ACPA Quarter 3 2019

Concrete Pavement Progress 22 A B O U T T H E L A W Protecting Your Interests with a Good Paper Trail By Thomas R. Olson, Esq. and Rielly J. Lund, Esq. WE ALL WANT TO LIVE IN A WORLD where you can simply “shake on it” and trust that the handshake is as good as a signature. For many contractors, handshake agreements have defined how they have successfully done business over the years. Unfortunately, we have seen too many clients suffer losses because there was no written record of an agreement made in the field. In today’s con- struction, the problem is that people often forget, take new jobs, and/or lie. In addition, people often fail to listen or clearly communicate. The following will address the best ways to protect your interests with a good paper trail. Keep your own notes from 9 pre-construction meetings. Many important agreements are reached at the pre-con meetings, such as when the contractor will have access to the site, when the contractor should start work, when utilities will relocate their facilities, schedule approval, contractor’s intention to complete early to earn related incen- tive, value engineering, etc. While it is standard for engineers to take and distribute meeting minutes, our experience is that engineers do not always clearly and fully document important agreements. To ensure all agreements are prop- erly documented, contractors should keep their own notes and distribute them to the engineer immediately after the meeting. Memorialize any verbal agreements with a written confirmation. Whenever you reach a verbal agreement, before you begin work in connection with that agree- ment, immediately send an email or letter that explains your understanding of the conversation and/or agreement and conclude with the follow- ing language: “If your understanding is different, please let me know immediately, in writing.” Keep detailed daily records of your operations with a Daily Diary or 9 Daily Log. You should not only list the specific items of work performed each day, but also note any issues you encountered, meetings you had, and agreements you reached. In the event of a later dispute, such documents are considered the best evidence of what was happening at the time. Take detailed notes of any meetings you have regarding important issues or project changes. Your meeting notes should list everyone who participated, explain what items were discussed, and note any agreements reached. Depending on the importance of the meeting, you may want to distribute your notes to the owner/engineer so there is no misunderstanding regarding any decisions made. Save any and all emails exchanged about any project changes. If a dispute arises regarding any project changes, you should have easy access to any emails discuss- ing the project changes, particularly those emails that memorialize any important discussions or agreements reached. Track idle equipment time. Delay is an unfortunate and regular aspect of construction. While the cost of project delays can be huge, these costs are often overlooked by contractors. The cost of every hour of idle equip- ment is properly charged as half the operated rate. The good news is that most public contracts provide that a contractor can be paid for idle equipment. The bad news is that contractors fail to get paid because they fail to document the time when their equipment is idle. To ensure that contractors are paid for their idle equipment, contractors should document both the cause of idle equipment, what equipment is idled, and how long the equipment is idle. In addition, contrac- tors need to ensure that their internal software tracks idle equipment. Our experience is that many, otherwise successful, contractors only track operated equipment, not idle. Make sure you follow the contract’s claim and notice procedures (even if you believe you have a verbal agreement regarding the issue). Your contracts will include certain procedures you are required to follow when you encounter any project change issues, including differing site conditions, limited or late site access, sig- nificant changes in the character of the work, and extra, deleted, decreased, delayed and/or disrupted work. Such procedures normally in- clude a requirement to give written notice as soon as the change is discovered (and before work is performed in the affected area), written notice of your intent to file a claim, written authorization to perform affected work, submittal of certain records to document the cost and time impacts of the change, appeal of an engineer’s decision, and request for mediation and/or arbitration. Un- less and until you have a formal written change order or other written agreement regarding any project changes (which addresses ALL related cost and time impacts), you should make sure you are doing everything that may otherwise be required by the contract. This should prevent the owner/engineer from raising a procedural defense to an otherwise valid claim. Make sure you document any design changes that are the responsibility of the owner or engineer. Two things often occur on construction projects. First, notwithstanding good engineering, there is a design bust and work cannot be performed per the planned means and methods. As a result, the project work will be more costly and, in some circumstances, the work simply cannot be performed. Second, when design busts occur,