2019.09.22 lorman documentation presentation · contract review and negotiation contract review and...
TRANSCRIPT
Construction Documentation:
Preparing Effective Job Records
Presented By:
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mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: [email protected] • website: www.lorman.com • seminar id: 406949
Mark A. Smith, Esq., Carey, O’Malley, Whitaker & Mueller, P. A.
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Construction Documentation:
Preparing Effective Job Records
©2019 Lorman Education Services. All Rights Reserved.
All Rights Reserved. Lorman programs are copyrighted and may not be recorded or transcribed in whole or part without its express prior written permission. Your attendance at a Lorman seminar constitutes your agreement not to record or transcribe all or any part of it.
Full terms and conditions available at www.lorman.com/terms.php.
This publication is designed to provide general information on the topic presented. It is sold with the understanding that the publisher is not engaged in rendering any legal or professional services. The opinions or viewpoints expressed by faculty members do not necessarily reflect those of Lorman Education Services. These materials were
prepared by the faculty who are solely responsible for the correctness and appropriateness of the content. Although this manual is prepared by professionals, the content and information provided should not be used as a substitute for professional services, and such content and information does not constitute legal or other professional
advice. If legal or other professional advice is required, the services of a professional should be sought. Lorman Education Services is in no way responsible or liable for any advice or information provided by the faculty.
This disclosure may be required by the Circular 230 regulations of the U.S. Treasury and the Internal Revenue Service. We inform you that any federal tax advice contained in this written communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding federal tax penalties imposed by
the federal government or (ii) promoting, marketing or recommending to another party any tax related matters addressed herein.
mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-802-1131email: [email protected] • website: www.lorman.com • seminar id: 406949
Prepared By:Mark A. Smith, Esq., Carey, O’Malley, Whitaker & Mueller, P. A.
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It’s a “He Said, She Said” World – But The Documents Matter
Mark A. SmithCarey, O’Malley, Whitaker, Mueller, Roberts & Smith, P.A.
Tampa, Florida
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Lorman Education ServicesProvider Number – J206
Construction Documentation: Preparing Effective Job RecordsCourse Number - 1097627
Mark A. Smith, Esq., Carey, O'Malley, Whitaker & Mueller, P. A. 10-31-2019
Credit(s) earned on completion of this course will be reported to AIA CES for AIA members. Certificates of Completion for both AIA members and non-AIA members are available upon request.
This course is registered with AIA CES for continuing professional education. As such, it does not include content that may be deemed or construed to be an approval or endorsement by the AIA of any material of construction or any method or manner ofhandling, using, distributing, or dealing in any material or product._______________________________________
Questions related to specific materials, methods, and services will be addressed at the conclusion of this presentation.
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© 2019 Lorman Education Services. All Rights Reserved.Lorman programs are copyrighted and may not be recorded or transcribed in whole or part without its express prior written permission. Your attendance at a Lorman program constitutes your agreement not to record or transcribe all or any part of it. This publication is designed to provide general information on the topic presented. It is sold with the understanding that the publisher is not engaged in rendering any legal or professional services. Although this manual is prepared by professionals, it should not be used as a substitute for professional services. If legal or other professional advice is required, the services of a professional should be sought.
This disclosure may be required by the Circular 230 regulations of the United States Treasury and the Internal Revenue Service. We inform you that any federal tax advice contained in this written communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding federal tax penaltiesimposed by the federal government or (ii) promoting, marketing or recommending to another party any tax related matters addressed herein.
The opinions or viewpoints expressed by the faculty members do not necessarily reflect those of Lorman Education Services. These materials were prepared by the faculty members who are solely responsible for their correctness and appropriateness.
Do you know how to maintain and prepare a detailed and organized project document?
Even in a paperless world, maintaining clear and detailed project documentation is increasingly essential for construction risk management. Despite this, even sophisticated parties in construction often have no established or organized plan approach to managing project documentation. This topic focuses on the need for, and benefits from maintaining detailed and organized project documents. The information will highlight the advantages that come from taking such an approach, and how you can utilize it to improve positions for both negotiation and dispute resolution.
