Construction Documentation and Record Management:

Presented by Matthew J. DeVries

Smith Cashion & Orr PLC

Get it Right to Prevail in Disputes

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Possible Titles

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Baseball Gone Wild!

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Tour de France Gone Wild!

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“Teenage Son” Gone Wild!

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“Adult Son” Gone Wild!

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“Ferdinand the Bull” Gone Wild!

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“Construction Projects” …

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… Gone Wild!

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The End

• Questions?

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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

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Who Am I?

• Construction Attorney, LEED ® AP, Husband, Father of 5, Blogger, Author

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1. Project Management Procedures

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1. Project Management Procedures2. Project Documentation

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1. Project Management Procedures2. Project Documentation

3. Critical / Non-Critical Documentation

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1. Project Management Procedures2. Project Documentation

3. Critical / Non-Critical Documentation

4. Legal Issues / Litigation Concerns

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1. Project Management Procedures2. Project Documentation

3. Critical / Non-Critical Documentation

4. Legal Issues / Litigation Concerns5. Examples of Projects Gone Wild

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The Conclusion

• To promote effective projectmanagement procedures

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The Conclusion

• To promote effective projectmanagement procedures

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

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The Conclusion

• To promote effective projectmanagement procedures

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

• If you end up in court …– Minimize exposure– Prevail in your disputes

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Project Management Procedures

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

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Project Management Procedures

• Establish lines of communication– Regular job meetings– Field coordination meetings– Design coordination meetings

• Address changes• Address progress• Address quality

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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

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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

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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

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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

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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

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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

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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

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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 importantfor trustworthiness

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Critical Project Documentation

• Time sheets– Document manpower

• Number of manhours worked• Work performed

• Accounting records– Must prove damages

with reasonable certainty– Invoices

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Critical Project Documentation

• Photographs– Monitor, depict and

preserve conditions– Pictorial diary of project (weekly or monthly)– Document defective work or problem

conditionsNote pertinent information on back• Date, time, location, condition depicted,

photographer• Create photo log

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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

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Non-Critical Documentation

Personal emails, IMs, or blog trails

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Non-Critical Documentation

Personal emails, IMs, or blog trails

Inappropriate copies

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Non-Critical Documentation

Personal emails, IMs, or blog trails

Inappropriate copies Website traffic logs

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Non-Critical Documentation

Personal emails, IMs, or blog trails

Inappropriate copies Website traffic logs

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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?

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Software Packages

• Prolog Manager/Proliance

• Expedition• Plans and Specs• Bentley Systems Inc.• Microsoft Project

– Self hosted – Application service

provider environment

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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

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Project Mgt. and Exec. Uses

• Procurement control• Cost control• Document

management• Field administration• Reports• Correspondence

documents

• Daily reports• Contracts• Integration with

SureTrak and Primavera

• Change orders• Purchase orders

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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

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Legal Issues

What is the “put it in writing” rule?

What is hearsay? Non-hearsay? Exceptions?

What about paperless project?

Can we shred documents at the end?

Email versus Letter versus Change Order?

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“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

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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.”

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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?

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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?

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Duty to Preserve

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Duty to Preserve

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Duty to Preserve

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Duty to Preserve

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Sample Documents

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Sample Documents

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Sample Documents

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Sample Documents

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Sample Documents

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Sample Documents

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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

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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.

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E-Mail: Bad

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!!!!

From: Contracts Manager about Upper Management

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E-Mail: Worse

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?

From: Upper Management about Contracts Manager

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E-Mail: The Worst

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

From: Upper Management to Contracts Manager

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E-Mail: Dirty Words

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.

Internal Correspondence

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E-Mail: Dirty Words

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.

Internal Correspondence

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

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Daily Report

4) MISLABLED PARTS STILL ONGOING. LOST TIME IS MOUNTING UP. LAYDOWN AREA HAVING A HARD TIME DUE TO MISLABELING.

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Deviation Report

Description: Labor Availability

Root Cause: Missed in the original estimate.

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Change Order Log

Engineer$311,412$311,4125/7Electrical6Engineer0$12,4505/7Additional filters5Engineer0$105,9905/7Additional pumps4Missed quantity0$58,9053/14Curb3Missed quantity0$92,8963/14Rebar2

Missed quantity0$114,4503/14Rebar masonry1

NotesPendingAmountDateItemNo.

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Project Photos: Organization

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Photos: Assist in Project Administration

Location:Nashville, TN

User:Owner (out‐of‐town)

Feature:Progression photos used by project members during constructionSource: Multivista Construction Documentation

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Location:Memphis, TN

User:General Contractor

Feature:Aerial photos used to establish entitlement to installed quantities

Photos: Proof of Installed Quantities

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Photos: Impeachment of Witness

Location:Memphis, TN

User:General Contractor

Feature:Aerial photos used to contradict witness testimony on scope of completion

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Photos: Proof of Responsibility

Location:Nashville, TN

User:General Contractor

Feature:Date of photos used to establish insurance coverage dispute

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Photos: Defective Work

Location:Atlanta, GA

User:Owner & General Contractor

Feature:Walk‐through photos used to show defect and standardSource: Multivista Construction Documentation

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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

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Photos: Recover Regulatory Fines

Location:Raleigh, NC

User:Owner

Feature:Pre‐construction site‐survey photos used to identify responsible party for local fines 

Source: Multivista Construction Documentation Not actual project photo

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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

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Photos: The Smoking Gun

(Bad photo if you are the blasting contractor!)

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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

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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

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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

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Future Issues

• Green Construction– LEED ® credit templates, worksheets and

back-up documentation– Documentation of energy performance

• Social Media 2.0 – Twitter– LinkedIn– Facebook

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Questions?

Matt DeVriesSmith Cashion & Orr PLC231 Third Avenue North

Nashville, TN 37201(615) 742-8577 direct(615) 354-3681 cell

mdevries@smithcashion.com

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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

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Invoke Dispute Resolution If Necessary