The Proof is in the Paper

By Gerard W. Ittig | Mar 15, 2003




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It used to be said that the definition of a “claim” was “an unresolved change order.” That concept has been expanded because of the sheer quantity of claims and litigation in construction. Now, most contracts seek to impose restrictions and limits on change orders and claims.

The two most common contract approaches are:

- Contract limitations (for example, no-damages-for-delay, pay when paid, no consequential damages); and

- Documentation requirements, especially written “notice.” In prior articles, I discussed a number of the contractual waiver-type clauses. Here, the concentration is on paperwork.

Keep good records

You should maintain a good record-keeping system. Too often, a company’s field records are highly dependent on the personality of the project manager or foreman, without explicit guidance from management. The following are some suggestions of which records to keep, with brief explanations.

All bid documents (take-offs, extensions, etc.). In the event of a claim for lost labor productivity, for example, the quality of the bid is almost always at the center of the dispute.

Daily logs/foreman’s reports. These records give the closest, first-hand account of job progress and field problems and are given high credibility in court. They enhance the memory of your witnesses, and provide management with a snapshot of problems so that corrective action can be taken. But be careful what you write. For complex projects, consider having your project manager dictate the day’s events to be typed later.

Memos to the file. The courts give greater credence to correspondence over memos to the file as the other side has the opportunity to respond to a letter. However, memoranda can confirm conversations and promises under circumstances where a confirming letter may make the other party react negatively. Internal memos are also a good way for the field and home office to communicate, and prevent misunderstandings.

Correspondence. Do not simply keep it all, but be the one to generate it. Written contract notice requirements, for example, mandate a letter for interferences, delays, extra work, differing conditions, etc. Without the writing, the other party has a defense to your claim. Do not rely on verbal discussions to satisfy the notice clauses. You should also consider using pre-printed notice forms to make your project manager’s job easier.

Meeting minutes. These records have high credibility in court as they confirm discussions (and rebuttals) among a number of parties. Silence in these documents is also used to show that a problem really did not exist, as a party being harmed would (should) have said something. In a pinch, meeting minutes may satisfy written notice, but do not count on it.

Drawing and shop drawing logs. At a minimum, these logs should have the drawing date, approval date and date of receipt. For a project large enough to justify the effort, this data could also be inserted into the work schedule. Keep all drawings. Do not discard updated or modified plans. Outdated drawings may be needed to track changes and delays.

Requests for information (RFI). Among the major causes of claims is incomplete or defective drawings. When errors or omissions in the design are encountered, they should be confirmed by an RFI (sometimes referred to as a request for clarification). Standard RFI forms should be prepared.

Schedules. Whether bar chart, CPM, milestone or other variety, all schedules should be reviewed and saved. Marked-up schedules kept in your field trailer can be very effective for monitoring job progress and for identifying and proving the causes of delays and interferences.

Photographs. Describing a site condition to a judge can be difficult. However, pictures of muddy conditions, tons of concrete block in your way, or scenes of congested areas illustrate a point better than mere words. Make sure that the photos are dated, and include a description on the reverse side.

Privileged documents. Any written communications with your attorney should be kept separate from field records, with limited copying and distribution. Disclosure of these privileged communications, even if by mistake, can result in a waiver of the privilege.

Job-specific documentation

While the types of records discussed above may be sufficient for many projects, the list is not all-inclusive. Depending on the nature of the difficulties you encounter, you should consider creating additional monitoring files.

Some suggestions:

Time extensions. Certainly, you should analyze change orders before signing to determine the impact to your schedule. However, you should request time extensions whenever significant events affect your work. Where a specific amount of time is uncertain, at least notify the other party of the delay, with details to follow.

Written confirmation. Oral directives are typical on any construction project. Where the verbal instructions involve schedule changes, modifications to the drawings or specifications or extra work, you should write a note of the discussion for the other contracting party to confirm. A written confirmation also gives the other party the ability to correct any misunderstandings of the oral directives.

Contract requirements checklist. As soon as possible after signing the contract, review the general and special terms and conditions for written notice requirements. Then, make a checklist. This “chart,” kept in your field trailer, will act as a constant reminder for letters, RFIs, written confirmations, etc.

Labor chart. On a delayed, disrupted or accelerated job, keeping track of the effects on labor can be a daunting task. One relatively easy system simply involves keeping a running tally of actual labor (by manpower, hours worked or both). If the information is updated daily, you will have an early detection system of problem areas.

Modified daily reports. For a problem job, consider revising the format for your daily reports so that they reflect potential claim areas. These records, even if modified well into construction, can show not only hours worked, but also work accomplished (for example, the number of feet of conduit installed, areas unavailable, etc.).

Anything else?

Nothing substitutes for good judgment. The nature and size of your business, as well as the size and complexity of your projects, will dictate the type of record-keeping program you need. Use your judgment, but make certain that you have a system that fits your company’s projects. EC

ITTIG, of Ittig & Ittig, P.C., in Washington, D.C., specializes in construction law. He can be contacted at 202.387.5508, [email protected] or

About The Author

ITTIG, of Ittig & Ittig, P.C., in Washington, D.C., specializes in construction law. He can be contacted at 202.387.5508, [email protected] and





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