This article is taken from a webinar that was presented by SunRay Construction Solutions and Alex Barthet. Alex is a board-certified construction attorney, who serves clients in the state of Florida. In this article we will discuss the three project documentation tips to help you get paid.
Tip One: Daily Reports
You have to remember that the documentation you are putting together is not intended to document things because you need to know them today, it is to prove or disprove things tomorrow.
a. Documentation is not for today; it is to prove (or disprove) things tomorrow
This means that as time passes, people are going to forget what has occurred. Your daily reports are going to be the key component of proving what did or did not happen. As you may know, when you get to the end of a job, and then you have a closeout meeting. At that closeout meeting, people bring up things that happen during the course of the job.
They want to try to renegotiate your contract. Why should they pay you less money than you are expecting to be paid, why do they not want to approve your change orders, why are they hitting you with a back charge for cleanup or repairs to your work?
The same is true in reverse to the extent that you want to be able to back charge someone such as one of your contractors or subcontractors. You need to be able to do that convincingly with documentation.
Many times, people will just create a spreadsheet. But anyone can put numbers on a spreadsheet after the fact. What support do you have to prove that the things you are saying today are actually things that happened in the past?
b. Daily reports are critical
The Number One way to do that is with daily reports. What are daily reports important for?
i. Weather conditions
You can support weather delays and write what the weather was like – weather it was raining such that you could not work, or the wind strong enough that you could not use a crane or a boom lift.
ii. Labor on the project
What project labor did you have on the project that day, what was the headcount? That is another item that needs to be in your daily reports along with the number of men showing up on the job and their hours worked.
iii. Materials delivered, areas worked, areas unavailable
Every day, what materials were delivered? What areas were worked on and what areas were unavailable? This is something that is very important if you want to indicate things that are impacting your work? The daily report is a great place to put that into writing. Then maybe there are other issues impeding your work.
For example, maybe you were waiting for the electrician to finish his scope of work on the second floor. You would indicate that on your daily report as, “could not access the second floor, still waiting for electrician to finish.”
Maybe you are working on a high rise and the buck hoist stopped working Monday, Tuesday, and Wednesday. So you had to bring all of your materials up to the job to each floor, through the stairwell. So that impeded your work. Those are the types of things that you want to write in your daily report.
c. Use daily reports to support your project narrative
Use the daily report to support your project narrative and explain why you are doing everything you can to achieve the project objective, and how things are outside of your control are impacting your ability to get that work done.
That is the project narrative, and you need to find ways to incorporate that into your daily reports. Because what is going to happen is you are going to submit your daily reports. Subcontractors or owners require those daily reports every day. Some require weekly reports, while some require them with your pay requests.
At a minimum, when you get to that project closeout, or if there is a dispute on the project, these daily reports are going to be your ‘Get Out of Jail Free’ card if they are written correctly. So if a contractor or an owner wants to blame you for delays and says you did not have enough men on the job.
But you can pull out six weeks of daily reports showing 10/20, or 30 people on the job to support the fact that you were there all the time in mass, that is going to help you a lot.
d. Level up
One way to level up your daily reports is the careful documentation about negative events – negative events that affect you.
Careful about documenting negative items
It is not suggested that you lie on your daily reports, or that you say something that is not true. But you do not need to use it as a tool to broadcast everything that maybe you could have done better with.
You can use other means to document those items. So maybe instead of putting issues related to things you could have done better in your daily report, maybe you want to put that in an email that you send to your project executive, the president, or other people that need to see it in your company, that would be separate and apart from the daily report.
Tip two: Photos
Documentation tip number two is photographs.
a. Photograph at least weekly, ideally daily
You need to photograph your project at least weekly. Ideally, you should do it every day. You would be surprised at the number of individuals who go to their attorneys and are asked for photos of their projects, but they do not have very many.
Photographs are critical because it is like a daily report on steroids. It gives the viewer of your photo great context about what was happening during the course of the project. So if there is an issue in your daily report, that is what you are writing about, that is impeding your work, it could pose a problem.
Let us say the buck hoist on the side of the building is not working. Taking a picture of it not working or being disassembled, or not on the building, that is a great piece of evidence in addition to your daily reports that say the buck hoist was not working.
So here are some tips on how to photograph your projects better.
b. Photograph the area of your work, but also the surrounding areas, inside and outside
Photograph the area of your work. For example, if you are a drywaller, you need to take pictures of the area before and after you drywall. But, make sure you take pictures of the surrounding areas inside and outside. For example, if there are issues around the job site that impact your work, make sure to take pictures of those things.
