Compliments of Kasimer & Annino, P.C.
Tysons Office Park
7653 Leesburg Pike
Falls Church, Virginia 220432520
7038933914
BE EVENT ORIENTED
It is important that your personnel be event oriented and that they keep records which document fully and accurately progress in the field and significant problems which occur. Such protective record keeping may prevent claims from ever arising and be an "ounce of prevention."
We have prepared the following checklist to assist you in recognizing what records are important to keep and what action you should take to protect your interests. If you implement any or all of the following suggestions, we do not guarantee you will never be involved in a claim or litigation or that you will never have to retain a lawyer to represent your interests, but we do believe your company's interests and hopefully your profitability on a project will be enhanced.
KEEP GOOD RECORDS
1. Maintain a good record keeping system which documents job progress and problems as they occur. Such a record system should contain the following:
1.1 Progress payment requisitions and all data submitted to support such requests;
1.2 Inspection reports;
1.3 Daily logs kept by onsite personnel or project representatives;
1.4 Daily time records hopefully indicating the areas in which work was performed and what work was actually being done (this information might be indicated on the foreman's daily report);
1.5 Memoranda to the file relating to conversations, inspections, directions and observations;
1.6 Correspondence: keep it all!
1.7 Photographs taken on a periodic basis to show construction progress and whenever necessary to document a particular problem arising in the field which delays the work, disrupts or interferes with the progress of work forces or which may result in a change or claim for extra work;
1.8 Minutes of weekly job meetings or other meetings between the contractors or personnel;
1.9 All cost reports maintained on the project of any nature;
1.10 Copies of approved or rejected shop drawings and shop drawing logs as well as all other submittals;
1.11 Internal interoffice correspondence;
1.12 Notes of telephone conversations;
1.13 Journals maintained by any field personnel but be careful what your personnel write in their journals!
1.14 Any analyses made during performance with regard to labor productivity or other related subjects;
1.15 The preliminary (or 30 to 60 day) schedule if this was required or was prepared;
1.16 Records of input provided by consultants, subcontractors or other prime contractors relating to the duration of activities or the sequencing thereof;
1.17 Copies of the initial schedules submitted to the owner of subcontractors for review or comment;
1.18 The initially-approved schedule;
1.19 Any marked up schedules used in the field in the updating process;
1.20 Approved updates of the schedule;
1.21 Copies of reports of any CPM or other scheduling consultant on the project;
1.22 Any supplementary schedules utilized on the project, such as pour schedules, finish schedules or detailed daily or weekly schedules;
1.23 Any in-house schedules prepared for the use of trades, subcontractors or suppliers;
1.24 Any hand-drawn schedules utilized by personnel on an informal basis in the field to explain how a particular portion of the work is to be constructed or within what time frames or sequence of events.
2. Always obtain and record all important information in writing, signed and dated.
KNOW YOUR CONTRACT
3. Determine the extent of the authority (in terms of dollar limits) of all owner employees or representatives with whom you deal.
4. Make a checklist of all requirements of a notice nature in the contract and post it conspicuously for your project manager to follow.
5. Always respond as quickly as possible to correspondence received from the owner or contractor. Make certain you respond to every complaint, question or allegation. Do not concede issues unless you have no choice.
6. Utilize standard form Purchase Orders and Subcontracts for your own suppliers and subcontractors which pass all appropriate risks relating to their work along to them rather than leaving you with a residuum of independent responsibility for items over which you have no control, and which likewise limit your liability to them for owner caused delays, changes, etc. to the amount which you recover. Be sure these documents incorporate the terms of the contract by reference and that all required clauses are included therein.
DO NOT WAIVE ANY CLAIMS
7. Keep all claim avenues open by protesting in writing and filing written Notices of Potential Claim within the time specified in the Contract after your encounter, receive and/or are directed, either orally or in writing, to do any of the following:
7.1 Extra work not specifically provided in the drawings and/or specifications;
7.2 Work differently than as provided in the drawings and/or specifications;
7.3 Work in a particular manner or by a particular method which varies from or is more expensive than the method originally anticipated;
7.4 Work according to specifications or drawings which have been changed, amended, revised, amplified or clarified;
7.5 Work according to drawings which are so insufficient in detail as to require you to perform unanticipated engineering services;
7.6 Work according to one particular method when two or more alternative methods are allowed by the contract or when the contractor should be free to devise his own methods;
7.7 Work out of planned or normal sequence;
7.8 Stop, disrupt or interrupt work wholly or partially, directly or indirectly;
7.9 Work in congested work areas;
7.10 Owner or other Prime Contractor furnished equipment late, in poor condition or not suitable for the use intended;
7.11 Accelerate performance in any way, to regain schedule, to add men or materials, or to work overtime or extra shifts;
7.12 Compression of work, i.e., where you are forced by circumstances beyond your control to do a greater amount of work in a shorter period of time than anticipated;
7.13 Follow any schedules which vary from our approved schedule or planned sequence of work;
7.14 Relocate existing work because of lack of coordination, information.
8. Do not waive claim rights by negotiating and signing off on modifications or change orders which pay part of your excess costs only (usually only your direct costs), but which do not provide time extensions or impact money as requested. This is particularly critical when you could have disruption costs, extended overhead, wage rate and material escalations, acceleration costs and other impact cots substantially beyond your direct labor costs and material costs for the changed work. In such cases you should consider using the following reservation in change order proposals and in the change orders themselves:
This proposal (change order) is based solely on direct cost elements such as labor, material and normal markups and does not include any amount for changes in sequence of work, delays, disruptions, rescheduling, extended overhead, acceleration, wage, material or other escalations beyond the prices upon which the proposal was based, or other impact costs, and the right is expressly reserved, and notice of potential claim made, for any and all of the se related items of cost prior to any final payment under this contract.
