Accurate project documentation is both assurance and protection when it comes to claims

May 3, 2019

This column published as "Get It Right" in May 2019 issue

Nothing’s more frustrating to a contractor’s legal team than being tasked with drafting and/or presenting a claim and having no reliable project documentation to provide the necessary facts.

In some instances, the team becomes involved in a claim issue early enough to discover bad reporting and to instruct field personnel on the proper methods to document impacts. In other instances, it is too late, and everyone must scramble to re-create an accurate record of construction. Rarely is this effort successful.

Anyone who has prepared a claim, big or small, knows its success or failure will depend largely on the contractor’s ability to convince the public entity that events occurred that were not the contractor’s responsibility under the contract, and the contractor incurred additional costs and/or the time for constructing the project increased as a result. Documenting precisely the events giving rise to the claim, as well as demonstrating the cause-and-effect relationship between such events and adverse impacts experienced by the contractor, is of paramount importance.

Too often, effective field reporting is viewed by project foremen and superintendents solely as a means of documenting equipment and labor hours so that hourly personnel receive their paychecks the following week. Contractors must insure that complete and accurate reporting is as much a part of foremen and superintendents’ job responsibilities as productivity is. Next, they must provide the proper instruction on sound reporting practices so that providing detailed information on daily reports and in diaries becomes a habit.

Training in field documentation should impress upon employees the need to report the “what, when, where and how” of unforeseen events in field reports. The “what” should describe in detail the unforeseen event. The event might be a differing site condition; a stoppage of work; an order or instruction issued by the public entity inspector or field representative; or an interpretation of the contract or field inspector decision with which the contractor disagrees.

The “when” adequately states the time of day of the precipitating event and describes the timing of the impacts from the event. Often, the impacts of an unforeseen event go on for hours, shifts, weeks and even months following such an event. Subsequent reports should continue to describe the impacts experienced on a daily basis until they conclude.

The “where,” perhaps the most overlooked aspect, describes the precise location on the project where the event and its impacts took place. In the case of storm drainage or utilities, the specific structure or run designation should be identified. In the case of grading-related events or other roadside development work, the “where” should include the precise station or station range. If a major structure is involved, the report should identify the abutment, pier, shaft, etc., involved, or, alternatively, if a pour schedule has been prepared, the pour number should be identified.

Lastly, the “how” must provide the critical link between the event and the impact and thus explain how the event resulted in a particular impact. To illustrate, if an unforeseen subsurface obstruction has substantially slowed utility production, the report should describe in detail how the obstruction resulted in decreased production (e.g., “production ceased for three hours while laborers hand-excavated around a gas line that was not shown on the plans and which ran parallel to proposed storm drain within 2 ft.”) Consider stating in the report the production that could have been achieved if not  for the problem encountered.

Even absent an unforeseen event, daily reports should typically include detailed information on the work being performed, its location and actual production achieved. I often tell field personnel to assume they are the eyes and ears of the project scheduler. The information in their reports should be detailed for the scheduler to accurately maintain the schedule without having to visit the project. Indeed, in many claim scenarios, as-built schedules must be verified as to their accuracy; reporting from crews performing the work is the only reliable means of verification.

Lastly, contractors must understand that the training described above will be futile unless they have developed the necessary daily report forms to enable field personnel to properly carry out their reporting functions.

About The Author: Caudle is a principal in Kraftson Caudle LLC, a law firm in McLean, Va., specializing in heavy-highway and transportation construction. Caudle can be contacted via e-mail at [email protected].