There are some contractors that make it a habit of taking pictures every day around the job site in various areas of the job site unrelated to their work. Those pictures have proven to be very helpful at the closeout of a job or in a dispute in ways that the contractor had no reason to know when they took the picture.
It is very easy to do this. You have a camera on your phone, and you can just snap a handful of pictures as you walk through the job site, and as you get to the area where you or your team is working. Again, take those photos every day.
You do not know what you are going to need, but you will know after the fact. You may really wish that you had a photo of ‘X’ and ‘Y.’
c. Set the photo to show the date and time stamp
Try to set up the photos to show the date and time with that stamp on the photo. That also makes it very easy to see. Obviously if you use your phone, the date, location, and time are saved in the metadata of the photo. But that is hidden in the photo so showing it on the photo is a great way to have that front and center.
d. Organize your photos with a program
Organize your photos with a program or some other system. There are lots of different systems. Procore for example, allows you to take photos and connect them right to your project file. But a lot of people also use homemade systems.
For example, they may create a text group channel for each job that they are on. They just take photos and put them there. Whichever system you use, make sure it is a system that works and that allows you to organize your photos.
e. Label your photos as many will look similar and you will not be able to distinguish them later
Make sure to label your photos as many will look very similar, and you will not be able to tell them apart later on when you need to.
For example, if you are working in, for example, a high-rise with units such as 602,603, 604, 605. You take pictures of the interior of those units or the hallways on certain floors. You are not necessarily going to be able to know or discern that that is Unit 601 or 605, or the second-floor corridor versus the fifth-floor corridor.
So you need to make sure that you find a way to label your photos so that when you go back, you know what you took the picture of.
f. Backup your photos
This point is absolutely critical. You have to find a way to back up your photos, it is easier now than ever before. Whether you use an Android smartphone, an Apple phone, or you use a system like Procore or other apps, or systems that back up your photos.
For example, there is a contractor with a texting group, who says he has lots of photos and they would text him the photos. A look at the text string showed that his phone was set up so that any text message that had a photo and was older than six weeks would automatically get deleted.
So as he scrolled up and he hit six months, there was nothing there. He scrambled to get the people who sent him the photos to pull those photos off their phone. He thought he had them but in fact he did not.
So you need a foolproof system that you check occasionally to back up your photos so that if you drop your phone and it shatters, or you lose your phone, those are not just saved on your phone. They should be somewhere else that you have access to.
g. Level up
One way to level up your photo game is to weekly take a narrated video of the project site.
i. Consider an occasional (weekly) narrated video
Walk through the project, start your video and talk about what you are seeing. That will come out on the video and you will not know when you need it, but if you undertake these documentation tips, at some point (probably within the next 18 months) you are going to think that you are glad you did it.
You are going to be thankful that you found the photo, video, or daily report that has really saved your butt on an issue.
Tip Three: Using the Right System
Tip number three is to use the right system.
a. Use any system that works for you as long as it meets these criteria
You can use any system you want to document your projects as long.
i. It is designed for your application
This is designed for the application that you are using.
ii. It is accessible to your team in the office and the field
It is accessible to your team in the office in the field.
iii. It reduces or eliminates duplicate data entry and connects to your other systems
It reduces or eliminates duplicate date entry, and it ideally connects to other systems that you already have in place in your office
iv. It will be used by the team
It should be adopted by the team.
v. Project management software
There are people who use Procore, e-Sub, SmartBarrel, WhatsApp, and Excel. Other people have their own system. They do not want to spend the money on a software system. Between email, WhatsApp, and Excel, they have a system that works. And whenever they need to produce something or support their documentation system, they have it in a form that is easily available to them.
Whatever system you use, make sure that it works, and it meets these criteria. Because it is very important. Having a great system that is great on paper that no one uses does not help you at all. You need to find a system that everyone is going to implement.
It is suggested to start small. If you do not have a system in place, the other thing you can do is take a look at whatever software systems you currently have and see if in fact, they have a project documentation component, that maybe you are not using to its fullest extent or as an add-on to the existing system that you have.
