OGP Communication re new ‘Covid-19 Mandatory Closure’ clause - public works contracts< back to news

The new COVID-19 Mandatory Closure clause for public works contracts and associated documents has now been published on the CWMF website and can be accessed at the link here: Construction Procurement Reform

Since the onset of the Covid-19 pandemic and consequent shutdowns of the construction sector in Ireland, the Office of Government Procurement (OGP) has issued a series of guidance notes advising Contracting Authorities how to manage the prolonged closures, re-opening, and tendering of public works projects during the pandemic. This included advice that Contracting Authorities party to a standard public works contract make ‘ex gratia’ payments to the contractor during a Covid-19 site closure. The purpose of these payments was to share the cost burden associated with maintaining the site during its closure in order to protect both the contractor and the delivery of the project itself. Between April 2020 and May 2021, the OGP published a series of ‘ex gratia’ guidance notes and letters of agreement in order to give effect to these payments.

The OGP – in close collaboration with the Government Contracts Committee for Construction (GCCC) – has now published this  Covid-19 clause to place provisions similar to those of the ex gratia scheme on a permanent footing in the public works contracts. The key benefits of doing so are:

  • providing potential tenderers for public works projects with a clear risk share in the event of a Covid-19 closure of the site, better enabling them to price the risk of such a closure in their tender price; and
  • enabling all parties to move quickly to protect the delivery of the project in the event a future closure does occur by providing a clear process to both share costs and extend the time to completion.

This Covid-19 clause will apply in respect of a local, regional, or national shutdown of the site due to Covid-19—the new guidance note GN 1.5.4 provides more information regarding the circumstances in which the clause applies.