"Using experience, knowledge and technology to ensure success in the construction industry..."
Although I am out of town this week preparing for a trial, I promised a few attendees that I would share with them my webinar presentation last month. If nothing else, the first slides are entertaining. Let me know if you have any questions and I will chat with you on the other side.
One of my favorite leadership gurus, Michael Hyatt (CEO of Thomas Nelson Publishing) posted a few good recommendations a couple months ago about using templates for greater efficiency. Michael wrote:
For years, I have used the concept of “templating” to improve my productivity. The idea is that you create a template for any task that you find yourself doing repeatedly. So instead of “reinventing the wheel” every time, you do it once, save it as a template, and then reuse it.
In my construction litigation practice, I have used various templates to make my life easier during various stages of a construction disputes. This week, I want to share with you a couple of those templates.
The first one is a mechanic's lien information sheet (pdf) that outlines the background information that is needed for me to file a Notice of Non-Payment or Notice of Lien on behalf of a client. The type of information that I need to file a lien includes the following:
While this information appears to be a no-brainer request for those contractors who file liens on a regular basis, I have found over the years that my clients appreciate the template that I send them. This way, there is no confusion about what information I need from them and I am able to more effeciently help my client pursue their rights.
I have my Google reader set to search various blogs, news sites, and Twitter feeds to help me keep current with the latest trends in the construction industry. There remains one major problem: the words we use have different meanings for everyone.
Take, for example, my search of Twitter feeds (above) for Building Information Modeling (BIM). If you were to do the same search during a weekday morning, the majority of results would return various individuals involved in some aspect of the construction industry either praising or criticizing BIM. Now, if you were to do the same search on any given Friday or Saturday night, you might be surprised to get a varied assortment of results (and photographs) of individuals out for a night of partying. You see, BIM is also slang for "bimbo" or ... how do I say this ... a "lady with questionable morals"?
What's the lesson here? Did you click on this article because you thought it related to LEED or Green Buildings? It kinda does. It kinda doesn't. The lesson is that we live and work in a world where information spreads quickly. In addition, we have become informal in our communications through the use of email, texting and Twitter. (And in our personal lives, there may not be anything wrong with informality in our communications.)
However, the construction project is built on expectations and performance. Where those expectations are accurately and correctly reduced to a writing, the parties have a written contract. Where the parties use words that have different meanings (and both interpretations are reasonable), we now have an ambiguity. A judge or arbitrator will then be asked to interpret that ambiguity based upon any number of legal tools (i.e., parties' words and conduct, other writings outside the four cornings of the contract, industry norms, etc.). As the construction industry begins to employ new technologies, such as BIM, or new performance based goals, such as energy performance from a LEED certified building, then it becomes even more important that we use words that do not lead to miscommunication.
At the end of yesterday's webinar on Construction Documentation and Record Management, I was overwhelmed with so many good questions. Due to time constraints, I did not get a chance to answer them all. However, I promised to follow up on your inquiries ... below are some of your questions.
How long should project related documents be retained? Why would the timeframe for retaining documents be less than the jurisdiction’s statute of repose?
During the webinar, I said that this would depend on two factors: (1) any written retention policy in place; and (2) any advice given by your tax professional. As one of the participants asked in the chat questions, you may want to keep documents for as long as the statute of repose period in your particular jurisdiction. The statute of repose (like a statute of limitations) cuts off the right to bring action if not pursued within the applicable period. For example, the statute of repose for construction defects in Tennessee is four years after substantial completion, whereas Virginia has a five year statute of repose. Short answer: Keep ‘em 10 years, unless the statute of repose period is longer.
Is there a legal requirement for keeping project documentation and emails?
There are a few issues that are competing here: business issues and legal issues. Purely as a matter of business management, you want proper document controls in place … for the reasons discussed in the presentation. As a legal matter, the only “legal requirement” to maintain records is to make sure you comply with any document management/retention obligations that are required by the parties’ contract (public or private).
Do these project management tips apply to either/both public or private projects?
The lessons can be applied to both public and private projects. Of course, there may be different project controls in place or record management systems required for public contracts. For example, both Wisconsin and Texas now require use of Building Information Modeling (“BIM”) on certain public projects. Also, the general legal issues may differ if you are pursing a claim against a public owner because you may have the dispute resolved by an agency or administrative judge. However, most of the tips in the presentation are applicable to both public and private contracts.
Closing out a job: What recommendations do you suggest for Data Controllers in gathering electronic records from Project Managers, superintendents? Also--must such electronic files be printed and placed in a hard file?
During the webinar, I partially answered this question. Let me try again with the following recommendations for Data Controllers:
Does using an Owner supplied management tool (Site Manager) for daily diaries (i.e. with a State DOT) relieve you from expanding the level of detail in documentation?
No. Use as much detail as necessary to accurately describe what is required in the report (i.e., conditions, scope of work, installed quantities, labor, man hours, etc.).
