RevayReport_The What and Why of Project Documentation

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The What and Why of Project Documentation

There are three primary reasons to

maintain comprehensive records:

1. Good Project Management

The importance of a healthy cash flow

goes without saying. It is

therefore necessary to understand

what documents are required to get

paid in a timely manner.

The contract will normally list the docu-ments to be included with progress

billings. These may include a statutory

declaration such as CCDC 9A or 9B,

test reports, work schedules and other

documents. Additionally, at the begin-

ning of a project, project managers

should inquire about unwritten practi-

ces which can help ensure prompt

payment, such as submission of pro-

gress applications to the consultant

for review prior to formal submission of

invoices.

Keeping appropriate records will sub-stantiate any request for payment in thecase of extras. The file for a changeshould include the change order,change directive, original and revisedquotations, time, material and equip-ment sheets, minutes of negotiations,contemplated change order from theconsultant, emails requesting or con-firming the work, site instructions from

the consultant, requests for informa-tion, and other information related tothe time when the change was execu-ted. The failure to find relevant docu-ments at a later date could lead tonon-payment or the inability to justify arequest for additional costs.

Work Schedules

While the preparation of schedulesrequires a manager to plan aproject and formalize the intendedsequencing and interdependencie

of various activities to achieve contr

completion, it is also critical that th

schedules be regularly updat

Updates should include the perc

complete for each activity as well a

forecast of the remaining work. A p

perly updated schedule should(1):

Determine which activities

behind or ahead of sched

and the necessary adjustments

Determine if the project will m

the required completion date

Provide a basis for adjustments

or corrective action necessary

achieve the completion date or

a revised target date, and

Provide a record as to why

completion date could not be m

Ron V. FernanRobert G. Keen

By:

Robert G. Keen, P.Eng., MBA, Senior Consultant

Ron V. Fernandez, P.Eng, GSC, Senior Consultant

Revay and Associates Limited Toronto

In every construction organization, be it large or small, a policy should be established regarding accurate a

complete documentation on every project from the pre bid stage of estimating to final project completion. Documentat

can take many forms and ideally serves to substantiate what occurred during the life of the project. Revay and Associa

is often asked about the nature and extent of documentation that should be kept. Recently Revay was retained by

Ontario General Contractors Association (OGCA) and Ontario Road Builders Association (ORBA) to develop a one d

training course on the subject of construction documentation, of which elements are presented in this Revay Report. T

course has been accredited by the Canadian Construction Association (CCA) for attendees applying for a Gold S

Certificate (GSC) designation.

This Revay Report is divided into two parts; the first deals with the importance of project documentation, and the seco

provides insight into the types of documents that make up a comprehensive project record.

Project Management and

Construction Claims Services

Published by Revay and Associates Limi

Volume 30 Number 1 January 20

Importance of Project Documentation


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When a dispute proceeds from preven-tion or avoidance by the projectmanager to third party neutralevaluation, mediation, arbitration orlitigation, the costs increase signifi-cantly and the parties ability to controlthe outcome decreases substantially.

The Toronto Construction Asso-

ciation recently issued a posterstating: Buildings are born on paper:on plans, in specifications and even

sometimes on the back of napkins.Buildings also die on paper: incompletetenders or contracts, poor estimates,

incomplete drawings, unpaid claims,rejected work, disputed change orders,unsubstantiated back charges, liqui-dated damages, arbitration, litigation

and sometimes lots of red ink. Properdocumentation and standardized paperflow procedures and processes cou-

pled with regular communicationbetween all parties will make yourprojects run more smoothly and assistin achieving a profitable bottom line.Clearly, the Old Masters knew whatthey were talking about when they said,He who has the best paperwork wins!

In a claim situation, good documenta-tion is imperative in order to:

1. Convince the other party of:

a. Contractual entitlement to a

contract adjustment b. The damages or losses as

quantified are real andreasonable

c. Which party caused theproblems based on thefacts demonstrated by theproject documents, and

2. Obtain an equitable adjustmentof the Contract Price andContract Time

3. Avoid arbitration and litigation

One of the great advantages of dailyrecords is that they provide an accountof observations and evaluations by keypersonnel in the form of a businessrecord. If and when a dispute comes totrial, a regularly kept business recordis generally admissible as an exceptionto the hearsay rule and can provide avaluable evidentiary foundation for theclaim.

For a claim to be effective, it must meet

Productivity Monitoring

Labour productivity can have a majoreffect on the profitability of a project.Measuring productivity provides theopportunity to correct problems arisingfrom both internal and external causesin a timely fashion(2).

