Hibernating construction projects to reduce disruption from COVID-19
Delivery organisations can find themselves needing to respond quickly when investment plans are severely disrupted by external events, such as COVID-19, that prevent progress on a project.
By Annette Diziol, Project Director and Chelsea Drowley, Associate Director
Hibernate or terminate?
An initial assessment of whether hibernation or termination is appropriate for a project will take account of several factors including reasons for the disruption, what stage the project is currently in and if the works are considered essential.
A key consideration will be the anticipated duration of the need to suspend works. In the short term, hibernation is more likely to be commercially possible, whereas longer-term disruption, whether from the external event or subjecting the project to further feasibility evaluation, may impact the practicality of continuing existing commercial agreements.
What steps should you be considering when executing hibernation and re-awakening of projects?
Reviewing the standing local legal situation: do you have a process in place to constantly monitor and respond to the national and local regulatory environment and report to stakeholders?
Reviewing commercial terms: are active contracts signed and do you fully understand any terms and procedures for temporary suspension of works?
The detail is in the documentation: do you have comprehensive and independent records of progress and deliverables to form an objective baseline for the hibernation and re-awakening plans?
Preserve project assets: whether the works are in design or construction stages, delivery organisations must assure that ‘in progress’ works are handed over safe and secure for the period of hibernation.
New plan, new baseline: have you developed a revised programme and plan of work that includes the hibernation phase, separates historic performance and is aligned with a new performance baseline?
Maintaining control in transitions: does your project have a coordinated plan with clear deliverables agreed with all members in your supply chain for suspension of services and resumption of work?
Don’t leave it open-ended: a forecast end date to the hibernation period, even if it needs to be extended multiple times, allows for change control and keeps the team focussed on the project.
Create value in hibernation
Hibernation is a period of conserving resources while site activity is expected to be limited to sustaining safety, security and critical maintenance only. Some off-site work, including administration of change, planning and forecasting future works should continue.
Projects following a robust hibernation plan will be focusing effort on maintaining quality, minimising risks and maximising opportunities which may arise during the period of suspended works.
Communicate clearly and constructively: the hibernation and re-awakening plans should be transparent with clear conditions for the resumption of activity, with objective decisions led by the delivery organisation.
Reach a natural closure point: if possible, as any effort or cost expended in hibernating at a natural completion milestone is expected to be offset by a more effective re-start.
Maintain team continuity: does your business continuity plan support keeping the project team together and collaborating to retain project intelligence and prevent unnecessary rework?
Minimise financial burden through the supply chain: all work done should be paid for, including reasonable discretionary interim payments on contracts between milestones to support a robust supply chain.
Secure the plan (and the backup plan): identifying potential weakness in the supply chain and planning workarounds enables fast, informed decisions to be made as needed upon re-awakening.
Do your deep dives: accelerating activities that benefit from in-depth analysis including cost verification, commercial and performance assurance or commissioning planning during hibernation generate and capture additional value for stakeholders.
Exploit the opportunities: project teams using any spare capacity to collaborate, reassess the approach, refine and advance designs in preparation for construction improve the project’s ability deliver within budget, on time and right first time.
Re-awakening is a fresh start
Under current circumstances, a project coming out of hibernation will most likely resume in a way that is different to which it was previously being performed.
A detailed restart plan will agree the updated objectives, cost and schedule estimates and execution plans upfront.
Health, safety and wellbeing: the health, safety and wellbeing of project team members are paramount in any project’s success. Has your project prepared for comprehensive re-induction of the workforce and remote toolbox talks before mobilisation?
Strengthen alignment: do your stakeholders understand what has changed during hibernation? Formally reconfirm the project’s objectives, priorities, scope and programme with all stakeholders before mobilising the re-awakened works.
Set-up for a timely ramp-up: does your project have all the necessary resources in place to achieve a timely restart? Preservation of materials and equipment, a continuation of necessary procurement and logistics planning is critical to efficient re-awakening.
Set realistic productivity expectations: does your project apply a realistic ramp-up in productivity over time? Expect programmes to reflect adjustments in supply chain capacity and productivity, and plan for critical activities to be prioritised.
Mitigate risks in the ‘new normal’: do your risk registers and mitigation plans reflect the evolution of project risks over the hibernation period? Close monitoring of risk and opportunity development by the project team is more likely to facilitate a successful re-awakening.
Celebrate success: do you have a plan to recognise your team’s contribution to the project up to hibernation, as well as working collaboratively through the crisis and celebrate a successful restart?
Please visit our COVID-19 response page for all of our resources relating to the impact of COVID-19 on the construction sector.