Tag Archives: critical path

CONSULTANT’S CORNER: FIVE TIPS FOR BETTER CONSTRUCTION PROJECT DOCUMENTATION

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don carlowConsultant’s Corner: In addition to providing perspectives and analysis from a lawyer, it is beneficial to hear from industry professionals and consultants. These are the folks that serve as expert witnesses during litigation / trial and consult with owners and contractors preconstruction and during construction. Consultant’s Corner is dedicated towards hearing from those experienced and respected professionals.

 

Don Carlow (photo) is the owner of Florida Construction and Scheduling Consultants, LLC and has over twenty-five years of experience in CPM planning and scheduling, cost engineering, construction claims analysis, and program and construction management. He serves as both an expert witness and as a consultant preconstruction and during construction in scheduling, forensic delay analysis, cost and damages analysis, and litigation support on construction projects ranging in size and scope.  His project experience includes heavy civil; transportation; pipelines/underground utilities; government/military; mixed-use commercial; airports; hospitals; high-rise; theme parks; hospitality; schools/ universities; and single/multi-family residential.   Mr. Carlow has taken the time to share with us a very important article on maintaining organized and good project documentation based on his experience.

 

FIVE TIPS FOR BETTER CONSTRUCTION PROJECT DOCUMENTATION

 


When it comes to claims and disputes, I have often heard the proverbial advice that “you should document everything.” However, in reality this is rarely done and it is often impossible to accomplish. Normally, the folks on a construction project simply don’t have the time to write down everything that’s going on at the site and at every project meeting and then respond to every email and phone call. In fact, I would not advise you to try! Doing so would be frustrating at best and counterproductive at worst. Your management team should be focused on managing the project. This is especially true on a troubled project, where you have to put out one fire after another. Your team’s efforts should be focused on using their time in the office wisely and making sure that the important items are documented. So, how are they supposed to know which of the items are the most important to document? This article attempts to answer that question by establishing some rules and by providing an objective framework that can be used when deciding how and what to document.

 

1. SUPPORT YOUR POSITION

 

For each contractual disagreement or issue, spend the time to write the letters or emails that support your position and explain why your position is correct. This should be the overall framework from which you are focusing your documentation efforts. Document the issues and events as they occur; take a photo, write an email, or put an extra note in the daily report that explains the event or occurrence from your perspective. Make sure there is evidence in the file that supports and explains your position. You’d be surprised how the resolution of an issue was changed by a single photo or a couple of sentences included in a daily report.

 

2. RESPOND TO EVERY LETTER

 

When is it necessary to write a letter? When someone writes one to you. It is not necessary to engage in a letter-writing campaign (it is simply not true that the person with the highest stack of letters automatically “wins”). But, for each letter that’s written to you make sure there is a written response in the file. One solid letter for each issue is a good rule of thumb. Get your points documented, keeping in mind tip #1, above.

 

3. BE PROFESSIONAL

 

In your written correspondence, always be professional and stick to the facts. Be objective, rational and unemotional. There is no need to tell the owner’s rep that he’s an idiot (even if he is). Many people may be involved in the resolution of the dispute after the project is over and they may never meet you. People are going to form their opinions of you based on what you say and how you say it.

 

4. GIVE NOTICE

 

Notice provisions are written into contracts for a reason. Their purpose is to give the other party time to investigate, mitigate expenses, and track costs. Read your contract and make sure you are complying with the notice requirements. To make giving notice easier, we recommend that our clients develop form notices. At a minimum, we suggest having form notices available for each of the following situations: (a) Excusable Delay/Request for Time Extension, (b) Differing Site Condition, (c) Conflicting Specifications, (d) Acceleration (Directed or Constructive), (e) Disruption of Work Force, and (f) A/E Change. Have your lawyer review the notices before using them in the field.

 

5. RESERVE YOUR RIGHTS

 

I have been involved in several lawsuits in which the judge upheld signed releases on payment applications and change orders, and barred recovery for damages. Have your lawyer review the release language on any document before you sign it. At a minimum, cross out the offending language, or simply write that you are reserving your right to additional money or time for the impact encountered on the project or as a result of the change.

 

Knowing how and what to document will keep your team focused on managing the project and put your company in a much better position when it comes to resolving disputes when they arise.
Please contact Don Carlow for more information regarding the value he can provide to your construction project or litigation team. He can be reached at the following contact information:
Website: http://florida-consultants.com/
Email: don@florida-consultants.com
Phone: (407) 603-6165

 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

ACCELERATION COSTS MONEY

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Contractors know or should know the concept of acceleration because acceleration costs money. Acceleration occurs when a contractor expedites its performance due to an excusable delay (a delay not its fault) in order complete its performance earlier than it would have considering the delay.