While it is recognized that mostaccounting systems can provide directcosts and labour hours expended on aweekly or monthly basis, an actualmeasurement of physical progress onsite or in the fabrication shop is the keyelement necessary to evaluate produc-tivity. Unfortunately, contractors rarelyrecord the actual measurement ofphysical progress although they should.

Data for Future Projects

Project documentation can provide

data to assist in estimating, planningand scheduling future projects.

2. Contract Close-Out

Substantial Performance of the Work

From a contractors perspective, theobjective of achieving SubstantialPerformance is often to recover hold-back funds. In advance of applying forSubstantial Performance, it is advisableto request a pre-takeover meeting withthe owner and its consultants to verifyrequirements that may not be detailedin the specifications. In addition tocompletion of the work as per thedefinition of Substantial Performancein the Construction Lien Act, othertypical requirements for SubstantialPerformance are:

Commissioning and balancing

reports

Turnover of operation and

maintenance manuals

Labels on all systems andequipment

System demonstration and

training of owners employees

Demonstrations to authorities

having jurisdiction

Occupancy permits, and

Formal application for

Substantial Performance

The owner may retain partial funds

from the total holdback until outstan-ding deficiencies are corrected, orwithhold funds that it feels would berequired to have the deficiencies cor-rected by others if the contractor didnot complete the contract.

Total Performance

Generally, the specifications will pro-vide a list of close-out documentsrequired to achieve Total Performance.

Again it is advisable to meet with theowner and its consultants to verifyrequirements for Total Performance.Typical requirements are:

Turnover of spare parts

Completion of deficiency

correction

Provision of as-built marked up

drawings

Turnover of warranties

Final statement of accounting

Final change orders agreed and

issued

Final invoice issued, and

Agreement on document

ownership and retention in

storage

3. Support of ConstructionClaims

In addition to maintaining a neat, up todate and well organized record keepingsystem as part of the day-to-day rou-tine, all contractors must be aware thatsome aspect of the construction pro-

ject could end up in a claim situation.Further, the contractor must bear inmind that the successful resolution ofthe claim depends on his ability topresent it in a convincing fashion and

to support his position with the properdocumentation.

The detail and general character ofsuch records, and the cost to maintainthem, depend largely on the complexityof the contract work involved. However,it must be understood that construc-tion claims can be virtually impossibleto support without proper project docu-mentation. Further, field personnelmust be properly trained to thoroughlyunderstand what, how and when todocument the files.


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the requirements of entitlement, causa-tion and reasonable damages. Factssupporting each portion of the claimmust be validated with documentationthat may be discoverable if a claimproceeds to arbitration or litigation.Contemporaneous project documenta-tion can establish the facts supportinga cause and effect relationship between

the alleged actions or inactions of theother party and the damages incurred.

Frequently, causation and quantifica-tion can be best described usinggraphic forms such as scheduleand productivity analyses. If accurateconstruction schedules are maintained,the compensable delay period canbe determined using a forensic delayanalysis technique such as theimpacted as-planned analysis,colapsedas-built analysis, or windows analysis

(sometimes referred to as the snapshotmethod)(3).

Claims for loss of productivity of labouror equipment can be calculated usingthe following methods: total cost,industry studies, and the measuredmile / differential method.

While the total cost method is theeasiest to calculate, it is also the leastaccepted and subject to several chal-lenges. Industry studies can provideguidelines for estimating, but as they

do not relate to the project underconsideration, they are easily chal-lenged. The most accepted method,the measured mile, requires not onlygood accounting data, but also con-temporaneous recording of progressmeasurements on site.

Record Keeping Protocol

It is recommended that all contractorsestablish simple but complete recordkeeping and reporting procedures withforms and examples for use by the

project team. This ensures both consis-tency and adequate collection of infor-mation. This section of the report out-lines the types of records that are typi-cally maintained on well-documentedprojects and provides guidance ongood record-keeping practices.

Follow Good Basic RecordKeeping Practices

Start with clear, concise writing.Describe issues, items to be clarifiedand extra work so that someone unfa-

miliar with the topic will understand. Beconsistent; use the same terms toavoid confusion.

When referring to earlier discussions,note the date, individuals involved, andgeneral or specific discussions andagreements. References to writtendocuments, however, need only iden-

tify the document in a precise and clearmanner.

Identify and report all important infor-mation. Record completion of majormilestones, the start and finish ofscheduled activities and any significantvariations from plan.

Use Rapid WrittenCommunication

Confirm verbal communications inwriting. Fax or email copies of anymailed correspondence to ensure thatthe owners representative, designers,subcontractors or vendors receive itimmediately. Use speed memos andrequest for information (RFI) forms tocommunicate with the owners repre-sentatives in the field. Verify that super-intendents are using the forms torequest information or to confirm direc-tives and that copies are submitted tothe office.

