If You Use an AIA Form, Is Your Timely Performance Excused Because of COVID-19?March 19, 2020
The AIA (American Institute of Architects) A201 general conditions are the most widely used conditions for construction contracts in the country. Like most conditions, the AIA A201 includes a “force majeure” provision outlining when timely performance is excused.
The AIA A201’s force majeure provision, however, does not list “epidemic” or “pandemic” as an excusable delay.
Unlike the AIA, other standard form construction contracts do specifically reference disease-related events as excusable delay. For example, Section 6.3.1(j) of the ConsensusDocs 200 form allows additional time for delays caused by “epidemics.” Additionally, the default force majeure provisions for fixed-price construction under the Federal Acquisition Regulations contained in 48 C.F.R. 52.249–10 explicitly list “epidemics” and “quarantine restrictions” as “unforeseeable causes beyond the control” of the contractor.
The AIA A201, however, only provides as follows when addressing excusable delay (at Section 8.3.1):
If the Contractor is delayed at any time in the commencement or progress of the Work by (1) an act or neglect of the Owner or Architect, of an employee of either, or of a Separate Contractor; (2) by changes ordered in the Work; (3) by labor disputes, fire, unusual delay in deliveries, unavoidable casualties, adverse weather conditions documented in accordance with Section 126.96.36.199, or other causes beyond the Contractor’s control; (4) by delay authorized by the Owner pending mediation and binding dispute resolution; or (5) by other causes that the Contractor asserts, and the Architect determines, justify delay, then the Contract Time shall be extended for such reasonable time as the Architect may determine.
The best argument is that delays resulting from an epidemic or pandemic like COVID-19 qualify as excusable delays under the AIA A201 as a “cause beyond Contractor’s control.” But there is no guarantee, of course, that a Court or arbitrator will accept this argument, especially as to any delay not directly caused by a government mandate that the project be suspended.
Cases dealing with epidemics or pandemics (thankfully) are sparse. But there is some guidance in reported decisions.
In 2003 the United States District Court for the Northern District of Iowa recognized that an outbreak of Porcine Reproductive and Respiratory Syndrome (PRRS) qualified as a force majeure event under Colorado law, thus relieving a hog supplier from providing the requisite number of hogs pursuant to a supply contract. Similarly, in Rexing Quality Eggs v. Rembrandt Enterprises, Inc., the United States District Court for the Southern District of Indiana reflected favorably on the idea that the Avian Flu outbreak of 2015 was an “unforeseeable event precipitating a dramatic change in market conditions,” which “could not be reasonably anticipated,” and therefore could be considered a force majeure event under a broadly written clause like the one in the AIA forms.
As a global pandemic, COVID-19’s disruption to the supply chain and workforce could result in project delays, and could also result in suspensions or even terminations of projects. While we certainly hope the pandemic will result only in minor delays, widespread and extended construction halts are a possibility as the national and international emergency intensifies.
Please reach out to the Construction Law Team at Lewis Rice with any questions or concerns related to ongoing or future projects. You can also visit the Lewis Rice COVID-19 Response page for additional information and guidance.