The First Three Rules of Construction

1. The First Three Rules of Construction Document, Document, Document! Presented by: Cheryl McBride Director Trauner Consulting Services, Inc.

2. Presentation Overview • Bid Phase Documentation • Electronic Documentation • Oral Communication & Documentation • Hard Copy Documentation • Summary • Questions and Answers FEFPA Summer Conference 2009

3. Why should we care about documentation? FEFPA Summer Conference 2009

4. Why should we care about documentation? Because it is an unfortunate fact that too many construction projects end up in some form of dispute that leads to mediation, arbitration, or litigation. FEFPA Summer Conference 2009

5. Why should we care about documentation? Most disputes can be traced back to one simple question: Who knew what and when did they know it? FEFPA Summer Conference 2009

6. Why should we care about documentation? Effective communication and documentation techniques increase the likelihood of resolving issues in a timely manner without resorting to the claims and litigation route. FEFPA Summer Conference 2009

7. If it’s not in writing,it didn’t happen. FEFPA Summer Conference 2009

8. Why should we care about documentation? When it comes to settling disputes, the best offense AND defense is a well-organized, well-documented project file. The facts speak for themselves. FEFPA Summer Conference 2009

9. Contemporaneous vs.After-the-Fact Documentation It’s easy to build the project on paper contemporaneously with field operations. It’s much more difficult and not nearly as effective to reconstruct project documentation after-the-fact. FEFPA Summer Conference 2009

10. Contemporaneous vs.After-the-Fact Documentation Proper project documentation begins before the beginning… the beginning of field ops, that is. FEFPA Summer Conference 2009

11. Contemporaneous vs.After-the-Fact Documentation Start your documentation during the bid phase. FEFPA Summer Conference 2009

12. Contemporaneous vs.After-the-Fact Documentation Create a pre-bid “observations & assumptions log” that accompanies the bid documents through the estimating phase of the project right up to the time the bid or proposal leaves your office. FEFPA Summer Conference 2009

13. Examples ofObservations & Assumptions • Opportunities for value engineering • Assumptions regarding the effect of inclement weather on the project • Notes from estimators about anything that, in their experience, seems strange or unusual FEFPA Summer Conference 2009

14. The pre-bid file should include: Every qualification, clarification, exclusion, calculation, pre-bid agreement with subs/suppliers, product substitution, and anything else that will be helpful to the operations staff. WHY? FEFPA Summer Conference 2009

15. The pre-bid file should include: Because the cumulative information assembled by the management and estimating staff during the bid phase of the project is invaluable to those who are tasked with building the project. FEFPA Summer Conference 2009

16. The key to a successful hand-off from office to field is: The accuracy, completeness, and reliability of the estimator’s work. Don’t fumble the hand-off! FEFPA Summer Conference 2009

17. Examples ofElectronic Documentation • E-mail • Schedules • RFI and Submittal Logs • Digital Photos • Videos FEFPA Summer Conference 2009

18. E-mail is: • Considered contemporaneous documentation • Every bit as important as hard copy correspondence • Admissible in legal proceedings FEFPA Summer Conference 2009

19. Treat incoming e-mail as you would a letter or a fax • print it • date-stamp it • file it! And don’t forget the attachment! FEFPA Summer Conference 2009

20. Treat outgoing e-mail as you would a letter or a fax Print it, date-stamp it, file it! Because e-mail is a quick and easy method of communication, it’s easy to lose perspective of the importance of the document. FEFPA Summer Conference 2009

21. This e-mail was sent by an owner to a contractor in response to a pay application submittal: “You make me sick. You are not only incapable of completing our project, submitting proper pay application or work on a professional harmonious environment, but you are always casting stone to others … I am no construction brain, but look at the project you built … So what do you call yourself?” FEFPA Summer Conference 2009

22. Electronic Schedules are: • Considered contemporaneous documents • To be preserved for posterity in their original form • The preferred source of information when analyzing delay claims FEFPA Summer Conference 2009

23. Electronic Schedules • Most scheduling software operates in “real time,” which means that any changes made to schedules are updated immediately. • Always save a pristine copy of your baseline schedule and every schedule update for the duration of the project. Never “WRITE OVER” original schedules! FEFPA Summer Conference 2009

24. RFI and Submittal Logs are… • Considered contemporaneous documents • Excellent management tools • Concise historical records Keep these logs updated on a daily basis! FEFPA Summer Conference 2009

25. Digital Photos and Videos are… • Considered contemporaneous documents • Precise records that capture an exact moment in time • An inexpensive and very effective documentation method FEFPA Summer Conference 2009

26. A Picture Is WorthA Thousand Words • Engineers, architects, project managers, superintendents, owners’ reps, construction managers… • Anyone with management responsibility should arrive at the jobsite equipped with a digital camera FEFPA Summer Conference 2009

27. Examples of situations in which we rely on oral communications: • Telephone conversations • Field meetings • Inspections with the AHJ FEFPA Summer Conference 2009

28. Oral Communications:Best Practices Whenever direction is given or received, or when something is agreed to or promised during a conversation, the best practice is to follow up with a written confirmation. FEFPA Summer Conference 2009

29. Here’s an example of a subcontractor confirming direction given by the general contractor: “Yesterday in the supers meeting, you told me to set up my scaffold and start laying block at the SE corner of the building. This morning out on site you told me to set up and start block at SW corner. The scaffold arrives today. I will set up at the SW corner per your direction.” Signed & Dated & Copied for Sub’s File FEFPA Summer Conference 2009

