Norman F. Jacobs Jr., CSI, CPE
In this conclusion of a two-part look at project management, the author examines the importance of documents (the best way to avoid construction problems), along with a look at forensic documentation analysis (FDA).
Prudent project documentation provides a history of events, actions, and inactions during the execution of the contract work. Timely and adequate project documentation reflects the parties’ intention and performance during the contract period. The documentation provides the ‘plan’ for accomplishing the work, a history of contract modifications and interpretations, and changes to the planned critical path method (CPM) schedule resulting in change orders and time extensions.
The benefits derived from having proper documentation include facilitation of effective management practices and providing a base for avoiding and resolving disputes. It is important to ensure the documents are not ambiguous.
The project manager must manage all documents, including:
- insurance policies;
- submittal logs;
- daily reports;
- e-mails and faxes;
- CPM schedule information (including all monthly updates);
- meeting minutes;
- change orders;
- requests for information (RFIs);
- architect’s site visits;
- as-built drawings;
- equipment logs;
- bid estimates;
- testing reports; and
- time extension requests and approvals.
Documents included in the owner’s bid package (e.g. drawings, specifications, soil data, asbestos data, general conditions, special conditions, specific instructions, and the contractor’s calculations and bid preparation documents) are generally admissible evidence as to what was intended by a construction contract.
Forensic documentation analysis (FDA) is a critique of the project manager’s responsibilities throughout the life of the project. It defines adequate documentation and will exercise one’s cognitive skills.
Documentation is required at every project level. In a typical claim scenario, an issue arises on a project and a couple of meetings take place and positions are laid out. Resolution does not occur and tempers may flare. So what happens next? Usually, a letter-writing campaign ensues.
The architect, engineer, and contractor start carefully crafting correspondence, every word painstakingly reviewed. Sometimes, the letters are even received by counsel, which is a good idea, especially when the stakes are high and relations strained. Well-crafted letters are a vital part of the project record, especially during litigation. However, one should consider for a moment the project participants who wrote them and for what purpose—and then ask, will claims notice and response letters be taken as sole-source gospel or as an accurate portrayal of the events of the project? Or will they be viewed as each site posturing in anticipation of litigation?
The requisite players associated with the owners, architects, and contractors are required to develop the project risk management plan (RMP), which serves to identify, analyze, manage, and control all risk that could have adverse impacts to the budget and schedule throughout all phases of the project’s lifecycle. It also provides a useful road map that can be used by the project manager and the team to assist them in successfully completing the project.
The astute project manager shall list the objectives of the project’s risk management process. For example, some objectives could be:
- maximize the probability of achieving successfully the projects objectives within the planned schedule;
- identify and access project risk threatening the project’s progression, as well as the adverse impact that these could bring up throughout the project lifecycle; and
- generate risk mitigation plans as the basis for determining the budget needed to cover such plans, as well as the allocations of these resources throughout the project lifecycle.
Risk management methodology
The contract administrator or the project manager must define the methodology to be used to identify and manage such risks threatening the goals of the project; one such strategy is the Monte Carlo risk simulation, which could be an optional tool to be implemented in the development of the RMP.
One should develop a risk management schedule with milestones, taking the CPM as a reference. It should include such references as reviews, meetings, assessment milestones, and other significant events. (As mentioned in part one, it is important to consider circadian rhythms as they relate to human resources.)
One should be aware risk management is the administration of events or activities that may or may not occur, and planning for their possible range of impacts to the project. Due to this probabilistic, futuristic, and speculative nature, many project managers and teams feel uncomfortable with the whole topic and avoid it altogether.
For years, sedulous project managers have been taught to identify, quantify, and develop strategies for dealing with risk, yet risk management continues to be one of the weakest areas of construction project management.
The project manager’s risk plan must be integrated with the project game plan. This means the risk budget has to be incorporated into the project CPM schedule, cost budget, and staff plan. Too many project managers have a separate file, tool, and process for managing risk apart from the rest of the project. As a result, the risk plans are often forgotten, rendered ineffective, used only for historical purposes, or to prove compliance with corporate policy. Additionally, it is too easy for management to cut a risk budget when it is completely isolated from the project game plan or lumped into one line item on the project budget.
Using a simple and practical approach, project managers can build realistic risk plans and budgets, integrate them into the project CPM schedule, and reduce the probability it will be slashed by management. One must critique the work breakdown structure (WBS), and then identify ways to deal with risk.
Taking early action to reduce the probability and/or impact of a risk occurring on the project is often more effective than trying to repair the damage after one has happened. Adopting less complex processes, conducting more tests, or choosing a more stable management program are examples of mitigation actions. This strategy may also require prototype development to reduce risks.
In the company manual, the project manager should define who is responsible for the management and maintenance of the submittal log. Submittals in construction are shop drawings, material data, samples, and product data. The submittal process affects cost, quality, schedule, and project success. An approved submittal authorizes quantity and quality of a material or an assembly to be released for fabrication and shipment. It is important to include submit, approve, fabrication, and delivery activities on the CPM schedule.
The contract administrator and project manager have many other items to manage, ranging from minutes of weekly and monthly meetings and insurance to testing, disruptions, and project closeout. It is important he or she manage all risk and construction problems, even those related to the adversarial position between the architect and a contractor.
Norman F. Jacobs Jr., CSI, CPE, is a principal at Jacobs Consultant Services, which offers cost management, schedule control assistance, project management, and claims preparation/negotiation. He has also served as an arbitrator, owner’s representative, and expert witness in arbitration and court involving multi-million dollar projects. Before creating his current organization, Jacobs provided design-build, construction management, and general contracting for developers, government agencies, and private clients for more than 30 years. He has served as the president of the Construction Specifications Institute (CSI) Richmond Chapter, chaired the Virginia Associated General Contractors (AGC) Documents Committee, and been a long-time member of organizations including the Project Management Institute (PMI) and the American Society of Professional Estimators (ASPE). He can be contacted via e-mail at email@example.com.