 

Contractors accelerate by incurring increased labor costs to work overtime and premium time (nights and weekends), adding more manpower, or adding more crews (which also may mean adding more supervision to supervise the additional labor). These added labor costs are typically direct payroll costs (factoring in labor burden) as well as equipment costs associated with operating the equipment (especially if it is owned equipment) for longer hours or renting additional equipment to be utilized by the additional manpower or crews. In addition, acceleration can result in inefficient labor hours because manpower is now working longer hours, new manpower is added and there is a learning curve associated with new manpower that is not familiar with the work, and the labor is potentially working under resequenced conditions and in congested locations with other trades. Thus, just because the contractor takes reasonable efforts to accelerate does not mean that it is incurring efficient / productive labor costs or that its acceleration efforts are substantially improving the completion date of the project.

 

There are two types of acceleration claims. The first type is the straightforward direct acceleration claim when the government/owner directs the contractor to accelerate its performance to finish the job in advance of the completion date. Many times, in this circumstance, the government/owner understands that it will need to compensate the contractor for the acceleration efforts.

 

Constructive acceleration is the other type of acceleration claim and the type more likely to lead to a dispute because the dispute centers around both entitlement and quantum. Constructive acceleration occurs where the contractor seeks additional time to complete the project due to what it claims are excusable delays, but the government/owner is unwilling to grant the contractor the additional time. To prove construction acceleration, the contractor needs to prove:

 

  1. there was a delay that was not its fault (an excusable delay) that impacted the completion date;
  2. the contractor notified the government/owner of the delay and requested additional time to complete its performance;
  3. the government/owner expressly directed the contractor to overcome the delay and complete the project in a shorter amount of time than the contractor was entitled to factoring in the delay or implicitly directed the contractor to overcome the delay through the refusal to grant additional time; and
  4. the contractor did in fact incur costs in accelerating its performance.

See Armour of America v. U.S., 96 Fed.Cl. 726, 757 (Fed.Cl. 2011) (“To prove a constructive acceleration claim, and entitlement to an equitable adjustment, which Armour [contractor] did not attempt to do during the proceedings before the court, a contractor must show (1) that the contractor encountered a delay that was excusable; (2) that the contractor requested from the government an extension of time due to the delay; (3) that the government denied the contractor’s request for an extension of time; (4) that the government demanded completion of the contract in a shorter amount of time than the contractor was entitled to, given the excusable delay; and (5) that the contractor was required to expend additional resources to adhere to the schedule on which the government insisted.”). See also Fraser Const. Co. v. U.S., 384 F.3d 1354 (Fed.Cl. 2004).

 

 

What is important to remember is not only will the contractor need to prove the excusable delay that impacted its schedule, but it will need to prove it notified the government/owner of the delay and requested additional time to perform which was denied. After proving all of this, the contractor will still need to establish that it actually accelerated its performance and incurred costs in doing so.

 

As a basic example, assume a project was to be completed December 31, 2014. This marked the date the owner needed to use the project for its intended purpose. However, due to excusable delays (assume many owner-directed change orders and/or design-related issues), this completion date is postponed a year to December 31, 2015. The contractor notified the owner of the delays and impacts to its schedule and requested an extension of time to complete the project; but, for whatever reason, the owner refused to grant additional time and implicitly demanded that the contractor complete the project on schedule. The contractor, as the result of the owner’s refusal to grant additional time, accelerated its performance to finish the project earlier than December 31, 2015 and to avoid the consequence of the owner assessing liquidated damages (i.e., the contractor accelerated to mitigate the impact of the delay). Based on the contractor and its subcontractor’s efforts, the project was completed on May 30, 2015–5 months after the original completion date, but 7 months before the contractor should have been complete considering the excusable delays. In this basic example, the contractor’s acceleration efforts mitigated the overall delay by approximately 7 months (the difference between May 30, 2015 and December 31, 2015) even though the contractor finished 5 months later than the original schedule. The contractor will need to prove the costs associated with these acceleration efforts.

 

It is good practice for contractors to work with attorneys and experts to preserve the acceleration claim and prove the excusable delays through a critical path schedule analysis and the costs incurred in accelerating performance.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.