What separates meeting minutes from the rest of the standard project documentation is that all the project stakeholders are expected to be present at these weekly meetings. Usually, the owner, the contractor, the design team, and maybe even the subcontractors are at these meetings.
The construction project meeting minutes or record produced from this meeting are assumed to be an accurate representation of the current status of the project and the execution plan for at least the coming week. Furthermore, because all the stakeholders are present, it is assumed that the information provided in these meeting minutes is agreed to by all parties. It is accurate, reliable, and thus the meeting minutes become a very important contemporaneous document. Because of the importance placed on meeting minutes, they must be complete, inclusive, accurate, and fact based.
Complete the construction project meeting minutes and record all topics discussed at the meeting, not just the standard headings such as safety, RFI’s, submittals, schedules and changes. These are important topics and they should be discussed weekly, but if the conversation diverges to discuss an issue with the concrete supplier whose concrete didn’t come up to strength or how weather impacted the site work or how a failed township inspection was impacting progress, these conversations must also be documented.
Sure, these issues may show up in other project documents like inspectors daily reports or the in the project correspondence, but where those reports might be one dimensional or one-sided, the meeting minutes should reflect all the views
In order to understand how pre-construction really unfolds, we have to document it. It is particularly important in a situation where you don’t have a clear bid date. On many public projects bid on a lump sum basis, there is something magical about getting beyond the bid date. Once you get beyond the bid date, some believe the only thing that really matters is that number and the contract that we sign. But on many projects, like projects with GMPs or negotiated prices, the events that occurred prior to the start of construction can have as much importance as the events that happened after the start of construction.
There is not necessarily anything super important about the bid date. It is just another event in a long series of events that leads to the successful completion of the project. This early phase, when we don’t even have a real project in hand, is still a time when we need to be preparing our documentation and recording what is happening on the project. That is true of the contractor, the owner, and the design consultant. Frankly, everything I say here applies to not only construction projects, but the design portion because that is very project oriented and it has its own documentation demands.
Here’s an example of documentation that contractors may want to consider during the pre-bid phase. What are my observations and assumptions that go into:
- My bid
- My price
- My plan for executing the work.
This may even accompany a submission of a price
Let’s talk a bit about electronic versus paper construction documentation.
The reality is an astonishing amount of what we do today, particularly to someone like me who has been working on construction projects for 30 years, is done electronically. We have not eliminated paper, but certainly the amount of paper we consume, strictly for managing our project, has been dramatically reduced.
Why Electronic Construction Documentation is Different
The big difference when it comes to electronic documents is really storage. How do we keep track of information in a useful and sensible way so that we can retrieve the right thing quickly? Those of you familiar with the days of paper files know that with a lot of work, organization, procedure, and insisting people do the right thing, you could build a pretty comprehensive paper file. And it was relatively easy to access and come up with the appropriate information. Typically, we asked our support staff to help us accomplish that.
In an electronic world, a lot of that organizational structure really falls upon individuals. It also falls on developing protocols and agreements as to how we are going to store the documentation (in joint storage locations on the same servers for example). And then, of course, the question always becomes, “What am I going to share with whom?”
Security of electronic information is also an issue. With paper documentation, you have to worry about fire or someone grabbing a folder and not bringing it back.
But when you are using electronic documentation, the number of concerns
There are several reasons why we should care about how we document construction projects, how we put it together, how we file it, how we use it, and how we can make it better. Let’s talk about some of those reasons.
Sometimes we end a project in a dispute. This dispute is not resolvable simply through negotiations. We might have to mediate, we might have to arbitrate, or we might have to litigate, God forbid.
Clearly, project documentation is essential to success in these kinds of processes. The truth of the matter is that sometimes, in some of these formats, documentation is the only thing that matters. It is given more credibility than oral presentations, arguments, or other information. People do not rely on memory as much as they rely on what is written down.
Another reason we care is very often disputes can be resolved by looking at the facts and understanding what happened. If those facts are written down, it is much easier to recall them. It is easier to recall their significance. It is easier to recall their context. It is easier to discuss them frankly. Once we know who knew what and when they knew it, often many of our differences of opinion can be resolved successfully.
One of the things about good documentation is that it can prevent us from having to go to mediation, arbitration, or litigation. It allows us to resolve our issues on our own. We don’t have to throw the issue over the fence
If we acknowledge the fact that we’re seeing more claims for inefficiency or more claims with an inefficiency component, there has to be something that both owners and contractors can do to protect themselves. There is. Here are seven recommendations to help you track, evaluate, and resolve inefficiency issues on your projects.
Establish Standard Processes
You have to find a way to properly track both the work completed and the resources expended to complete that work, in order to perform a productivity or inefficiency analysis either during the project or after the fact.
How Do We Do That?
Well, we have to establish a standard process for recording a variety of information including:
Tracking the quantity of work completed per operation. (For instance, take the time to specifically track the work completed per operation on a daily basis.)
Tracking the actual labor and equipment hours per operation. (Actual labor and equipment hours are tracked on nearly every project; however, assigning those expended hours to a specific operation is often the key missing piece of information.)
Recording when the impacts occur and how those impacts affect the work.
Make Sure It’s Written Down!
Another point we have to remember is that “if it wasn’t written down, it didn’t happen.” If you run into any issues, problems, or impacts during the course of the project, you should record that either in a daily report, a diary, an email, or a memo to the other side.
