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

2. FEFPA Summer Conference 2009 2 Presentation Overview 1. Bid Phase Documentation 2. Electronic Documentation 3. Oral Communication & Documentation 4. Hard Copy Documentation 5. Summary 6. Questions and Answers

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

4. 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.

5. 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?

6. 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.

7. FEFPA Summer Conference 2009 7 If its not in writing, it didnt happen.

8. 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.

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

10. 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.

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

12. 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.

13. FEFPA Summer Conference 2009 13 Examples of Observations & 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

14. 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?

15. 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.

16. FEFPA Summer Conference 2009 16 The key to a successful hand-off from office to field is: The accuracy, completeness, and reliability of the estimators work. Dont fumble the hand-off!

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

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

19. 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 dont forget the attachment!

20. 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, its easy to lose perspective of the importance of the document.

21. 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?

22. 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

23. 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!

24. 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!

25. 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

26. FEFPA Summer Conference 2009 26 A Picture Is Worth A 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

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

28. 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.

29. FEFPA Summer Conference 2009 29 Heres 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 Subs File

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

31. 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

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

33. 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

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

35. 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.

36. FEFPA Summer Conference 2009 36 Meeting Minutes: Best Practices When a response to Meeting Minutes is required: 1. Inform the author in writing before the expiration date. 2. Staple your response to the subject meeting minutes and file. 3. At the next meeting, make it an agenda item to discuss the inaccuracies and/or omissions. 4. If the inaccuracies and/or omissions are egregious, insist that corrected minutes be issued.

37. FEFPA Summer Conference 2009 37 If its not in writing, it didnt happen.

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

39. FEFPA Summer Conference 2009 39 Every Daily Report should include: 1. Weather (rain gauge)

40. 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 Owners 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.

41. FEFPA Summer Conference 2009 41 Every Daily Report should include: 2. Location of work on site 3. Work accomplished 4. Quantities, if applicable

42. FEFPA Summer Conference 2009 42 Every Daily Report should include: 5. Workforce by trade and number of workers 6. Hours worked 7. Equipment in use 8. Idle equipment

43. 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 Contractors 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.

44. FEFPA Summer Conference 2009 44 Every Daily Report should include: 9. Potential delaying events 10. Significant events 11. Safety issues and safety/tool box talks 12. Meetings held on site

45. FEFPA Summer Conference 2009 45 Every Daily Report should include: 13. Direction received from AHJ 14. Deliveries 15. Record of visitors 16. Authors signature and date

46. FEFPA Summer Conference 2009 46 Daily Reports There is an art to creating good daily reports. Dont assume that it comes naturally. Field personnel must be trained to write accurate and acceptable daily reports.

47. 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 contractors 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 theyve sent me who has no clue what hes doing.

48. 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 owners legal team was looking for.

49. 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. Its their fault!

50. 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.

51. FEFPA Summer Conference 2009 51 Daily Reports Example 3 (Cont.) : On 57 days, the daily reports recorded that contractor personnel performed work for FEMA after Hurricanes Charlie and Frances. On 32 days, the daily reports recorded that equipment had broken down, was off the jobsite, was unavailable, or there was no fuel available. On 21 days, the daily reports recorded that material required for installation that day was unavailable.

52. FEFPA Summer Conference 2009 52 Daily Reports Someone at project management level should spot check at least one daily report per week from each jobsite. Maintain a continuous dialog with the people responsible for writing daily reports and offer guidance on their choice of words.

53. FEFPA Summer Conference 2009 53 Notes to File 1. Document an unusual occurrence 2. Document a telephone conversation 3. Document the status of something at a particular point in time

54. FEFPA Summer Conference 2009 54 A good construction letter should: 1. Have an introduction, a body, and a summary. 2. Be limited to one and only one subject. 3. State the facts or questions clearly. 4. Discuss the subject in as few words as possible. 5. Employ your best technical writing skills (omit the prose). 6. Exclude emotion, sarcasm, threats, and profanity.

55. FEFPA Summer Conference 2009 55 Article 6.2 - Notification Contractor shall promptly notify Owners Representative of any event that may give rise to an increase in Contract Price or Contract Time. Such notification shall be in writing and shall be delivered to the Owners Representative within 7 days of the event.

56. FEFPA Summer Conference 2009 56 A good construction letter should have an introduction, a body, and a summary: On Tuesday morning, May 19, 2009, we were excavating for footings on the west side of the building between column lines D and E. We encountered a subsurface condition that appears to be rock. We checked the geotechnical report that is included in the contract documents. No rock is indicated in the area where we are excavating. Therefore, in accordance with Article 6.2 of the Contract, we hereby notify you that this event may give rise to an increase in contract price and/or contract time. We are currently investigating the situation and will keep you informed as to what we find. In the meantime, we are tracking our labor and equipment time towards the resolution of this issue.