Identify and Date all Documents

Require project personnel to initial, titleand date all documents, including handwritten notes of telephone conversa-tions, calculations, etc., in order toidentify who created the document.The title or description of the documenthelps to explain what the documentrefers to and places the information incontext. The date is essential to esta-blishing a chronology. Without a timecontext, a fact or statement of under-standing or position may be meaning-less. Date all signatures on contractsand change orders to identify when the

parties agreed to the terms and condi-tions, which may become crucial to aclaim. Furthermore, all documentsshould be date stamped upon recep-tion.

Establish Filing Procedures

Set up a coded filing system for projectfiles and publish it for all personnel withaccess to the files. Cross file docu-ments by referencing topics or claimissues. A routing slip or stamp facili-tates review of incoming and outgoing

documents.

Implement New Technology

Project specific websites allow pject participants to communicinstantly, access schedules and Cdrawings, maintain RFI and submilogs as well as post or view digital phtographs. Websites can be custcreated or built using a commerpackage with built-in menus, forms aroutines.

Types of Project Documentatio

The standard classifications of projdocumentation generally consist of following, but can be added to, depding upon the special circumstancesany given project:

1. Time Records

Accuracy in charging time to ccodes is essential and complianmust be verified by the superintendand payroll clerk. Some foremen averse to writing any more ththe essential, and do not break contract work down into the procost codes. It is important that foremknow what cost codes to use and wcomprises extra work. Cost codshould be set at the beginning a project and remain the sathroughout.

2. Superintendents Daily Reports

Field superintendents daily reports commonly accepted as being mreliable than documents prepared office personnel. The superintendeactually observe and supervise work and are generally inclined to accurate and complete. However, various reasons some superintendedo not maintain complete recorEven when records are maintainproblems might be exaggerated

understated. Either tendency shoulddiscouraged.

The failure of field superintendentscomment on impacts and problemsdiaries and daily reports can resultthe rejection of claims; therefosuperintendents should record impacts. Managers should verify tall recorded information excludes inpropriate comments or posturiWhen noting problems, superintdents must state whether the probleare actually impacting the work or s


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ply threatening to do so in the future.Otherwise, the comments may be usedby the owner to prove non-excusabledelay or concurrent delay.

3. Original Schedule, ScheduleUpdates, Short IntervalSchedules and ProgressReports

Project schedules should be preparedusing the critical path method (CPM) orbar charts on smaller projects. Themaster schedule should be markedweekly with a status line. In addition,monthly updates should be generated,and compared with the original ortarget schedule.

4. Photographs and Video

The regular and frequent use of pho-tography to document the project files

is an important tool for the contractor.Photographs establish the actual con-ditions of the project construction at agiven time prior to the work beingcovered up. A photographic record canpreclude allegations based on hearsay,and can be preserved as potential evi-dence in the settlement of disputes.

Photography should depict:

Construction progress

Technical and specific details

Types of materials

Installation methods

Site conditions

before and during the project

Damages to installations

Each photograph should identify:

Time, date, month and year

Project title

Photograph description

Direction of camera

Name of photographer

Photograph number

5. Minutes of Meetings

Schedule weekly job site meetings withfield superintendents, foremen and allactive subcontractors, and weekly ormonthly meetings with the owners rep-resentative and key subcontractors.

Several short meetings are more effec-tive than one long meeting; a tightfocus on the agenda is key in this

regard.

The contractors representative shouldbe prepared to document the following:

Date and time

Location

Name and employer of eachperson in attendance

Topics discussed

Conclusions reached

Important statements made andthe name of the person makingsame

If other reports are preparedfrom handwritten notes, theoriginal notes should be keptfor the permanent job records

Minutes of meetings prepared by otherparties should be verified to ensure

accuracy. Discrepancies should becommunicated immediately.

6. Correspondence andTransmittals

For successful communication, corre-

spondence must be clear and concise.

Each letter should be limited to onetopic with a clear reference line. Unless

absolutely necessary, correspondenceshould not exceed one page.

All correspondence from any partyinvolved should be serial numberedwith a different letter prefix to

indicate the source of the letter;this greatly simplifies referencing cor-respondence.

A correspondence log is a necessity.

Retain copies of all correspondencein to/from files as well as a copy in theappropriate subject file (i.e. concrete,soils, windows, claim, etc.) When a

potential claim is identified, an issue fileshould be set up and copies of allrelevant correspondence posted

therein.

Transmittals must be dated and must

clearly describe attachments. Unlessunusually voluminous, staple allattachments to the file of the

transmittal.

