support.  .

The Takeaways

In summary, a successful capital project reopening plan will look to clarify early on the key project impacts and associated changes required – whether programmatic, financial, or operational. A thoughtful management response will also be adaptable and recognize that further adjustments will need to be made as conditions/circumstances evolve during this unprecedented time.  Consistently and clearly understanding and pro-actively communicating the facts via the appropriate internal and external channels will help ensure that organizations are best positioned to engage in the reopening process.

About the Authors

Zubatkin Owner Representation, a project management and owner representation firm founded in 1994, has a history of serving the not-for-profit community and private development clients. With a strategic and collaborative approach, Zubatkin leverages experience, in-house technical expertise and project controls to support clients during the planning and implementation of their capital projects.

Questions?

For questions about this article, or assistance during the crisis, please contact Jason B. Zubatkin, Principal, at: jbz@zubatkin.com or (212) 271-4725.




Article 5

A Checklist for Restarting Capital Construction Projects

With states across the region and country establishing plans to carefully reopen, the focus for many has transitioned to how to best prepare for a phased reopening.  While every capital project is different and many construction sites and facilities remain closed, making use of the time available to effectively plan for the eventual reopening will help mitigate potential risks and establish a strong foundation for a smooth re-start process.

Based on information being issued by contractors and other industry professionals, we’ve compiled a list of the potential tasks and considerations in planning for the reopening of a project site. It should be noted that every project is different and the unique complexities of your project may create additional specialty requirements.

Reminder that while asking the right questions of your construction partner is critical to a successful process, it is important to be mindful of the terms and conditions included in your contracts.  Oftentimes, construction directives need to be managed and directed by the construction professional – and not the owner.

Project Administrative Tasks:

  • Endeavor to clear any backlog including decisions required to move a project forward.
  • Assure that shop drawings, submittals, requests for information (RFI’s) and other contractor-related submissions are queued for review / approval.
  • Update design documents to be reflective of the latest decisions / conditions and assure drawings are in conformance with each other.
  • Assure that permits for the project are still active and have not expired, and that special authorizations, if required, are in place.
  • Assure that certificates of insurance for all parties involved in the project are up to date and levels of coverage are correct.
  • Assure governing agencies have certificates of insurance on file as may be required.
  • Complete procurement tasks and have approvals and commitments in place.
  • Negotiate and finalize contracts and / or open change orders.
  • Review vendor contracts for entitlements for delay.
  • Update costs reports including considerations for Covid-19 related exposure costs (extended rentals, mobilization costs, additional project monitoring, etc.).
  • Update financial projections and cash flow and obtain ‘board’ approvals if required.
  • Review the financial and operational stability of all project vendors (consultants, contractors, etc.).
  • Provide start / restart notification to agencies, neighboring owners and others as may be required by regulation or contract.
  • Review site conditions that may have changed during the pause period and adjust plans accordingly.
  • Understand the warranty status of any equipment, systems, etc. that may be in place.
  • Obtain Covid-19 related business protocols from vendors.
  • Establish site-specific Covid-19 related protocols for the project. (See specific Project Operational Considerations below)
  • Update and re-publish emergency response protocols as may be required.
  • Update the project schedule to reflect its current status and estimate the tasks and timeline required to attain completion.
  • Review possible supply chain disruptions for raw materials, fabricated elements and completed assemblies (e.g., steel, light fixtures, exterior wall, stone, furniture, equipment).
  • Pending availabilities, consider alternate materials, assemblies, countries of origin, etc.

Project Operational Considerations:

The following is a list of potential considerations in the planning of the operational start-up of a project. The list is not exhaustive and not in order of priority. Note that many of these tasks may also be applicable in approaching facility operations, regardless of whether a major capital project is underway.

The Baseline

The premise of most considerations comes from the Baseline including:

  • Social Distancing – Maintain 6 ft between people
  • Personal Protective Equipment (PPE) – Along with the normal required protections, introduce face protection (masks, shields, etc.) and hand protection (abrasive resistant protective gloves)
  • Sanitize – Clean and disinfect high touch surfaces regularly and maintain proper personal hygiene
  • Wellness – If not feeling well, Stay Home.