57. FEFPA Summer Conference 2009 57 A good construction letter should have an introduction, a body, and a summary: Please reference our letter of May 19, 2009. We notified you that we had encountered a subsurface obstruction that appeared to be rock. We are pleased to inform you that this turned out to be a boulder and we were able to remove it by changing the bucket on the backhoe. No additional cost or time was involved. We hereby withdraw our notification of May 19th and consider this issue closed.

58. FEFPA Summer Conference 2009 58 A good construction letter should employ your best technical writing skills and omit the prose: The Contractor requested that we provide as-builts of the pipe duct banks, which traverse through the tunnel. At this time our office has suffered a tragic loss of our print machine. I will provide a copy of the prints at the next meeting. My apologies for any delay this may cause.

59. FEFPA Summer Conference 2009 59 A good construction letter should exclude emotion: I questioned why my firm was paid only 90% of our Change Orders #2, 4 and 5. This work was authorized by the Developer to be performed on a T&M basis. We did just that; we did follow instructions. I have thought of an easy solution for the Owner. They have only paid 90% of these extra work tickets. I dont want the balance of the 10%. I can take 10% of the piping back that I have installed and with the escalation of material costs in the last year, I will install it at a job that is actually willing to pay me. Can you please indicate what 10% of the piping I can remove? I would like to start this process on Monday July 14th.

60. FEFPA Summer Conference 2009 60 A good construction letter should exclude sarcasm: Due to discrepancies in the plans and the information provided by you the architect, we are being forced to react to solve a problem with the tie beams at the tops of the masonry shearwalls … If we encounter any resistance from the City of ________ or the Threshold Inspector we would hope that you will provide the assistance necessary to satisfy their requirements.

61. FEFPA Summer Conference 2009 61 A good construction letter should exclude sarcasm: We are currently working with the City and the Threshold Inspector to resolve the issue with the tie beams at the tops of the masonry walls. As the designer-of-record, your assistance may be required. To keep you informed of our progress, we will copy you on all correspondence related to this issue.

62. FEFPA Summer Conference 2009 62 A good construction letter should exclude threats: I have made a list of the following items which you may wish to take action on, in response to the contractors claim: 1. Deny contractors claim and work with the attorneys to make up some countersuit for a similar amount. 2. Work closely with the Resident Engineer and make a long punch list which includes every possible small nit-picking item. 3. Advise the contractor to remove his batch plant from the job site within the next seven days or threaten to charge him ground rent.

63. FEFPA Summer Conference 2009 63 A good construction letter should exclude threats: 4. Review the number of rain days this year compared to previous years and if it is substantially lower, decrease his contract time accordingly. 5. Review the Superintendent Daily Reports and see if there are any items documented that can be used against him.

64. FEFPA Summer Conference 2009 64 A good construction letter should exclude profanity: In regards to your letter, dated November 22, _____, concerning possible erosion of slopes on the contract captioned above, please be advised that we are of the opinion that you are full of shit. If you have any questions concerning this matter, please do not hesitate to contact me. I remain Very sincerely yours,

65. FEFPA Summer Conference 2009 65 Some letters are simply indescribable… While I was sitting on the toilet reading this fax, I realized that this project has a lot of similar aspects of medieval torture. Take for example, the Judas Cradle, the triangular-shaped end was inserted into the victims anus, just like this project, we took it up the anus. Another very similar means of torture is the Judas Chair. I am convinced this chair was used while we were negotiating this claim. Im just trying to figure out which is more painful. The saw, how appropriate; just cut us in half, regardless of the amount of the change order. The common element between these forms of torture and this project is the slow, painful death.

66. FEFPA Summer Conference 2009 66 And accompanied by illustrations…

67. FEFPA Summer Conference 2009 67 Summary 1. Be judicious in your choice of words. 2. Include the facts and nothing but the facts. 3. As you write and review your correspondence, picture explaining it in a deposition or at trial. 4. In certain instances, a hot letter or email should be allowed to cool off overnight before sending. 5. When in doubt, send it out!

68. FEFPA Summer Conference 2009 68 If its not in writing, it didnt happen.

69. FEFPA Summer Conference 2009 69 The One to Beat… We are in receipt of your Letter of Termination, which you kindly faxed to us at 7:10 p.m. yesterday evening … I find your predatory and abusive behavior, abusing of our good will and intent, to be disgusting in the extreme. You promise and plead to obtain what you want, only to turn around and break your promises by twisting your words. Your firm has a reputation for this type of behavior, but you shall not get away with it this time. In summation, I have never worked with a more disorganized, disreputable, disgusting, abusive, predatory, underhanded, lying, back stabbing S.O.B. Owner in my entire life. The past two and a half years working with you and your firm have been nothing but agony and torture. Sincerely,

70. Questions? Presented by: Cheryl McBride Director Trauner Consulting Services, Inc. www.traunerconsulting.com