You are on page 1of 84

Construction Documentation

and Record Management:


Get it Right to Prevail in Disputes
Presented by
Matthew J. DeVries
Smith Cashion & Orr PLC
Possible Titles

2
Baseball Gone Wild!

3
Tour de France Gone Wild!

4
“Teenage Son” Gone Wild!

5
“Adult Son” Gone Wild!

6
“Ferdinand the Bull” Gone Wild!

7
“Construction Projects” …

8
… Gone Wild!

9
The End

• Questions?

10
Who Are You?

• Coast to Coast … Toronto … Vancouver


• Presidents, VPs, PMs, OMs, PEs, COO
– Public and Private Owners/Developers
– Architects/Engineers
– General contractors
– Specialty subcontractors/suppliers
– Insurance carriers
– Consultants (PM and Forensic)
– Bottom Feeders
11
Who Am I?

• Construction Attorney, LEED ® AP,


Husband, Father of 5, Blogger, Author

12
1. Project Management Procedures

13
1. Project Management Procedures
2. Project Documentation

14
1. Project Management Procedures
2. Project Documentation
3. Critical / Non-Critical Documentation

15
1. Project Management Procedures
2. Project Documentation
3. Critical / Non-Critical Documentation

4. Legal Issues / Litigation Concerns

16
1. Project Management Procedures
2. Project Documentation
3. Critical / Non-Critical Documentation

4. Legal Issues / Litigation Concerns


5. Examples of Projects Gone Wild
17
The Conclusion

• To promote effective project


management procedures

18
The Conclusion

• To promote effective project


management procedures
• Claim preservation
– Notice of claim
– Proof of liability
– Document claim impact

19
The Conclusion

• To promote effective project


management procedures
• Claim preservation
– Notice of claim
– Proof of liability
– Document claim impact
• If you end up in court …
– Minimize exposure
– Prevail in your disputes
20
Project Management Procedures

• Establish standard management


procedures
– Processing of COs & extra work
– Purchasing and receiving
– Project documentation
– Costs and accounting system
– Scheduling

21
Project Management Procedures

• Establish lines of communication


– Regular job meetings
– Field coordination meetings
– Design coordination meetings
• Address changes
• Address progress
• Address quality

22
Project Management Procedures

• Establish procedures to manage, monitor


and document work and progress
– Ensures regular flow of information for
project control and coordination
– Contemporaneous, accurate and complete
record of job conditions and problems
including their impact to the project

23
Project Documentation

• Purpose
– For proper planning and management
– Notice and reservation of rights
– Aiding in resolving claims and disputes
• Can be overwhelming but is essential
• Must be organized
– Standardized with written procedures
– Major classifications
– Chronological filing

24
Project Documentation

• Why are proper records so essential for


claims and disputes?

(1) To establish causal connection to event

(2) To establish reservation of rights/non-waiver

(3) To properly identify actual costs and delays

25
Critical Project Documentation
• Correspondence
– Establish responsibility for responding
to/acting on
– Used to comply with notice requirements
– Used to confirm discussions in writing
• Will help to clarify any misunderstandings

26
Critical Project Documentation

• Meeting minutes/notes
– List participants
– Subjects covered
– Nature of discussions
– Future action
– Distribute to all participants or those
affected
– Use previous minutes as agenda for next
meeting

27
Critical Project Documentation

• Daily reports/logs
– Routine, contemporaneous description of
work progress and problems
– Create standard form for easier use by
field personnel
– Can be used to build as-built schedule

28
Critical Project Documentation
• Daily reports/logs (cont’d)
– Information recorded briefly and concisely
• Manpower by subcontractors
• Equipment used or idle
• Major work activities
• Any delays or problems
• Areas of work not available
• Safety issues and accidents
• Oral instructions and informal meetings
• Weather summary

29
Critical Project Documentation

• Personal daily diaries


– Prepared by foreman, superintendents,
project engineers, project managers
• Record site conditions
• Record labor and equipment usage
• Record impediments to work
– Consistency is important
for trustworthiness

30
Critical Project Documentation

• Time sheets
– Document manpower
• Number of manhours worked
• Work performed
• Accounting records
– Must prove damages
with reasonable certainty
– Invoices

31
Critical Project Documentation

• Photographs
– Monitor, depict and
preserve conditions
– Pictorial diary of project (weekly or monthly)
– Document defective work or problem
conditions
Note pertinent information on back
• Date, time, location, condition depicted,
photographer
• Create photo log
32
Critical Project Documentation

• Status/submittal logs
– Shop drawings, field orders, change
requests, change orders, authorizations to
proceed, requests for information, drawing
revisions, transmittals
• CPM schedule
– Realistic baseline
• Input from subs for buy-in
– Regular periodic updates
33
Non-Critical Documentation
Personal emails, IMs, or blog trails

34
Non-Critical Documentation
Personal emails, IMs, or blog trails

Inappropriate copies

35
Non-Critical Documentation
Personal emails, IMs, or blog trails

Inappropriate copies Website traffic logs

36
Non-Critical Documentation
Personal emails, IMs, or blog trails

Inappropriate copies Website traffic logs

37
Project Management Software

• Different software packages


• Types of information track
• Web based capabilities
• Project management uses
• Executive uses
• Other project team member uses
• Why do we need to know this?