CourseDescription
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LearningObjectives
At the end of the this course, participants will be able to:
1. You will be able to discuss why proactive management of project files is essential for effective
construction risk management.
2. You will be able to identify when project events require memorialization and use of
correspondence with project partners.
3. You will be able to recognize when more aggressive steps are needed to protect your interests.
4. You will be able to review project development and determine whether sufficient care was given to
project management.
PANELISTS Mark A. Smith
813.250.0577
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The Current State of the Industry Recent years have seen tremendous growth in civil residential, and commercial, construction.
Overall constructions pending in Q4 2016 was 4.5 times higher than 2015.
Many areas of the country continue to see heightened activity.
Growth Brings ChallengesMuch of the country, particularly the Sun Belt and Southwest, experienced a substantial construction boom from 2003‐2007.
This construction is now 8‐14 years old.
These portions of the country are now seeing substantial spikes in discrete categories of construction defects (drywall, stucco, roofing).
Post‐recovery construction has also spiked, suggesting that this trend is unlikely to dissipate.
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Projects Bring Their Own Challenges
Cost
Contracts
Obligations
Outside forces
Claim‐Profiteering
Financial Pressure
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How Do Disputes Get Resolved? Litigation
Arbitration
Informal Settlement
Mediation
Neglect
Fatigue
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What Always Matters? PAPERWORK:
Core contract documents
Internal communications
Field Communications
Photographs
Video
Receipts
YOUR RECORD
What is Risk Management?
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What is Risk Management?
What is Risk Management?
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What is Risk Management? Dealing with allocation of responsibility for uncertain, but not unforeseen, future events.
Operational personnel are uniquely situated to address these issues proactively.
Why Deal with Documentation? Money!
A weak risk management approach can reduce profit margin.
A strong risk management program protects profit margins, promotes industry reputation, minimizes personnel distraction and otherwise contributes to overall efficiency and profitability.
No company can afford weak risk management in today’s marketplace!
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Why Focus on Documentation? Financial success is dependent on effective risk management.
On a personal level:
Job security
Financial improvement
Overall satisfaction
Not spending time with lawyers
Central Elements of Risk ManagementOperations Side Issues:
Contract Review & Essential Terms
Correspondence & Project Management
Dispute Resolution
Personnel
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Contract Review and Negotiation
Contract Review and Negotiation
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Contract PrioritiesRealistically, focus should be on: Price Schedule Insurance Indemnification Differing Site Conditions Dispute Resolution Payment Liability/Damages Project Specific Priorities Legal Binds (pay when paid, etc.)
Contract Review
Contract review:
Understand where risk allocated between parties.
To identify legal nuances of contract terms.
Develop familiarity with key contract terms before project begins!
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Contract Review: Become familiar with main issues and owner
postures
Understand pitfalls of Non‐Standard Form Contracts Generally owner biased
AKA “Trust‐Me” Contracts
Use of a non‐standard form contract may indicate an owner prone to unrealistic expectations
May not be appropriate unless there is a strong established history with the project owner
Understand pitfalls of Standard Form Contracts!
Contracts – Key Details How are delay and delay damages treated?
Is the Contractor entitled to reasonable time extensions? Is there a no damage for delay clause? Are the owner’s delay damages fixed at a reasonable liquidated damage rate and is there a cumulative cap on liquidated damages?
Is there a mutual waiver of consequential damages, or just a waiver by one side?
Will the contract language result in assuming some of the architect’s design liability or contractor’s performance obligation?
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Contracts ‐‐ Key Details Is the insurance program reasonably comprehensive and
coordinated throughout the contract?
Are there multiple indemnification obligations that seek to make the Contractor responsible for the negligence of the owner and other third parties over whom the contractor has no control?
Is the dispute resolution procedure fair or is it designed to promote unintended waivers and forfeitures by the Contractor?
Are there adequate changed conditions and change in law clauses?