7. Facsimiles

Faxes save time over letters in prepara-tion and transmittal and usually get aquicker response. Follow up with aprinted copy only if needed or if attach-ing something physically transmitted.

Fax all correspondence to the owners

representative, designer, subcontrac-tors and vendors. If using a fax modemin your computer, you can composeand transmit printing a hard copy foryour files.

8. Email

Email has become a very prevalentform of correspondence, and is usuallyread on a priority basis. File printedcopies of all incoming and outgoingemails.

Care must be taken in the drafting ofemail. According to the legal commu-nity, both current and deleted email isproducible if and when you, as a con-tractor, are engaged in litigation(4).

9. Requests for Information (RFI)

Request for Information (RFI) forms areused for obtaining clarification on theproject design drawings or other issues.RFI forms should be issued to all fieldsuperintendents. Ensure that they arebeing used to request clarifications or

to confirm oral questions and arerecorded in a log.

RFIs should ask clear questions andreference the appropriate specificationsections or drawing details. If a timelyresponse is critical, note the conse-quences of a late reply. Forward rele-vant responses to all affectedsubcontractors and vendors.

10. Extra Work Orders

Force account work is directed extra

work without a price agreement, due toeither undefined scope or inability tonegotiate price, and is paid on a timeand material basis. The work is docu-mented daily on preprinted forms,which are signed by both the contrac-tors superintendent and the ownersrepresentative.

When all work is complete, the labourand equipment hours and materialsused are priced, subcontractor chargesare added and costs are subtotalled,marked up and paid as a change order.


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Force account forms can also be usedwhere the work is not clearly acknowl-edged as extra work. In such a case, itmay be better to title the form a WorkOrder Form. The use of a preprintedform, the title Work Order or ExtraWork Order instead of a change orderrequest, as well as the assumption thatthe work is reimbursable may avoid

disputed entitlement.

11. Change Order Files

A separate file should be set up foreach issue as soon as it is identified asa potential extra work item. Start withthe document first identifying thechange. This may be a notice of changeletter, RFI, request for proposal fromthe owners representative, architectssupplemental instruction or otherdocument. A complete file includessketches by the designer or the project

team, requests for proposals from theowner, completed extra work orderforms, the change order requestwith all supporting documentation,correspondence and other negotiationrecords, force account records andcopies of cost reports with the costcode(s) assigned to the change, etc.

Extra work files simplify change orderrequest and claims preparation, espe-cially if a brief narrative is prepared foreach that notes the background, sum-marizes conversations and otherunwritten communication, referencessupporting documents, and includescomputation of delay and costs.

12. Information Logs

Information logs are essential to effec-tive change management as they fulfillthe following functions:

Tracking of submittals, requestsfor information, change orderproposals, etc. to determinewhen action is needed to

correct problems and preventdelays

Communicating the status andimportance of administrativeactions to the owners representative, designer, subcon-tractors and others

Providing basic informationneeded to prepare claims forlate submittal review, impactfrom multiple design errors andomissions, late response to

requests for information, etc.

Information logs can be created using aspreadsheet, word processing soft-ware, database management software,or a commercial package. All eventdates should be recorded there: recep-tion from the subcontractor or vendor,submittal to the owner, return from the

owner, and forwarded to the subcon-tractor or vendor. Information to beentered includes a clear descriptivetitle for the item, the specification sec-tion and drawing number or detailaffected, the location on the project,the initiator and the resolution.

It is most effective to maintain thefollowing logs:

Submittal Schedule Log

Submittal schedules are crucial tomaterials control and must be estab-lished on all projects. They identify allrequired submittals (such as shopdrawings), who is to prepare them, duedates, and where they are described inthe specifications. Require subcontrac-tor submittal schedules within 30 daysafter notice to proceed, as their prepa-ration often reveals designer errors ormaterial availability problems.

Request for Information(RFI) Log

RFI logs track requests for clarification.They should record the RFI number, atitle/description, date initiated, initiator,response date, summary of response,impact, further action if required (e.g.change order), the change orderrequest number, if one is submitted,and a comment if appropriate.

RFI logs can be a powerful indicator ofdesign and administration problems by the sheer number, the time lapsefrom initial question to resolution,the relative importance of the issue,

and especially by their impact on theschedule. Exclude trivial issues fromthe RFI process; they cause theowners representative and designer todownplay future requests and degradethe value of the information forpreparing a claim.

Change Order (CO) Log

Change order logs are essential fortracking the link between an RFI issuedby a contractor, to the issuance ofa proposed change notice by the

owners representative, to the issua

of a change order. It is crucial to doment this timeline, as it becomes v

valuable in supporting a contractoclaim for extended duration co

based on slower than reasonaadministration of changes by

owners representative.

