Notes From My Desk
In the construction world, if the suggestions below are followed, the world would be a better place and attorneys’ fees reduced.
- Keep daily notes and exchange them weekly. Distribute copies to each party on the project. All parties to the job should exchange notes – owner, architect, engineer, contractor, and subcontractor. Communication is key.
- Prepare as-built drawings with color coded requests for information (RFIs), architectural supplemental instructions (ASIs), and change order proposals. Mark the as-builts with a numbering system to follow each of these items and then color code the items by trade, mechanical, electrical, structural, etc.
- Spend money on cameras and film. Take pictures of every issue that is potentially a problem. A picture the day after rain, when the equipment is stuck in three feet of mud, may gain an extra day of delay. The calendar would never say rain on that day. A picture of a project site ready or not ready to receive work can dispel or prove a claim of delay.
- Prepare written notices of conditions which cause problems. These are potential claims. The other side must be given notice of a changed condition, have an opportunity to investigate and an opportunity to respond.
- Hold regular job meetings, whether weekly, bi-weekly or monthly. Always prepare minutes or a memorandum of each meeting. List conditions or issues to be addressed. Until those issues are resolved, each meeting should review all outstanding matters and note the status. Distribute copies of the minutes to all interested parties and invite written responses.
- Prepare preliminary notices for every job, public or private. The money wasted is negligible if it is sent on a federal project, but if it is not sent when needed there may be no recovery.
- Prepare and require schedule of values. Owners should require and contractors should prepare a schedule of values. For each major line item, identify labor and material costs. Compare the total preliminary notices for each line item with material costs identified in the schedule of values. Now you can determine if are there “busts” in the budget. Do the preliminary notices exceed the material and equipment costs in the schedule of values? If so, you have a problem. Use the labor costs in each progress payment. Make sure you are getting lien waivers equal to the material costs.
- If you think you’re going to have a claim for delay change orders, try to establish a separate accounting to track costs. It is difficult to recover damages for delay costs and change order costs without an accurate detailed accounting of those costs.
- Read contracts before you sign them and cross out what is unacceptable. In the “battle of forms,” limitation-of-liability clauses are enforceable. In the wrong set of circumstances, you may have damages from defective material which will never be recovered.