As a practical matter, many owners will be reluctant to sign a change order with such language included in the body thereof¿and some will adamantly refuse to do so. In such a situation you should consider proposing as an alternative that the owner insert in the change order this language:
This change only covers the direct costs incurred by the contractor in performing the work which is the subject hereof.
While such language does not expressly reserve your right to seek a time extension or impact costs relating to the change to work nevertheless you can argue that this was the intended implication since the language specifically states the change order is only covering your "direct costs."
MONITOR JOB PROGRESS
9. Analyze your job progress in detail prior to any job site progress meetings which are held, and use such meetings as a forum for discussing and protesting delays, extra work, etc.
10. Request further time extensions whenever significant events occur which may entitle you to same.
11. Record all conflicts, discrepancies, etc. Inform the owner as they arise so that you will be properly coordinated and not incur responsibility due to lack of information.
12. Forward any significant information received from or sent to owner to counsel so that counsel can keep current with the project and determine if further specific activity is required.
13. Obtain written confirmation of all oral directives. If they will not confirm in writing, you should write a confirmation letter to them.
14. Maintain a log of all drawings, submittals, change orders and proposals, pertinent correspondence and other like data for ease of reference and also to indicate changes.
15. Review employee's time cards or Foreman's Daily Reports in detail and revise their format as necessary to better reflect potential claim areas such as extra work performed, delays, etc. In many cases this can be done without too much extra expense or undue inconvenience so that these records clearly indicate not only the hours worked, but also the amount of work accomplished (i.e., the number of feet of conduit installed). Such records are often a good basis for proving loss of efficiency.
Along the same line, if you should get into significant claim situations you might consider making some time studies to indicate efficiency of work accomplished either using your own methods or an outside expert. This can become quite complex and is not called for often, but if such a study is made during a good production period and then another study made during a poor production period, the difference can be quite startling and serve as good proof of loss of efficiency factors.
Categorize your cost records (for example, segregate your excess installation costs by area and type of work, i.e., grilles and registers) in such a manner that all claim aspects will be as discernable as possible, particularly with regard to loss of efficiency or impact type costs. Try to analyze them at this time to determine of what they primarily consist. Then maintain as many of your records as possible with those categories in mind so that they will be provable at a later date.
REVIEW AND MONITOR SCHEDULING REQUIREMENTS
16. In seeking to protect your rights under the scheduling and coordination provisions of your contract, we suggest the following:
16.1 Determine what scheduling method is specifically required and in what form;
16.2 What method is most desirable from the contractor's standpoint?
16.3 Does the contractor have any option regarding the method and form of scheduling or are these negotiable?
16.4 Seek clarification before bidding if questions arise over the method, form, or details required or related to scheduling. Go on record if not satisfied with the specification requirements during any pre-award negotiations.
16.5 Does the contractor have the capability of providing all of the detail and data that is required by the contract, and within the time limitations specified?
16.6 If it is an owner-prepared schedule:
16.6.1 Does the owner expressly warrant the schedule as feasible and the durations as realistic?
16.6.2 What responsibility does the contractor expressly have under the contract for reviewing the schedule and checking and verifying its reasonableness and feasibility?
16.6.3 Does the contractor have the option of rejecting the owner¿s schedule and preparing his own?
16.6.4 What responsibility does the contractor have for updating the schedule?
16.6.5 Go on record with the owner if the schedule is not feasible or the durations are not realistic, or if there has not been sufficient time to review the schedule.
16.7 Are the progress payments based upon the schedule and is front end loading permitted?
16.8 What role does the owner play in the preparation of the contractor-prepared schedule?
16.9 Is an interim schedule required, i.e., a 60 or 90 day initial schedule?
16.10 Is approval of the owner or his agent required for the schedule?
16.11 Is there a specific requirement that the schedule be used to implement or execute the work?
16.12 Are supplementary schedules permitted at the contractor's option?
16.13 Are subcontractors required to receive the schedule and updates?
16.14 Are there any other requirements as to coordination, such as weekly job meetings?
16.15 Does the contract require the contractor to have anyone on his staff with an expertise in use of CPM or can he rely on an outside consultant?
16.16 What exculpatory language, if any, does the prime contract contain?
16.17 When are time extensions given and for what reasons?
16.18 Who gets the benefit of float time?
16.19 Does the contract-prepared schedule have to make allowances for holidays, possible strikes, inclement weather, etc.?
16.20 As to subcontractors:
16.20.1 Are subcontractors required to provide input for development of the progress schedule (realize this may be viewed as an express warranty in the subcontract that the progress schedule will be used by general contractor)?
16.20.2 Is the CPM going to be used by the general contractor to execute the work; if so, can the subcontractor use the approved CPM schedule or should he be expressly required to follow whatever schedule is issued by the general contractor?
16.20.3 Does the contract specifically provide that the general contractor does not guarantee or warrant the duration time for the various items of work or their start and finish dates as set forth in the schedule? The general contractor might consider sending the following letter to subcontractors or to the owner when the CPM schedule is forwarded them pursuant to a contract requirement:
Re: CPM Schedule
Contract No.________
Dear __________________:
Enclosed please find our proposed CPM schedule for the project.
Except for contractual completion requirements, the duration times for the various items of work shown on the enclosed CPM schedule are not commitments. They are estimates based on presently known or represented conditions and any changes therein will require a change in schedule. Please note specifically those items of work which are paced by or dependent upon actions by the owner or those under his control, since we are relying on being able to commence and proceed with those activities on the dates shown and any delays of that nature would affect our schedule.
We will assume that this schedule is acceptable to you and in conformance with our contract requirements unless we hear from you to the contrary within the next ____ days.
Very truly yours,