38
Software Packages

• Prolog
Manager/Proliance
• Expedition
• Plans and Specs
• Bentley Systems Inc.
• Microsoft Project
– Self hosted
– Application service
provider environment
39
Web Based Capabilities
• Project team accesses same
web based database
• Access to design drawings, job
site photos, schedules, and
+400 reports
• Document control is enhanced
by tracking revisions, storing
master files, streamlining review
process
• Compliance with corporate
procedures
40
Project Mgt. and Exec. Uses

• Procurement control • Daily reports


• Cost control • Contracts
• Document • Integration with
management SureTrak and
• Field administration Primavera
• Reports • Change orders
• Correspondence • Purchase orders
documents

41
Why do we need to know this?

• Step towards paperless project


• Excellent audit trial – check in/out, IP address,
version control
• Consolidate project documentation
• Integration problems with accounting software

42
Legal Issues

What is the “put it in writing” rule?

What is hearsay? Non-hearsay? Exceptions?

Email versus Letter versus Change Order?

Can we shred documents at the end?

What about paperless project?

43
“Put it in Writing” Rule

• What should you record?


• For whom are you documenting?
– General contractors/subcontractors
– Business/legal purposes
• Hearsay
– What is the hearsay rule?
– Exceptions

44
Exceptions to “Hearsay” Rule
– Business record exception
– Author actually observed conditions
– The records were prepared in the normal
course of business
– The records were prepared at the time of
the event(s) or reasonably soon thereafter
– There is no suggestion that the records
were prepared for the specific purpose of
use in litigation –“A less-guarded time.”

45
The Paperless Project

• Who owns the license to the program?


• How much access do the parties have to
the documents created in the program?
• Who controls the server?
• Will the parties be granted access to
project documents during the project?
• Is less formal communication (email)
good or bad for the parties?

46
Paperless Project (cont’d)

• Would you still use letters?


• Could emails to attorneys be retrieved
by other parties?
• Is a written instruction via email the
same as a change order?
• What type of information would you
want protected?

47
Duty to Preserve

48
Duty to Preserve

49
Duty to Preserve

50
Duty to Preserve

51
Sample Documents

52
Sample Documents

53
Sample Documents

54
Sample Documents

55
Sample Documents

56
Sample Documents

57
The Real World

• “One look is worth a thousand words.”


– Fred Barnard (Dec. 8, 1921 advertisement)

• 畫意能達萬言
– The Home Book of Proverbs, Maxims and Familiar Phrases (Mar. 10, 1927)

• "Un bon croquis vaut mieux qu'un long


discours"
– Napoloean Bonaparte

• “As the Chinese say, 1001 words is worth


more than a picture.”
– John McCarthy, computer scientist

58
E-mail: Not-So-Good

To: John
From: Paul
Re: Project Delays

John, I am going to have Drew send you some progress curve comparisons for
us to start the delay status analysis. I think we need to begin the discussion
with our management that we are late and tell them that we are analyzing
how late. We also need to consult the claims team as how we tell our
management that we are late. The schedule needs some serious work to be
used as a float tool and everyone is going to be looking to get answers.

59
E-Mail: Bad

From: Contracts Manager about Upper Management


People did not listen and act on previous recommendations in a timely manner
and I am annoyed that those delays significantly impact the cost and schedule
to this project. COMMITMENT from management means listening to the
people who have to make things happen …

Yes, I am annoyed, but more importantly I am concerned where we are going


with this project if people do not listen and act quickly. How can we be
successful with the schedule and cost if we do not have the resources to
execute the job proactively and/or project management does not respond when
we make recommendations? WE NEED HELP!!!!

60
E-Mail: Worse

From: Upper Management about Contracts Manager

Guys, let’s get real. I have three simple questions:

Is Bob the right person to be Contracts Manager on this project? If there is any
hesitation, then take the necessary action to get the right person in place.

Is there adequate support for the Contracts Manager at the site and/or back-up
available?

Are there any other projects in this deadlocked condition?

61
E-Mail: The Worst

From: Upper Management to Contracts Manager

Bob,

I understand your frustration about lack of support from back in the East. We
are attempting to get the additional resources and assistance that you have
requested. In the meantime, you need to continue with the team in place. If
we are going to make the contractor look like they cannot do their job, we
MUST look and act like we are doing ours!!!

