As we face uncertainty during these times, it’s important to focus on the things you can control.
With the situation and outlook changing daily, contractors should be proactive in considering the potential effects COVID-19 may have on their current projects and ability to bid on future projects. Additional labor shortages and delays in obtaining materials may impact the contractor’s ability to stay on schedule and complete the work within required time-frames. Owners or contractors may suspend work on certain projects, especially in industries that have been significantly affected by COVID-19. It is important to consider the terms of each contract and prepare for potential disputes by discussing these items with your attorney. Preparing cash flow projections and communicating with lenders on debt covenant compliance is another proactive way to plan for potential issues stemming from work stoppages, contract disputes, or cash flow issues. We also recommend staying up to date on OSHA requirements to help manage risks related to employee safety concerns.
Compliance requirements could also be delayed as a result of restrictions surrounding the COVID-19 pandemic. If your audit or review requirements are still in progress, we suggest checking with those who receive and rely on these statements to request an extension if necessary. Many regulatory agencies have already extended their deadlines. Additional subsequent event disclosures might be necessary due to the uncertainty around the duration of the virus, and its potential impacts on your financial results in 2020 and beyond.
Industry experts are suggesting that while other industries have been more impacted by COVID-19, there may be a slower rebound for the construction industry. We’re here to help you navigate these challenging times. For impacts on the real estate industry, click here, or visit our Resource Center for more up-to-date information.