30. What do you do when you are given direction by someone not authorized to do so? FEFPA Summer Conference 2009

31. What do you do when you are given direction by someone not authorized to do so? Dear Owner, Today your interior designer was at the jobsite for a tour. She decided that the meditation room should not be painted fire-engine red as shown in the room finish schedule. She directed us to repaint the room a soft mauve color. However, since the room is already painted, there will be a cost to repaint the room. Please advise if you would like us to prepare a proposal for your review. Sincerely, Your Favorite Contractor FEFPA Summer Conference 2009

32. Examples ofHard Copy Documentation • Meeting Minutes • Daily Reports • Notes to File • Letters FEFPA Summer Conference 2009

33. Characteristics of properly documented Meeting Minutes: • Complete • cover all topics discussed • Inclusive • capture all comments on each topic • Accurate • no editorial or inflammatory comments • The facts and nothing but the facts FEFPA Summer Conference 2009

34. Meeting Minutes: Best Practices Always read Meeting Minutes immediately upon receipt! FEFPA Summer Conference 2009

35. Meeting Minutes: Best Practices What happens when meeting minutes are not accurate or omit information? If left unchallenged, inaccuracies and omissions in the meeting minutes become the permanent record. FEFPA Summer Conference 2009

36. Meeting Minutes: Best Practices When a response to Meeting Minutes is required: • Inform the author in writing before the “expiration date.” • Staple your response to the subject meeting minutes and file. • At the next meeting, make it an agenda item to discuss the inaccuracies and/or omissions. • If the inaccuracies and/or omissions are egregious, insist that corrected minutes be issued. FEFPA Summer Conference 2009

37. If it’s not in writing,it didn’t happen. FEFPA Summer Conference 2009

38. Daily Reports Daily reports dovetail with schedules and meeting minutes to document the project for posterity and should follow the same rules as meeting minutes. • Complete • Inclusive • Accurate • Factual FEFPA Summer Conference 2009

39. Every Daily Report should include: • Weather (rain gauge) FEFPA Summer Conference 2009

40. Example: Any claim for an increase in Contract Amount or Contract Time shall be in writing and shall include an analysis of the progress schedule and shall be delivered to the Owner’s Representative within 15 days of the occurrence giving rise to the claim … If the claim for an increase in Contract Time is due to adverse weather conditions, Contractor must provide documentation to support that the adverse weather condition giving rise to the claim was unusually severe for the location of the work and could not have been reasonably anticipated. FEFPA Summer Conference 2009

41. Every Daily Report should include: • Location of work on site • Work accomplished • Quantities, if applicable FEFPA Summer Conference 2009

42. Every Daily Report should include: • Workforce by trade and number of workers • Hours worked • Equipment in use • Idle equipment FEFPA Summer Conference 2009

43. Example: The Department will handle time extensions for delays caused by the effects of inclement weather differently from those resulting from other types of delays. The Department will consider these time extensions only when rains or other inclement weather conditions or related adverse soil conditions prevent the Contractor from productively performing controlling items of work resulting in: (1) The Contractor being unable to work at least 50% of the normal work day on pre-determined controlling work items due to adverse weather conditions; or (2) The Contractor must make major repairs to work damaged by weather, provided that the damage is not attributable to the Contractor’s failure to perform or neglect; and provided that the Contractor was unable to work at least 50% of the normal workday on pre-determined controlling work items. FEFPA Summer Conference 2009

44. Every Daily Report should include: • Potential delaying events • Significant events • Safety issues and safety/tool box talks • Meetings held on site FEFPA Summer Conference 2009

45. Every Daily Report should include: • Direction received from AHJ • Deliveries • Record of visitors • Author’s signature and date FEFPA Summer Conference 2009

46. Daily Reports • There is an art to creating good daily reports. Don’t assume that it comes naturally. • Field personnel must be trained to write accurate and acceptable daily reports. FEFPA Summer Conference 2009

47. Daily Reports Example 1: There was a storm water control project in California that required a large diameter tunnel be drilled through a mountain. The tunnel was lined with a spray-on cementitious material called shotcrete. The contractor’s foreman recorded the following in his daily report. “Good thing I had my goggles on. The nozzleman was an idiot – crete was everywhere. This is the third guy in a row they’ve sent me who has no clue what he’s doing.” FEFPA Summer Conference 2009

48. Three years later… After the project was completed and in use, the liner material began to de-bond and fall off. The owner sued the contractor for defective work. This one particular daily report became the “smoking gun” the owner’s legal team was looking for. FEFPA Summer Conference 2009

49. Daily Reports Example 2: The surveyor has billed us only one other time on the project back in December of last year. We requested at that time they provide signed daily time tickets for their hourly services (as required by their subcontract agreement). Signed daily time tickets is a means of verifying the hours on the job, they should be brought to our superintendent and signed daily. They have never provided signed daily time tickets, and never billed us again until the last day of August. No way for me to verify hours worked on the job without signed tickets. It’s their fault! FEFPA Summer Conference 2009

50. Daily Reports Example 3: • On 189 days, daily reports recorded that manpower assigned to the project was working within the project limits, but was not performing work associated with the contract scope of work. • On 180 days, the daily reports recorded that manpower assigned to the project had been sent offsite to other projects. • On 120 days, the daily reports recorded that one or more subcontractors were delaying the project. FEFPA Summer Conference 2009