Now we have two bonus tips.
a. Bonus Tip One: Meeting Minutes
Bonus tip number one is meeting minutes.
i. Make sure to attend all meetings
Make sure you attend all the meetings that you are invited to.
ii. Speak up during the meetings to voice concerns and contradict statements you disagree with
Speak up during these meetings and voice your concerns. If someone says something that you disagree with, you need to contradict them so that it is on the record.
iii. Make sure you get the meeting minutes after the meeting
Now here is the important part – make sure that you actually get the meeting minutes after the meeting. After you have attended the meeting, you have walked out, you find out that John Smith is the one that is taking the meeting minutes.
iv. If you do not, email the person in charge of the meeting minutes and request a copy
One or two days go by, you do not get the meeting minutes, so you email John Smith, and ask where the meeting minutes are. Maybe he sends them to you, maybe he does not. If you do not get those meeting minutes, you need to email them and make sure you request a copy.
v. Review minutes and respond in writing where they are incomplete/inaccurate
Review the meeting minutes when you get them and respond in writing. An email is fine. Where the media meeting minutes are incomplete or are inaccurate, someone may have said something at the meeting that was not properly reflected in the meeting minutes. Maybe it was you.
You need to put whatever was missed out into an email in response. So if they are incomplete or inaccurate, you are going to respond.
Fast forward 18 months after the project is done if there is a lawsuit. What is going to happen? The lawyers are going to comb over all these documents – the daily reports, the photos, the meeting minutes, and they are going to recreate a series of events that may or may not be truly accurate about what happened.
And to the extent that you do not properly document those things that happened on the job to support your narrative of what transpired, you will not have the documentary support to advance your position.
So a court or jury is going to look at those meeting minutes and say that the other side said you were late at every meeting. The meeting minutes say that you were late and there is no response. You need to have a response if the meeting minutes are inaccurate.
If you get those meeting minutes, you read them, and they are not right, you need to send a response back, and correct them.
vi. Repeat weekly
You need to do this every week, whenever those meeting minutes come out.
What to do if you do not get any minutes or there are no meetings
One way to level up is if you do not get any meeting minutes, maybe no one ever sends them to you but there were meetings. Or there were no meetings at all. Then what you are going to do is send an email with your summary of the meeting.
No one sent you any minutes. You are going to write the meeting minutes and you are going to send them the way you want to write them, and you are going to send them to the people who were running the meeting.
If there was no meeting, you are going to ideally summarize every week in an email that you are going to send them the key events during the week. This is going to go to all relevant parties.
What is absolutely critical that you understand is that the party that has the most and best documentation is typically going to win the fight at the end of the day when it comes time to get paid.
So you have done the work, you are owed money, you record a lien, and now you need to get paid. If the lien itself does not get you paid, then you are going to have to file a lawsuit. If that is the case, one of the best ways to get paid and to support your claim is in fact to have proper documentation.
b. Bonus Tip Two: Your Contract
The second bonus tip is your contract.
i. Do not sign any contract handed to you
Do not sign any contract that is handed to you blindly.
ii. Review the contract and make changes
You need to review the contract and make changes as necessary.
iii. Every owner/contractor tells you they will not change contract, but they have and will
Every owner or contractor is going to tell you that they will absolutely positively not make changes to the contract. But every contractor and owner has and will make changes to their contract for you and for other individuals.
iv. Use an addendum to make changes
When the contract is reviewed, an addendum is provided. Many times, some or even most of that addendum gets accepted.
What are some of the things that you want to put in this addendum to the contract?
- Payment terms: You want to address payment terms.
- Right to stop work if not paid: You want to include the right to stop work if you are not getting paid. This may sound obvious, and people assume that if they are not getting paid, they automatically have the legal right to stop working.
Most contracts in construction say the complete opposite. Even if you are not getting paid, even if change orders are not approved, you have to keep working. The only way you will have the legal right to stop working is if you put it in your contract.
- Limiting your indemnity to your insurance: Indemnity is the right to say that something bad happened and that the other side needs to pay for it. That is why in many cases you have insurance. So having that insurance, you would like it to stand in front of any indemnity obligation. But the way most contractor contracts are written, the indemnity obligation is separate from your insurance. You want to tie the two together.
- Longer notice to cure: You want a longer notice to cure. Typically, it is 48 hours or 72 hours. That is not enough time to fix a problem. If you have 48 hours' notice and they give it to you at 5 pm on a Friday, you have to have the problem fixed by Monday morning.
So in your addendum, you want to include a longer opportunity to have notice and opportunity to cure.
- Material escalation: Material escalation is a big deal. Most contracts say that your price is your price and will never change. However, many individuals sign contracts and get the right to have material escalation clauses. So within certain parameters if prices go up, you can increase your price.
These are all of the things available to you. Do not think that just because the contractor or owner says they will not make any changes, that they will not.