By Joseph P. Dirik

Imagine my surprise when I looked up from the counter in the pro shop and saw my old friend Bubba Wilson. Over 20 years had passed since we worked together as field engineers on a power plant in Brazos County.

"Joe, what have you been up to all these years? I heard that you became a lawyer," Bubba said. "Yes, I'm practicing construction law now," I replied.

It turns out that Bubba now has his own construction company and is doing pretty well. Not only that, but he just joined my club, so I guess we'll be seeing a lot of each other.
"What is your biggest challenge with the business?" I asked Bubba.

"We're very busy and I can't seem to get my engineers to stay on top of their paperwork," he said. "That's a serious problem that can cause trouble when you try to negotiate claims or wind up in arbitration or court," I exclaimed.

"I know," he said. "I'm also worried that I won't find out that a job is getting into trouble until it's too late. How about some ideas for my new SOP manual?"

Good project documentation provides the who, what, where, when and how of a construction project. The well-managed contractor requires and maintains good records as a routine matter. The primary reason for doing so is to help monitor the project and identify problems before they become serious.

But a contractor that fails to keep good records could also find itself at a disadvantage in a legal dispute or claim negotiation. At the very least, your attorney will spend a lot of his time and your money searching through disorganized or incomplete records.
As a result of my conversation with Bubba, here are seven ways to improve project documentation.

Daily Reports

Insist that each salaried person on the project prepare a daily report. Daily reports are the most basic project record. At a minimum, the report should contain entries for weather conditions, work activities, meetings held, verbal instructions given or received, delays and causes and conversations with subcontractors, subs, architects, engineers and the owner. Daily reports are essential tools used to develop or defend against a construction claim.

In Texas, for example, a contractor seeking damages for a delay caused by the owner generally must prove by competent evidence the duration of the delay; the fact of the delay; that there was no greater fault of the contractor involved; and the causal relationship between such delay and necessary and reasonable additional actual costs. A well-prepared daily report should include all of this information.

Correspondence Control

Who has the authority to send correspondence to outside parties? Consider sending all project correspondence under the project manager's signature. For large projects, designate several people or make sure that correspondence is reviewed and approved before it is sent. Don't let an inexperienced field engineer send a damaging letter that can be used against you later.

Correspondence that is left unanswered can also prove damaging during a dispute. Attorneys usually get involved after the project is completed and we commonly find letters that our clients have failed to answer. Always answer correspondence you receive that takes a position, asks you to take action or otherwise raises an issue. In other words, don't let the other side have the last word.

Document Review

Every document should identify its author and the date it was prepared. Construction projects generate a lot of paper. Many of the documents attorneys review in discovery are notes, sketches, studies, spreadsheets, analyses or other informal pieces of paper. In my experience, most documents fail to include the author's name and date. Knowledge of the author allows the attorney to quickly associate the document with a particular witness. Knowledge of the date can turn the document into a crucial piece of evidence.

No Smoking Guns

One of the reasons why I suggest that supervisors should review documents prepared by their staff is to catch and correct inappropriate comments. Negative comments about people can be used with great effect against you in a trial.
An example of another less obvious "smoking gun" is the "lessons learned" evaluation prepared after project completion. The goal of eliminating past mistakes on future jobs is admirable, but be aware that such reports would almost certainly be discoverable in a lawsuit or arbitration proceeding. Your opponent could use your own admission of mistakes or errors against you.

Meeting Minutes

Always volunteer to prepare the meeting minutes. This is my favorite tip because it can provide the greatest benefit with the least effort. If you write the minutes of a meeting, you get to control the issues that are recorded and emphasize the topics of particular importance to your company. Be sure to send a copy to all attendees and ask them to provide any corrections or comments.

Collect Records

Always collect records when an employee leaves. Whenever a project member is transferred, resigns or otherwise leaves, ask him or her to carefully identify and organize personal files.

Stay Organized

Develop an effective approach to organize and retain electronic records. Engineers and accountants love spreadsheets. Email is used extensively on almost every project. You need a document control system that retains this information in an organized and easily discoverable fashion.
The discovery phase of a construction dispute can be very expensive. Well-organized and complete records will help bring your attorney quickly up to speed. This translates into reduced legal costs and could help you resolve an issue before it develops into a full-blown dispute.

Joseph P. Dirik is a civil engineer and attorney. He is a member of the Construction Law Practice Group at the Dallas office of Jenkens & Gilchrist PC.