Rob

62
E-Mail: Dirty Words

Internal Correspondence

Great! What the hell are we supposed to do now?!?! This invoice will now have
to be made known to ABC Co., but not before our sailaway date of May 15th
*******
I am sure that Mr. Smith and Mr. Jones will be involved here, but I would much
rather have ABC Co. see this after our equipment has left the port and is on
the High Seas on their vessels.

63
E-Mail: Dirty Words

Internal Correspondence

Great! What the hell are we supposed to do now?!?! This invoice will now have
to be made known to ABC Co., but not before our sailaway date of May 15th
*******
I am sure that Mr. Smith and Mr. Jones will be involved here, but I would much
rather have ABC Co. see this after our equipment has left the port and is on
the High Seas on their vessels.

Lesson Learned: Watch out for the four-letter words.

64
Daily Report

4) MISLABLED PARTS STILL


ONGOING. LOST TIME IS
MOUNTING UP. LAYDOWN AREA
HAVING A HARD TIME DUE TO
MISLABELING.

65
Deviation Report

Description: Labor Availability

Root Cause: Missed in the


original estimate.

66
Change Order Log

No. Item Date Amount Pending Notes


1 Rebar masonry 3/14 $114,450 0 Missed quantity
2 Rebar 3/14 $92,896 0 Missed quantity
3 Curb 3/14 $58,905 0 Missed quantity
4 Additional pumps 5/7 $105,990 0 Engineer
5 Additional filters 5/7 $12,450 0 Engineer
6 Electrical 5/7 $311,412 $311,412 Engineer

67
Project Photos: Organization

68
Photos: Assist in Project Administration

Location:
Nashville, TN
User:
Owner (out‐of‐town)
Feature:
Progression photos used 
by project members 
during construction
Source: Multivista Construction Documentation

69
Photos: Proof of Installed Quantities

Location:
Memphis, TN
User:
General Contractor
Feature:
Aerial photos used to 
establish entitlement to 
installed quantities

70
Photos: Impeachment of Witness

Location:
Memphis, TN
User:
General Contractor
Feature:
Aerial photos used to 
contradict witness 
testimony on scope of 
completion

71
Photos: Proof of Responsibility

Location:
Nashville, TN
User:
General Contractor
Feature:
Date of photos used to 
establish insurance 
coverage dispute

72
Photos: Defective Work

Location:
Atlanta, GA
User:
Owner & General 
Contractor
Feature:
Walk‐through photos 
used to show defect 
and standard
Source: Multivista Construction Documentation

73
Photos: Incomplete Work

Location:
Atlanta, GA
User:
General Contractor
Feature:
Interior MEP photos 
used to defend claim 
by sub for additional $$
Source: Multivista Construction Documentation

74
Photos: Recover Regulatory Fines

Location:
Raleigh, NC
User:
Owner
Feature:
Pre‐construction site‐
survey photos used to 
identify responsible party 
for local fines 
Not actual project photo
Source: Multivista Construction Documentation

75
Photos: Proof of Delays

Location:
Pittsburg, PA
User:
Steel Contractor
Feature:
Aerial photos show staging 
area used by other trades 
and impacted schedule
Source: Duggan Rhodes Group

5/30/00

76
Photos: The Smoking Gun

(Bad photo if you are the blasting contractor!)


77
The Legal World

• Higgins Dev. Partners v. Skanska USA


(Mont. 2009)
– Email sufficient to support a finding of
increased costs for change order
• Inland Construction Co. v. Cameron Park
(N.C. Ct. App. 2007)
– Email promising additional work not a
“contract”
– Lack of executed change order found to be
without merit
78
The Legal World

• A-1 General Contracting v. River Market


Communications (N.Y. 1995)
– Handwritten notations on contract “should
be ignored”
– No agreement about payment schedule
• Klein Development v. Ellis K. Phelps & Co.
(Fl. Ct. App. 2000)
– Faxed release of lien binding?
– Letter requesting original signature was
contradictory evidence
79
The Legal World

• Bethlehem Area Sch. Dist. v. White Bros.


Construction (Pa. Com. Pl. 2004)
– Letter constituted a limited admission of
damages (tiles and carpet, not mold)
• Raymond’s Building Supply v. Mattson
(Conn. Super. 2007)
– Photographs established that problems
“were or should have been” evident at the
time of termination
80
Future Issues

• Green Construction
– LEED ® credit templates, worksheets and
back-up documentation
– Documentation of energy performance
• Social Media 2.0
– Twitter
– LinkedIn
– Facebook

81
Questions?

Matt DeVries
Smith Cashion & Orr PLC
231 Third Avenue North
Nashville, TN 37201
(615) 742-8577 direct
(615) 354-3681 cell
mdevries@smithcashion.com

82
What to Do When
the Project Goes Bad?

• Review all contracts to determine rights


• Notify the proper persons
• Document the impact
• Reserve rights and proceed under protest
• Prove the monetary loss due to impact
• Negotiate resolution

83
Invoke Dispute Resolution If Necessary

84

You might also like