Documentation is a vital function of construction management. If your profitability depends upon the collection of extras or the defense of claims made against you, and you have no records, the world's best consultants and lawyers will be unable to create them for you. And if you do have the records, but your documentation's organization and quality are poor, the cost of compiling suitable information for the pursuit or defense of a claim may be high.
Effective documentation is the result of following simple guidelines and maintaining organizational discipline. The discipline needed for effective documentation requires the same management instruction, repetition, and follow-up construction professionals use to ensure that equipment is properly maintained, safe working practices are followed, and reports are submitted on time. Typically, completing paperwork on a construction project becomes burdensome; this is the point at which the discipline comes into play. The profitability of the project could be directly impacted by effective documentation or lack thereof.
Project managers must establish a minimum checklist of records for retention. A standardized format or outline for the organization of files to be kept is beneficial to the maintenance of effective documentation. The following are the types of records that should be included in a well-organized filing system:
- The original estimate, with all data upon which it is based
- The contract and other legal documents
- Correspondence (including any pre-contract correspondence)
- Meeting minutes
- Daily logs or diaries
- Weekly/monthly reports
- Engineering drawings
- Engineering calculations
- Quality control/quality assurance records
- Other technical information
- Schedules and other planning documents
- Procurement/purchasing records
- Cost and financial reports
- Payroll and personnel records
- Equipment assignment and utilization records
The checklist can be tailored to suit the requirements of your company and further individualized for each project. Additional recommendations relative to effective documentation follow.
The Original Contract, subcontracts, change orders, and any other legal documents pertaining to projects should be kept in locked, fireproof filing cabinets or safes.
Correspondence may be your most important record. Firstly, letters must be written, when required:
- to record your compliance with the contract (as with contractually required submittals and reports)
- to confirm verbal requests or instructions
- to report unforeseen events or conditions
- to record your disagreement with a statement or position taken in writing by the other side
- to give timely notice of a request for additional time or compensation
All original incoming and outgoing correspondence is generally kept in a chronological file or files. These are control files that must be protected from removal.
On all but the smallest projects, subject files are usually created with photocopies for easy reference to specific commercial or technical subjects, such as "Insurance" or "Pipelines." Many companies have replaced subject files with computerized indices; in some systems, much of the correspondence itself is retrievable via the computer.
Daily logs or diaries record:
- the day's work activities and production
- quantities where applicable
- milestone events
- any conditions or events that affect production
If planned operations are prevented, delayed or changed in their nature, note this fact and state the reasons. Accidents on or about the jobsite should be given particular attention in the diary, even when they do not appear to involve your company directly.
Record key instructions and requests that were not made in writing. Note formal inspections, and visits to the site by non-resident staff of the owner, architect/engineer, or contractor. Record the assignment and utilization of labor and equipment, unless these are recorded elsewhere.
Frequently, a contractor keeps a good, separate record of labor utilization, by task, but fails to do the same for equipment. The diary should be concise and objective, and must actually be kept daily, or much information will be forgotten or misplaced. One suggestion for active field people is to carry a pocket tape recorder and make verbal notes as the day goes on, to be transcribed at the end of the day or the following morning.
Meeting minutes and periodic reports prepared by others must be reviewed carefully. If there are errors or important omissions, correct them in writing as soon as possible. Furthermore, when your daily logs indicate that you have been given key verbal instructions or approvals, be sure to bring this up during meetings. In this way, the problem situation is discussed openly and the issue is recorded in the meeting minutes.
Photographs. Take photos at regular intervals of day-to-day activities and of any special or unforeseen events. Record the date of each photo, provide a brief description where necessary, and identify the photographer. Photographs provide significant factual information after the fact that may not have seemed important at the time. Also consider using a video camera for the same purpose.
Engineering drawings, calculations, technical data from catalogs and manuals, test certificates, and other technical information can be voluminous. Ensure that any of these documents within your control are properly dated and identified, with revisions indicated. If received or sent with transmittal correspondence and stored separately from the correspondence, ensure that the documents are adequately cross-referenced with other documents and correspondence. Label superseded drawings and documents, "Void."
A contractor should be able to readily access job records and easily follow the paperwork regarding any project-related transactions. For example, tracking shop drawings from one supplier, submitted to the contractor three times, routed by the contractor to the owner's engineer three times, returned twice for correction, and finally approved should not be a time-consuming search. The contractor should have no trouble identifying the final version upon which the fabrication was done.
Cost records cannot be overemphasized. Accountants may be satisfied with auditable, verifiable, and accurate records of total job costs that do not indicate the costs of a particular item of work or of extra work. To request extra payments, however, the contractor will be required to demonstrate that the costs claimed were actually incurred on the extra work.
Cost records maintained in the normal course of business will carry much more weight than an after-the-fact reconstruction or estimate. This cost accounting system does not need to be complex. Most firms utilize uncomplicated cost code breakdowns, tailored to the particular needs of the specialties.
Contractors should not overlook equipment utilization costs. If equipment cost is not distributed to work items in the cost system, contractors should keep a separate record of equipment utilization, in the same fashion that labor utilization is recorded, by work item, on a daily or weekly time sheet.
When extra work is identified and separable, it should be recorded under cost codes set up specifically to cover extra work. If possible, Contractors should have the owner's representative sign force account sheets covering the extra work on a current basis. These can be signed, "without prejudice," if entitlement is not yet agreed upon.
The above checklist items highlight the essential documentation that should be maintained for a project. The ability to retrieve the documentation is almost as important as the creation and retention of records. Documentation management is an essential component of overall project management.