Are the payment terms reasonable and is there adequate protection for the Contractor in the event of nonpayment?
Know Your Contract! Develop pre‐project contract familiarity.
Ask questions about areas where there may be doubt.
Keep a checklist for addressing issues as they arise.
You’ll be happier working out legal details pre‐project than post‐project.
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Know Your Issues! Where are cost/profit centers?
Where are supply side labor/material issues?
Who are personnel that can/can’t accomplish tasks?
Correspondence & Project Management Don't fail to give a prompt default notice when payment is not timely.
ACTION ITEMS
LOCATE CONTRACT
NOTICE PROVISION?
DEFAULT LANGUAGE?
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Correspondence & Project Management Don't keep working after delay in payment is not cured.
ACTION ITEMS
LOCATE CONTRACT
NOTICE PROVISION?
STOP WORK LANGUAGE?
COMMUNICATE WITH SUB
Correspondence & Project Management
Don't install contrary to design or specifications without written instructions.
Risk transfer:
Architect Engineer Responsible for Design
Owner Warrants design to Contractor
Contractor is entitled to constructible project
Don’t become the designer.
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Correspondence & Project Management
Don't engage in design, “value engineering,” or modification activities.
Don’t try to be the designer. Understand the submittal process. Document the process. Changes have to be in writing: – not oral.
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Don't forget to perfect lien/bond rights by serving notices timely filing a lien or bond claim.
Understand deadlines and timing requirements.
Calendar the deadlines.
Understand the blanks in the form
Understand the risks
When in doubt, ASK!
Take pictures of damage to installed work or defective neighboring work or anything that may impact performance.
… and remember to give notice!
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Create a written record of the work performed and any other project issues.
Disputes about who did what.
Design?
Products?
Adjacent work?
Careful with terms of art
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Use business email only.
No texts.
No personal email for work.
Use good judgment.
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Retain a project file with correspondence, contract documents, and instructions used in the field.
Retention requirements.
Spoliation.
Proving the case or defense.
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Dispute Resolution
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Dispute Resolution Proactive posture to quickly and cost‐effectively resolve disputes on a project
Dispute with owner
Tiered negotiation process
Designed to resolve the dispute at lowest level
Maintain good relationship with owner
Bring actions against owner only as a last resort
Consider reputation
Consider details of project posture
More Dispute Resolution Dispute with subcontractors
Insulate owner if possible
Address problems immediately and resolve them as soon as possible
Consider reputation/potential future dealings
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Subcontracts To the maximum extent possible, flow down to each subcontractor all responsibility owed by the contractor to the owner with respect to the subcontractor’s work.
Avoid accepting a higher level of risk than can be transferred to subcontractors.
Use well qualified and financially solvent subcontractors and establish relationships for repeat business.
Subcontracts – Legal Issues Develop strong standard subcontract forms which spread its risk among the subcontractors.
Maintain consistency in standard subcontract to develop skill in managing issues.
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Personnel Turnover is endemic in construction – but developing effective employment policies can aid in maintaining valuable and effective personnel.
Dealing with discrimination and harassment claims in a swift, effective manner can minimize negative fallout.
Personnel Addressing personnel issues early and quickly helps to keep things from escalating, and consequently, lowers costs.
Effective personnel management can also benefit reputation and competitiveness.
Public owner clients typically insist upon nondiscrimination clauses in their contracts.
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Memorialization Photos—cheap, easy, ubiquitous
Videography—Also cheap, easy, ubiquitous
Emails, texts—Cheap, easy, ubiquitous
Document Management– In a Nutshell Work to allocate your risks, or they’ll be allocated for you!
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Course Evaluations
In order to maintain high-quality learning experiences, please access the evaluation for this course by logging into CES Discovery and clicking on the Course Evaluation link on the left side of the page.
This concludes The American Institute of Architects Continuing Education Systems Course
Lorman Education Services
Michelle Shepherd – C.E. Coordinator
Thank you for choosing Lorman Education Services for your continuing education needs.
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Notes
