Is Your Construction Project “Essential”?

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Is Your Construction Project “Essential”?As the coronavirus pandemic’s devastating impacts continue to evolve, governments at all levels (local, state and federal) are taking various measures to respond to the virus outbreak. Several governors and mayors have issued orders shutting down certain business operations while others are focusing more on non-business activities. Owners, contractors, vendors and suppliers are asking whether these shutdown orders force their businesses or construction projects to shut down. While government actions and orders vary by state and municipality, most – if not all – state and local governments are including exceptions to these shutdown orders for so-called “essential” or “critical” businesses and industries, allowing them to remain open. So, how does an owner, contractor, supplier or vendor in the construction industry determine if their business or construction project is “essential” or “critical” so that they may continue working?

In general, this is a question of state and local law. However, a number of jurisdictions are relying on federal guidance to determine what is “essential” or “critical.” On March 19, 2020, the Cybersecurity and Infrastructure Security Agency (CISA) issued “Guidance on the Essential Critical Infrastructure Workforce: Ensuring Community and National Resilience in COVID-19 Response,” which provides state, local, tribal, and territorial jurisdictions and the private sector help in identifying essential critical infrastructure workers. In its guidance, CISA identified an initial list of workers generally related to 16 critical infrastructure sectors. These sectors include:

  1. Chemical
  2. Commercial Facilities
  3. Communications
  4. Critical Manufacturing
  5. Dams
  6. Defense Industrial Base
  7. Emergency Services
  8. Energy
  9. Financial Services
  10. Food and Agriculture
  11. Government Facilities
  12. Healthcare and Public Health
  13. Information Technology
  14. Nuclear Reactors, Materials, and Waste
  15. Transportation Systems
  16. Water and Wastewater Systems

In CISA’s description of the list it provides, CISA specifically includes in its memorandum “working construction” as an essential operation or service supporting a number of industries. CISA’s guidance, however, is not binding, and state and local governments are establishing the specific parameters for their respective restrictions. Some states such as California are simply adopting CISA’s guidance and later providing additional clarification. Similarly, Illinois and Louisiana have created their own definitions that reference and incorporate CISA’s guidance. Conversely, New York created its own definition and left open the option of seeking an opinion for businesses that were not deemed essential. Some states have gone as far as Pennsylvania to develop a spreadsheet of which specific business and industries are covered. Although jurisdictions are taking different approaches, they are all making determinations about what is “essential” and “non-essential.”

Due to the varying approaches governments are taking, all construction industry businesses and stakeholders would be wise to consult applicable state and local orders to determine whether their businesses or projects may continue. As of today, most state shutdown orders exempt some construction activities. For example, the California, Connecticut, Delaware, Illinois, New York, Ohio, Louisiana, and Wisconsin shutdown orders (or their subsequently issued guidance) permit certain construction activities to continue for now. However, states like Pennsylvania and municipalities such as San Francisco, Boston, and others have imposed more strict limitations on the exceptions for construction, and in some cases, halted all construction activity.

Whether your business or construction project is located in a state or community with a pending shutdown order or where one may be looming, it is important to be proactive and ensure that your critical business operations are deemed “essential.” The government officials and staff who are making key decisions and determining the parameters of a shutdown may or may not fully understand your business or why it is critical. Accordingly, it is important that you engage your state and local officials and staff sooner rather than later.

As a final matter, it is important to note that unique issues and considerations may come into play for contractors performing under federal government contracts and, thus, such contractors need to be mindful of this reality and seek appropriate guidance.

Bradley can advise you on how these determinations apply to your business and counsel you on how to comply with them. Bradley’s Construction and Governmental Affairs practice groups are actively monitoring and engaging with Congress and the administration on these issues, and are actively engaging with state and local governments on behalf of clients to make sure their businesses are considered essential. Please contact Ryan Robichaux or Chris Selman if you have any questions or would like to engage in the COVID-19 policy process.