Job Demobilization Because of COVID-19

Patrick BarthetCovid-19 Coronavirus, Work Stoppages and Terminations

Demobilization in construction means the departure of both personnel and equipment from the jobsite. It happens when the work is complete but it can also be triggered when the work is suspended or terminated, whether voluntarily or involuntarily.  The appearance of the COVID-19 virus has now made demobilization an important issue to address.

The first question to be answered is whether or not demobilization is covered in any existing contract. Unfortunately, many agreements are silent in this regard. And if unaddressed, demobilization is both an expensive and complex endeavor to take on.

An effective demobilization generally involves the following steps:

  1. Disassembly and removal of temporary structures;
  2. Withdrawal of personnel;
  3. Removal of equipment;
  4. Site clean up and restoration; and
  5. Protection of completed work.

But each of those steps requires significant thought and analysis. What notice is required to material equipment and labor suppliers; will there be cancellation costs and penalties; will equipment be left in place and for how long in the event of a suspension versus a termination; do all personnel have to be disengaged from the work as well as the site; and maybe not importantly, are there remedies to back charge for all such actions, all of which are costly. Should you also consider the option of remobilization for when the project comes back on line?

As you can quickly see, there is a lot of uncertainty associated with current conditions created by this costly virus. One would therefore be smart to both carefully review any applicable contract and then seek the counsel of a construction expert if asked to demobilize.