From shelter-in-place orders to flip-flopping local essential business definitions, each day provides new mentally taxing challenges. But one financial consultant advises builders to keep their eyes on the ball and track coronavirus-related expenses. Though they may not ever be reimbursed, an expense sheet will help businesses be able to more effectively gauge the impact of COVID-19. By using a ledger or a code system, builders can track the expenses and use them to guide business practices or for bidding in the future.
If you have yet to incur costs associated with COVID-19, it is most likely just a matter of time.
Contractors often find themselves in a unique position when it comes to contract costs, constantly evaluating whether the work we are being asked to perform on an ongoing basis is within the scope of the original contract or is unique and therefore should be negotiated into a change order. This isn’t just for costs, but also time. Between liquidated damages, back charges and additional labor hours, time can often be just as costly.
The current pandemic is certainly causing additional unforeseen costs and delays - costs that could not have been predicted a month ago, let alone at the time of original contract. In order to provide change order documentation to general contractors or owners, unforeseen costs must be both identified and quantified.