Job & Jobsite Documentation

Daily Diaries

All jobsite supervisory personnel should keep a daily jobsite diary. When it comes to claims and litigation, this diary (accompanied by jobsite photos) provides the foundation for any successful claim.

Firsthand documentation of daily job progress carries high credibility in litigation proceedings, whether in court, mediation, or arbitration. The PM and all jobsite supervisors should maintain separate daily diaries, and be given specific instructions about what to include.

All jobsite diaries and photos should be copied at least weekly and transmitted to the home office. The office copies should be annotated with the respective photos as a pictorial assessment of the jobsite progress and issues, and then scanned into a single inclusive electronic daily diary. Here are some of the items that should be included in each daily diary:

•  Area(s) of work

•  What and how much specific work was accomplished

•  Unusual condition

•  Delays encountered and their cause(s)

•  Extra work performed

•  Deliveries to the jobsite

•  Work performed by other contractors

•  Communication with the GC, both verbal and written

•  Communication with other subcontractors, both verbal and written

•  Jobsite visitors, whether directly related to the subcontractor or not

•  Inspections performed, by which trade, and the results of these inspections

Digital Photos

Each jobsite should be provided with a digital camera for documenting progress and specific issues. A picture is truly “worth a thousand words.” With digital technology, it’s easy to capture not only the normal progress of a project, but also any issues that may ultimately lead to disagreement or contention.

Additional Preparation for Claims & Litigation

These photos can verify the existence of prior or changed conditions, including the installation methods and equipment required to accomplish a given task.

In addition to all the documentation steps that have been outlined in this article, it is also important to do the following:

•  Daily reports or forms should be completed on the jobsite and transmitted to the GC. A copy of each daily report or form should be kept at the jobsite and a copy sent to the home office. These reports should include remarks about normal progress, as well as any issues of concern. They should also be used to put the GC on notice that there are impending issues for which a change request may be filed.

•  Job minutes from regularly-scheduled meetings should be read for correctness and completeness. The subcontractor’s field management staff should take their own minutes to verify that the official meeting minutes are correct and accurately include all issues discussed.

   Any omissions or corrections to the officially-published minutes should be brought to the GC’s attention in writing, Remember: Silence on the part of the subcontractor = “It didn’t happen.”

•  Maintain all copies of superseded construction documents, including drawings, specifications, and schedules. Never, ever discard any superseded construction documents. A written summary of all changes in each iteration of these documents should be prepared with comments regarding their impact not only on costs, but also on schedules.

   This information should be given to the PM to prepare a formal written summary for the GC that outlines the subcontractor’s understanding of the changes and details the impact to the job (whether it’s on the cost, schedule, or both). If the impact of the changes is not yet known, then the GC should be put on notice that the impact is yet to be determined and will be forth coming.

This is also the opportunity for the subcontractor to make the GC aware of any upcoming change requests. All field and office copies of newly-issued construction documents should be annotated with the changes from the previously issued documents and date-stamped with the date received.

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•  to the GC whenever any additional information or clarification is required.

A file should be maintained for these documents with a current and continuously-updated index of all requests, noting the date submitted and the date answered. When not answered in a timely manner, follow up with additional documentation requesting an answer.

•  Verbal directives given to the subcontractor by the GC should be confirmed in writing to the GC. These communications outline the subcontractor’s understanding of the directives and their impact on the product’s cost and schedule.

This not only commits the subcontractor’s understanding of the verbal directive to writing, but it also gives the GC the opportunity to clarify any miscommunication.

•    Always keep a jobsite labor chart on delayed, disrupted, and/or accelerated jobs. Keep track of daily manpower and any other required changes – especially in relation to the effect on crew size or overall manning of the project when there is shortage of manpower or performance by other trades on the job.

This information should be communicated to the GC in the daily report and include in the PM and superintendant’s daily diaries.

•    All e-mails should be printed and filed appropriately. Set up your e-mail program so that an acknowledgement of receipt is required in order for recipients to read an e-mail. (This is an easy process if using Microsoft Outlook or other such programs.) “Read recipients” should also be printed and such filed in the appropriate files.

Conclusion

Sometimes, despite the best preparation and much hard work, adversarial actions are required by a subcontractor – usually due to a disagreement between the parties involved regarding “scope.”

Such disagreements can relate to the original based bid for the project, any subsequent changes, how the terms of the subcontract were met or acted upon during the course of the job, scheduling impacts, pricing, or some form of cumulative impact issues.

If you have not kept detailed records as recommended here, you will need to reconstruct the same type of documentation from all the documents that have been accumulated during the job’s progress – from pre-bid to beneficial occupancy and closeout.

I cannot stress enough the importance of understanding all of the contracts and documents involved in a subcontract. To help you do so, it may be wise to enlist the help of legal counsel or other experience experts.

RONALD A. LUNDSTROM, CPA/CFF, CFE, is President of Lundstrom LLC, a forensic accounting and fraud investigation firm in Atlanta, GA that specializes in construction and real estate.

Prior to the formation of Lundstrom LLC, Ron served for 24 years as the President and CEO of a construction and design-build engineering firm that operated in the U.S. and Western Europe. He also has 10 years’ experience in forensic accounting and fraud investigation. Ron is a frequent lecturer and presenter, and has published articles in various industry publications.

Ron earned a BBA in Accounting from Georgia Southern University, Statesboro, GA, and a MPA in Accounting from Georgia State University, Atlanta, GA.

Ron is a member of CFMA’s Atlanta Chapter, as well as a member of the AICPA, Georgia Society of Certified Public Accountants (GSCPA), National Association of Certified Valuation Analysts (NACVA), Association of Certified  Fraud Examiners (ACFE), and Forensic CPA Society, Inc.

In addition, he also serves as Chairman of the Forensic Accounting Advisory Board at Georgia Southern University.

Phone: 404-603-9966

E-Mail: rlundstrom@lundstromllc.com

Website: www.lundstromllc.com

“Source: CFMA Building Profits, Construction Financial Management Association, Princeton, NJ (www.cfma.org)”