Covid Update: Key Changes For The Melbourne Construction Industry

In line with the latest Victorian lockdown restrictions commencing on 17 August 2021, the operation of the building industry has changed which will affect a large portion of workers and projects in Metropolitan Melbourne. 

The restrictions have introduced new quota density limits on work sites as follows:

  • Sites must adhere to one person per four square metres at all sites. This will reduce staff on all projects except for critical infrastructure and emergency repairs.
  • On large scale construction sites, attendance of workers must be reduced to higher number of either:
    • 25% of the project’s resourcing plan; or
    • or five workers on site
  • At small scale construction, there is a limit of five workers on site.

This is likely to cause delays to the overall construction in the works and increase cost. 

Existing Contracts

For parties with current contracts on foot, it is crutial to assess how these changes may affect your:

  • Construction period

Many projects may face situations where builders are unable to deliver the project on time. In some circumstances, builders will be eligible to apply for extensions of times.  It is vital builders have these notices drafted correctly and submitted as soon as practically possible.

  • Contract price

If builders are paying trades on an hourly basis or material costs exceed previous estimate, delays will affect these and the profit margin on a job many be reduced. Builders who are concerned on how the increased costs may affect their project should seek advice to what rights they have.  

For more information on cost escalation due to covid restrictions read our blog here.

New Contracts

For all parties entering into new contracts, you should be giving consideration to the following: 

  • Construction period for your build

Due to current lockdown restrictions, builders must give allowances in their timeline estimate for the how this may affect their projects.

  • Provisional Sum items

Builders should consider whether some trades should be included as a Provisional Sum Item. By providing an allowance, builders may be able to submit a Provisional Sum adjustment for unexpected price rises. 

Our Services

Due to the precarious nature regarding contracts existing prior to covid lockdowns, we advise that builders seek advice immediately on their rights and obligations.

Please speak to Oldham Construction Lawyers before entering into a new contract and we can draft special conditions and contracts for you.

If you are unsure of your obligations and need assistance, please do not hesitate to call Daniel Oldham on (03) 9640 0002, or via email info@oclawyers.com.au