The Specifics

The Specifics will be different for every project, but considerations might include:

Distancing

  • Maintain 6 foot minimum distance between workers and others unless a specific task requires otherwise (in which case appropriate shielding PPE should be utilized).
  • Ensure that all gatherings are limited to no more than 10 people and maintain 6 foot minimum social distancing, inside or outside.
  • Eliminate seating and make meetings stand-up, host in a well-ventilated area.
  • Prohibit gatherings of more than 10 people for breaks, encourage ‘brown bagging’ to avoid workers needing to leave the site.
  • Reduce site occupancy by staggering shift starts for workers and providing site access to necessary workers and staff only.
  • Reduce the number of workers in a given area by staggering work trades on multiple floors / areas where possible.
  • Minimize traffic and interaction by scheduling larger and less frequent deliveries.
  • Eliminate use of shanties and encourage use of ‘job boxes’ for tools, documents, personal, and other storage needs.
  • Stagger break times to reduce congregating.
  • Off-load of deliveries to be by site workers only who have been screened.
  • Designate stair cases as up / down only.
  • Make access doors auto operating, eliminate door knobs, allow doors to swing both ways, designate specific in/out access points.
  • Utilize web-based programs for project-related meetings where possible.
  • Utilize video equipment for review of site conditions to minimize interaction.

Wellness

  • Provide for Covid-19 screening protocols for workers before arriving to a site, as well as on site.
  • Have workers self-certify their level of health (symptoms, contacts, etc.) and therefore qualification to access site.
  • Maintain a zero tolerance policy regarding sick workers accessing construction sites.
  • Encourage workers to travel to and from the site separately.
  • Encourage commuting via private vehicles, bicycles, foot (as practical).
  • When commuting with others only commuters who are known to each other, and not displaying symptoms, to commute together.
  • Take workers’ temperatures on site as a check of health.
  • Define critical team members for business continuity and set up measures to minimize risk of simultaneous infection.
  • Establish practices for handling employees with probable or confirmed cases of Covid-19.
  • Provide follow-up protocols for any worker that may contract Covid-19.
  • Maintain appropriate records of wellness for potential contact tracing.

Sanitize

  • Discourage the sharing of tools and equipment. Sanitize between uses / users.
  • Increase ventilation of enclosed spaces.
  • Disinfect high traffic areas regularly (access / egress points, hoists and elevators, toilet areas, hand washing stations, handrails, stairwells, desks, telephones, break areas, etc.).
  • Have hand wash / sanitizing stations available throughout.
  • Establish a deep cleaning schedule for sanitizing exposed surfaces.
  • Provide for hot and cold water washing stations.
  • Assure adequately dispersed sanitation facilities so workers do not have to travel far from their work areas.
  • Provide no touch, bagged waste facilities for disposing of used PPE, paper towels, food, etc.
  • Disinfect touchable surfaces (e.g., door handles, knobs, steering wheels, levers, buttons) when entering or operating heavy machinery.
  • Disinfect job trailers, toilet areas, door handles, sinks, kitchen areas, desks, computers regularly.
  • Encourage sanitation practices at home that mimic those at work.
  • Consider encouraging laundering of work clothes separate from other items.

Enforcement

  • Designate a safety officer or other responsible person on the team dedicated to establishing, monitoring and enforcing Covid-19 related protocols.
  • Provide information ahead of a restart about onsite protocols.
  • Use group texts, email or other means to ensure that all site personnel are apprised of daily work activities, hazards, conflicts and updates to Covid-19 protocols.
  • Vigilantly enforce the policies established.
  • Hold delivery drivers and other ‘visitors’ to the same standards as workers.
  • Update and reinforce policies regularly, maintain a ‘hotline’ for violations.
  • Update site specific health and safety plans to include Covid-19 related protocols.
  • Hold daily Tool Box Talks that reinforce all project protocols with updates as necessary.
  • Consider greater use of technology as an information communicating tool and require worker acknowledgement to access site.
  • Utilize the Job Hazard Analysis (JHA) process to establish safety protocols and identification of required PPE for specific tasks.
  • Inform workers of resources to self-educate on Covid-19 related matters.
  • Schedule regular safety stand-downs to review protocols.
  • When presenting protocols, utilize visuals and examples for clear communication.
  • Provide signage, related to Covid-19 and other safety protocols, sufficient to cover project site.
  • Supplement official government agency signage with site-specific signage posted in high-traffic areas in multiple languages as appropriate.
  • Reinforce the safety message daily, enforce the policies in place.
  • Maintain detailed records of activities and incidents, correct as appropriate.

When developing any protocol it should be remembered that no plan will survive the first day of its enacting. Revisit the plan regularly and adjust to accommodate your project’s needs.

Additional Resources:

About the Authors

Zubatkin Owner Representation, a project management and owner representation firm founded in 1994, has a history of serving the not-for-profit community and private development clients. With a strategic and collaborative approach, Zubatkin leverages experience, in-house technical expertise and project controls to support clients during the planning and implementation of their capital projects.

Questions?

For questions about this article, or assistance during the crisis, please contact Jason B. Zubatkin, Principal, at: jbz@zubatkin.com or (212) 271-4725.