"I know it's outside the scope but we’ll work out the details after it's finished."
It should be no surprise that, when all anyone wants is to get the work done, the paperwork can lag behind. In most cases the parties do get it all worked out, but rarely without friction. Memory is seldom without bias and everyone thinks that the other guy owes them a break. Not every change ends in a construction claim, but some healthy skepticism can keep everyone grounded. A written record goes a long way to help in demonstrating what was agreed upon in the moment.
In a perfect world, there is no deviation, change or extra without a change order or formal direction. Construction contracts are often explicit that the document reflects the whole agreement and can only be changed by all parties agreeing in writing. Particularly when circumstances lead to claims of extras, it is critical that all details surrounding any changes in scope can be demonstrated.
Ideally, your day-to-day routine would include complete, current, accessible and reliable records of instruction, performance, costs, adjustments, updates and approvals, but life is seldom perfect. That healthy skepticism should include acknowledgment that some aspect of the construction project could devolve into a construction claim. The successful resolution of any claim depends on how convincingly one side makes its case, which generally relates directly to how well supported their position is. If a position cannot be demonstrated, then the only remedy to the "he said - she said" scenario is a third party's view of what sounds reasonable and fair. That can be a problem when the underlying change that pushed the work off scope may have been neither reasonable nor fair.
There should be a correlation between the relative sophistication of your records, the cost to maintain them, and the complexity of the work contracted, but even the simplest job requires basic documentation and it is not enough for people in the office to reconstruct records if those in the field do not appreciate what, how and when to document. Circumstances will dictate what is appropriate, but photos or video of unexpected conditions on a smart phone, a note of a conversation in a field book, or the existence of a job diary and clear expectation that it be kept current can prove invaluable to your cause. The goals are to:
- Convince the other side that your position is justified under the contract, your assessments reasonably reflect the circumstances, and allocation of responsibility for events is rational and demonstrable;
- Reconcile how the work can move forward with everyone receiving equitable treatment; and
- Avoid litigation, arbitration or other dispute-resolution processes that distract from getting the job done or demand your time, energy and money to fix what's already been done.
The most critical types of project documentation include correspondence, email and facsimiles, schedules and progress reports, time records, superintendent's daily reports, minutes of meetings, change orders and directions, and photos and video, but any record can be significant. To be reliable, they should be clear and concise, preserved in a durable format that does not allow for unintentional destruction of data, dated and clearly labelled. Established protocols for filing can include simple features like consistent job numbering, recognizable subcategories, and secure storage. Stamps affixing receipt or delivery dates or identifying document circulation can be invaluable to demonstrating a specific point. New technology can make storage and recovery easier, especially when tender/RFP documents, specifications and drawings are on-line, but unless everyone on the team is adequately trained and embraces the process, the value is lost. "Garbage-in, garbage-out" applies to most situations and sometimes cutting-edge technology only seems to make it easier to mess-up on a greater scale.
Communication is crucial to any successful relationship, so it should be no surprise that reliable records of communications are fundamental to fair treatment after the fact. If expectations are clear in the first instance, then reliable records of expectations will facilitate a smooth delivery of product or services for everyone in the process.
Project Documentation Summary
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Change in Scope? Prove It!