Norman F. Jacobs Jr., CSI, CPE
There are many types of records that should be maintained by the project manager during a construction contract period. The following guidelines, building from the information provided in part one of this article, are intended to serve as a checklist of the types of construction project data. They help establish both entitlement and any damages due in the event there are any disruptions, impacts, or delays.
Documents included in the owner’s bid package, which typically are drawings, specifications, soil data, asbestos data, General Conditions, special conditions, and specific instructions, as well as the contractor’s calculations and bid preparation documents, are generally admissible evidence as to what was intended by a construction contract.
A prudent contractor will seek clarification to ambiguities in the bid documents, particularly if they have any cost impact or risk. Forensic investigation into the reason for ambiguities may reveal some architect or owner action (or inaction, such as defective design) for which a contractor may be entitled to recover any related addition cost and time.
Only those ‘documents’ in existence at the time the contract is awarded are part of the contract. There may, however, be one exception. The “Special Conditions” may state the critical path method (CPM) schedule prepared by the contractor (and approved by the owner and architect after the issuance of the contract) will be an integral part of the contract documents. Anything else prepared at a later date, except for formal change orders, is not part of the contract. It is essential a clean, unchanged set of the original drawings and specifications be kept for future reference to prove any changes that may occur during the project.
The notice to proceed is also a significant contract-related item in that its date may unexpectedly follow contract award by several weeks due to the time it takes to obtain all required permits; and could delay the project from beginning. Therefore, the contract document file should include:
- original signed contract;
- approved CPM Schedule;
- minutes of contract negotiation meetings;
- drawings and specifications issued for construction;
- owner-, architect-, and contractor-required insurance policies;
- notice to proceed;
- coordination meeting minutes; and
Retrieval systems for documents should be evaluated for organizational effectiveness, There is always a risk of lost documents. Project managers must know how to balance contingencies in all contract documents and keep their risk management game plan updated. This entails identifying construction risk and exposures, and formulating an effective management strategy to mitigate the potential for loss.
At any point, the project manager could find himself or herself needing to locate certain documents to understand a problem. Ask yourself how many hours have you wasted looking for paper documents when you had no system to find them? At times, we all need to retrieve information from the tons of documents we have created during a project.
All contract parties involved in the construction process should be aware of the need for accurate and complete project records to help maintain effective control of a construction project. Such records are the principal source of evidence for timely negotiation of change orders, resolution of disputes, and proof of time delays and damages.
When a contract party has to file a claim because of a breach or dispute with another party, the burden of proof is on the claimant. Proof can be substantiated through the accurate and factual documentation of performance and the maintenance of project record-keeping systems covering transactions, correspondence, inspections, submittals, schedules, and various reports. Courts and boards require disciplined standards of ‘documentation’ and proof be followed.
In order to retrieve records, the project manager must preserve daily every element of project administration, and actual performance should be recorded daily to a standard that enables a third party to reconstruct the project from the files. Project documentation should not be vague.
Records useful in supporting or defending against time extension request and delay damages claims include:
- cost estimates;
- schedules and updates;
- daily reports;
- insurance policies;
- architect’s site visits reports;
- memoranda for record;
- job diaries;
- test reports;
- delivery receipts;
- payroll records;
- e-mails and faxes;
- submittal logs;
- updated file with approved submittals;
- Requests for Information (RFIs);
- change order requests and approved change orders;
- monthly billings and cash flow projections;
- meeting minutes;
- narrative schedule reports; and
- time impact analysis (TIA) reports with forensic schedule analysis (FSA).
It is important to critique your informational retrieval system as to project documentation and review the categories in which files are kept. How do you find paper work that covers project questions? Where is the file copy of all owner-signed contracts?