13. Cost Accounting Reports

Cost accounting reports should inclu

weekly labour reports comparactual productivity (units of work

place per labour hour) and unit cwith budgeted productivity and

cost. They should also include moncost comparison reports by c

category that compare actual unit cowith budgeted unit costs and genledger reports with detailed transact

and other reports as required.

14. Contract Documents

Maintain a master copy of the pland specifications with all addenda achanges posted. Save copies

superseded drawings, specificatsections, designers field sketch

drawing issuance logs from designer, etc.

Maintain a separate set of as-b

drawings with all changes from design drawings marked in red. Th

are normally turned over to the owat the end of the project. Additiona

maintain copies of all subcontrapurchase orders, bonds, insurancertificates, etc.

15. Shop Drawings and Other

Submittals

Maintain copies of all submittincluding stamped shop drawinalong with the schedule submittal

described in Section 12. Review aapprove subcontractors shop dra

ings before submitting them to owners representative.

16. Other Records

Other records that should be matained include pre-bid documents, e

mate and bidding files, other pre-cstruction documents (e.g. regard

bonding), field records such as delivtickets, safety reports, accident repo

weather records, and documereceived from subcontractors or

owner, etc.


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7. Subcontractor Records

mproved subcontractor recordkeepingwill facilitate the documentation ofchange orders and improve the sub-contractors recovery for extra work. Itwill help avoid problems with unpaidsubcontractors who dont perform ordefault on their contract.

Require subcontractors to submit dailysubcontractor reports similar to thedaily superintendents reports andobtain their input into the schedule.Require a submittal schedule, updatedmonthly, with material delivery datesprior to their first progress payment.Late delivery of subcontractormaterials is a frequent cause of projectdelay but can usually be avoided byclose tracking of submittals andmaterial procurement.

8. Reports to CompanyManagement

mproved communication betweeneld personnel and company mana-

gement is essential. Managers need to

he Revay Report is published by Revay and

Assoc iates Limited, a national firm of

onstruction and Claims Specialists, assistingwners and contractors in achieving profitable

nd trouble free construction projects.

ontents may be reproduced, with a credit as

o source appreciated. Your comments and

uggestions for future articles are most wel-

ome.

dition franaise disponible sur demande.

lease advise the Montreal office of any

hange of address.

REVAY OFFICES:

MONTREAL

4333 Ste. Catherine St. WestSuite 500MONTRAL, Qubec H3Z 1P9Tel.: (514) 932-2188Fax: (514) [email protected]

TORONTO

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OTTAWA

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Revay & Associates Inc.

1105 N Market StreetSuite 1300WILMINGTON, DE 19801Tel.: (302) 427-9340Fax: (302) 651-8426

http://www.revay.com

Publications #40042162

1. Additional information regarding scheduling and monitoring can be obtained from the Revay Report, Vol. 19 No. 3, October 2000, Scheduling &

Monitoring for Successful Projects (available at www.revay.com).

2. Additional information regarding monitoring job site productivity can be obtained from the Revay Report, Vol. 19 No. 2, May 2000, Monitoring Job-Site

Productivity (available at www.revay.com).

3. Additional information regarding data required for a proper delay analysis can be obtained from the Revay Report, Vol. 13 No. 2, June 1994, Delay Analysis

Revisited (available at www.revay.com).

4. Additional information regarding emails can be obtained from the Revay Report, Vol. 24 No. 1, April 2005, E-mail an Emerging Risk in Construction

(available at www.revay.com).

* Any views expressed in this article are those of the authors and may not necessarily reflect the views of the company.

receive copies of many of the above

records, in addition to formal manage-

ment reports. Management reports

should be submitted monthly with the

monthly cost accounting reports and

progress payment request. Brief

weekly reporting is recommended if

company managers do not perform

weekly site visits. One or two pages are

usually sufficient for most projects.

CONCLUSION

The key to successful claims presenta-

tion and resolution requires the con-

tractor to understand, in detail, the

factual issues of the claim, and to be

aware of and take into consideration

the many pitfalls, both factual and

legal, that must be dealt with and over-

come in order to prevail.

Through the use of proper documenta-

tion, specifically in the areas of sched-

uling, costing, and record keeping, a

judge or arbitration panel will be more

easily convinced of your entitlement

to the claim. However, it must be

remembered that documentation alonewill not ensure your success; it will takea concentrated effort on your part topresent the facts in a most comprehen-sive and convincing manner.

RevayReport_The What and Why of Project Documentation

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Transcript of RevayReport_The What and Why of Project Documentation