Covid In Contracts

Diagnosing the contractual clarity and procedural consistency for treating COVID and other general illness in your business relationships: where is it at and what have we learned?

On a 0–10 diagnostic scale, what’s the number? Zero (0) being "sick and struggling." Five (5) being "getting back to normal and seeking support." Ten (10) being "healthier now than ever with all COVID lessons captured."

When it comes to navigating COVID costs and contract implications, have strategic and holistic decisions been made, or have emotive situation-by-situation and contract-by-contract reactions occurred? Either way, I hope every organization has an empowered team stepping up who is taking a long deep breath and setting out to update terms, standards, strategies and budgets with a "lessons learned" lens stretching from big picture through to fine details. And, I trust we’ve all got an audit program planned for the last 18 months of spend.

If you are not creating a team to incorporate lessons learned and complete an audit, I invite you to read on and consider the opportunities you are missing out on.

• Do force majeure clauses now include pandemic or regional epidemic?
• Is sick time and/or quarantine and isolation time and/or treatment and vaccination time consistently and transparently paid? If so, is overhead and profit also paid? What about subsistence costs like LOA?
• Were extra replacement personnel costs for illness impacts incurred?
• Did COVID result in price increases and date extensions in scopes and relationships that were already unhealthy?
• Have you strategized and implemented the Company position on profiting off illness?

Throughout all of this, who was charged with validating the legitimacy and necessity of COVID cost impacts and what did they use as a guide? Or, was that all too much and we accept that COVID was an opportunity period where no one to would look too closely.  

What is the thermometer of "fair" and who is the doctor of defendable and justified for COVID costs?

Taking a step back — illness, whether COVID or otherwise, has always been a risk. It always affects productivity and continuity. It costs us. Whether it was the common cold going through the office, a construction camp locked down with Norwalk, a maintenance crew down a notable percentage of personnel while the flu goes through, or a vendor’s key personnel diagnosed with life threatening illness–illness impacts in industry existed prior to COVID and will exist long after. In mass illness situations an absence of risk planning, lack of contractual and procedural clarity, and vendor relations inconsistency gets amplified. COVID magnified the systemic challenges and contractual relationship gaps that have always been present.

I’d position that, historically, most illness associated spend was given to reactive management rather than proactive mitigation. We normalized the impact and ripple effects of sickness and gave away those dollars without thought. We’ve never collectively questioned the systems (i.e. high population density facilities with lowest cost janitorial services or no-sick-pay-offered organizations) and customs (i.e. management by presence not performance, and hand-shakes) that perpetuate it. COVID was a catalyzing instance where we had to shift the systems and change our customs, putting money and focus on proactive mitigation of illness.

So what are each of us going to do now?

Lets brainstorm COVID illness lessons learned starting in three (3) areas:  

1. Contract Terms

• Key Personnel clauses: Excluding ‘essential service workers’ and ‘non-managerial’ personnel from the definition and terms for Key Personnel is a structure that needs to revised.
• Defined responsibility to provide and pay for preventative measures such as masks and gloves, testing and vaccinations.
• “Burden and overhead’ definitions mandating sick pay (including illness and quarantine) specifically included or excluded from the price structure.
• A standard commitment to pay people time for illness, quarantine, and personal care (ex. vaccination, treatment, and dependent care) hours.

2. RFPs and Contracting Strategy

• Updated contracts formation selection criteria to give preference to (a) local vendors with local hiring commitments so to avoid inter-provincial and international travel risks, or (b) vendors with vaccination mandates or freedom of choice mandates with strong health and hygiene procedures.
• Revised site-wide Labour Agreements to include illness care compensation specifics to assure consistency of treatment of all people across the project and operation. And, an established policy to guide Project/ Operations/ Contracts Managers in the the treatment of vendors and vendor personnel when illness occurs.

3. Standards and Policy

• Revised Food Handling Procedures (Is the Site BBQ going to be served smorg style again?), Facilities Care and Cleaning Standards (Has a max square footage per janitor expectation been set, or a touch point cleaning mandate been defined?).
• If we have a glove and steel toed boots expectation set in our standards, have we incorporated mask wearing expectations too?
• What Design Standards need to change and facility modification budgets allocated to support physical distancing and increased accessibility to hygiene infrastructure?
• When is the next risk analysis deep dive on illness and trade off assessment of proactive and reactive strategies?
  

COVID has provided many lessons, an opportunity to clarify and refresh our terms, and improve our standards and facilities. The audit of contract spend over the last 18 months will offer many more. Systemic change with positive effects on health and wellness are ready to be realized, permanently, if we choose to move forward with the teachings available to us.  

Whether we take the learning opportunity or not, money is still going to be lost and spent on managing and mitigating illness here onwards.

I’m choosing to be on the "COVID Lessons Learned" Mitigation Team rather than the "Return to Normal" Management Team. I hope you will too.

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