As you highlighted the advantages of using a one environment/system between all parties involved, what is the main disadvantage of such application?
Cost … depending on the size of your company and project. If you do not have this infrastructure in place, the initial investment can be costly in terms of licensing fees, usage and management fees, and additional costs for trained personnel.
In regards to emails, what about if you have a disclaimer on the bottom that states that the info is only intended for the person addressed? Can those still be used by the other party?
Yes. No. Depends. If you are talking about emails between individual employees of the parties, then they can certainly be used as party admissions. If you are talking about emails to/from a non-party to the litigation (what may be called a third party), then you can probably use the information in the email and even the email itself if you can get around one of a few evidentiary objections.
The "before" picture often magnifies the significance of the "after" picture. In other words, if you had only seen the "after" picture below, then you may think, Wow! How did that crane find its way into that nice pool of water? Perhaps it somehow fell into the water?
Now check out the "before" pictures ... which tell you exactly what happened.
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Did you know photographs like the ones above are essential to the construction project management process? The term project management includes: (1) establishing procedures to manage, monitor and document work and progress; (2) ensuring regular flow of information for project control and coordination; and (3) creating contemporaneous, accurate and complete record of job conditions and problems including their impact to the project.
But why are proper records so essential for claims and disputes?
As a construction litigator, most of the claims that I handle involve breach of contract disputes. The majority of them involved one of the above three issues, which must be established by some type of proof (i.e., testimony or letter or written change order or photograph). Good record keeping will either prevent claims or preserve your rights.
When my kids break something in the house, they immediately begin pointing the finger at the "alleged" responsible actor. In the construction world, many times you will need to fix the problem first and then point the finger later.
I read an article today by Jack Broom in the Seattle Times that illustrates this point. The incident involved two massive tunneling machines that were damaged and awaiting costly repairs ... 300 feet below ground! The 17.5 foot diameter machines are supposed to be boring a 13-mile tunnel to take waste water to Puget Sound. Rather than the five-feet-per-hour pace that these machines should be boring through compacted wet dirt, they are dead stopped awaiting repairs. According to the article, more than 120 workers have been laid off until the machines are fixed and each day of delay adds to the owner's more than $1.8 billion in escalating costs. It may take another month or two before the machines can be fixed and start boring again.
This story represents what should be happening on the construction project gone wild scenario:
For now, [according to the owner's project manager], the county, the contractor and the machines' manufacturer are working together on "getting the fix in place and getting these tunnel-boring machines moving again ... It's in everybody's interest to complete this job as quickly as possible."
Although the parties are reportedly working to find a common solution to repair the two machines so that the contractor can complete the work, legal responsibility for the delays will need to be determined. Including the legal questions highlighted in Broom's article, a court may be asked to resolve the following:
For owners/developers, this incident is an example of how unexpected events on a construction project require a multi-phased approach to the problem. Your situation may dictate that you quickly assess the extent of the damage, determine a workable and cost effective solution and fix the problem first ... and leave leave the finger-pointing to later. So long as you reserve your rights in accordance with the notice provisions of your contract, the project completion will be better served in this approach.
Contractors should take heed that when your work is delayed for reasons beyond your reasonable control, there may be contractual and legal defenses to an owner's assessment of liquidated damages. Of course, the immediate goal will be to get the project back on schedule ... but remember the finger may be pointed at you sometime down the road.
This picture says 1,000 words ... not so good if you are the blasting contractor on a project. Well, believe it or not, there are always a wealth of emails and other documents produced in litigation that help "make the case" for the other side.
Take, for the example, the e-mail I found in the files of one superintendent entitled "PROJECT DELAYS" ... the words could not have been clearer ... "I think we need to begin to tell management that we are late. We also need to consult the claims team to determine how late we really are."
On another case, I found this nugget: "Although we should give them notice of this claim, let's wait until our equipment has left the port on their vessel before telling them."
Best Practices advises that you should have a written document management policy in place. This policy should define and describe the role of the following:
The advent of project management software packages (i.e., Prolog Manager, Expedition, plansandspecs, Microsoft Project), as well as other web based platforms, enhances document control by allowing the user to track revisions, store master files, and streamline the review process. However, the human element is still involved. Any policy must set appropriate boundaries and guidelines for the following:
Failure to formulate a policy that addresses these simple areas almost guarantees that the bad little email will get created and produced.
This occurred a few months ago:
“Honey, do you remember when we were talking about grace this week? Although you should eat all your food, I am going to show you some grace tonight. Even though you don’t deserve it, I am going to eat the rest of your chili for you.” How nice of me. I proceeded to spoon the rest of her chili into my bowl. Happy tummy!
Without skipping a beat, my inquisitive daughter asked, “Dad . . . You got any grace for my broccoli?”
For the rest of the story ... go to Christopher Hill's Construction Law Musings ... where I provided today's guest post. Chris, thanks for the opportunity to tell another funny story about my kids and the lesson learned about changes and claims on a construction project!
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