In this Ideas & Insights, we’re going to discuss methods for measuring lost productivity or inefficiency. And we’re going to discuss five of those methods, in the following descending order of preference:
Comparing Actual Productivity from the Subject Project to Different Project
Comparing Actual Productivity to the Contractor’s Bid or Estimate
Published Inefficiency Factors
The preferred method, as determined by courts and triers of fact, for measuring lost productivity or inefficiency is the measured mile. The measured mile method compares the achieved productivity of two periods of performance for the same operation on the same project. The two periods of performance are called the unimpacted (efficient) and impacted (inefficient) periods.
A comparison of the productivity in the unimpacted and impacted periods will result in the calculation of the inefficiency factor, which is the productivity of the unimpacted period minus the productivity in the impacted period divided by the productivity in the unimpacted period (U-I/U). This inefficiency factor represents the percent of lost productivity in the impacted period as compared to the unimpacted period.
The reason that this method is the preferred is because of its reliance on the actual or achieved productivity.
Why is the “actual or achieved productivity” feature of a measured mile method so important?
Well, it’s because the contractor’s achieved productivity removes variables or problems in the source data that could affect the accuracy of the analysis. For example, use of the actual or achieved production information of the same or
Let’s talk about how I go about evaluating allegations of inefficiencies on a construction project.
First and foremost, the evaluation of any request for additional compensation is a three-step approach. These three steps are:
Measure the Impact
Quantify the Damages
The entitlement step of an inefficiency or lost productivity analysis starts with the contract. We must ask the question:
Does the contract support the recovery of additional costs that result from the inefficiency?
Before performing any evaluation of the project data, the contractor must demonstrate that the contract affords the contractor the ability to request additional compensation for the alleged change that occurred.
Then, after establishing that the contract provides the contractor with the ability to seek additional compensation for the alleged change, the contractor must then establish that there was, in fact, a direct cause and effect relationship between the alleged change and the alleged inefficiency.
What we find in a lot of instances is that many claims, especially those with inefficiency or lost productivity components, fail to establish this cause and effect relationship between the alleged change and how the alleged change affected or impacted the efficiency of the contractor’s operation.
One thing to remember here is that, while inefficiencies can cause additional costs; the inverse is not true. Just because a contractor’s operation experienced additional costs, that does not mean that the increased costs was caused by the operation being less efficient. Or more to the point, there’s no guarantee that that
Now that we’ve talked about and identified some sources of inefficiency, let’s really drill down and gain a clear understanding of what the essentials of productivity and inefficiency are. These two terms are NOT interchangeable.
Let’s start with productivity. What is it? Productivity is the ratio of the work performed to the resources expended to complete that quantity of work. This succinct definition of productivity requires us to further define the phrases “work performed” and “resources expended.” The “work performed” component of the ratio should always be a measurable quantity of work, like 200 cubic yards of concrete or 15,000 linear feet of pipe, that represents the portion of the operation that is being evaluated. The “resources expended” component of the ratio should be the documented effort expended to complete the quantity of “work performed.” It should be described in terms of labor hours or crew hours, or some other relevant measure of resources. An example of productivity would be cubic yards of concrete installed per labor hour.
The quantity of work performed and resources expended are the preferred project information to be used when measuring productivity. All too often, when attempting to demonstrate instances of lost productivity, contractors, owners, and analysts compare planned and actual costs or rely on an operation’s percent completion. Contractors, owners, and analysts should avoid the trap of using cost-related data in calculating productivity, because cost-related data does not necessarily represent the quantity of work performed
Let’s talk about the potential sources of inefficiency. There are many. They can include, but are not limited to:
- Extended periods of overtime
- Unanticipated inclement weather
- Revised means or methods instituted to overcome a delay (owner or contractor caused)
- The experience (also called learning) curve of each operation, you don’t always achieve the planned level of productivity on day one
- Equipment breakdowns
- Additional shifts (requiring additional labor and, potentially, additional management and coordination)
- The number, magnitude, and timing of changes
- Labor shortages (the contractor might be unable to obtain the required level of skilled labor)
- Poor management
- Site conditions and site access (differing site conditions or lack of access to the project)
- Increase or decrease in crew size
- Site organization or access (a contractor’s productivity may be reduced because the owner did not provide the contractor with access to the project site as stated in the contract)
- Trade stacking
- Erroneous or ambiguous drawings or specifications
- Out-of-sequence work
As you can see, there are many potential factors that could cause the contractor’s operation to be less efficient.
When we talk about inefficiency, the party responsible could be the owner, the contractor, or a third party. Therefore, understanding the reason for the contractor’s lost productivity and the party responsible determines whether the contractor will be entitled to additional compensation for the inefficient operation.
Mark Nagata is a Director/Shareholder of TRAUNER and is an expert in the areas of critical path method scheduling, delay and inefficiency analysis, and construction claim preparation and evaluation. He loves
More and more of the construction claims that we review, evaluate, or prepare include a lost productivity or inefficiency component.
What is Inefficiency?
When a contractor alleges that one of its operations is inefficient, it typically means that the contractor did not achieve his or her anticipated level of productivity and, thus, incurred increased costs in the performance of that work item.
Why is a Contractor’s Planned Level of Productivity an Essential Part of its Bid Price?
Well, productivity on construction projects became a concern the instant contractors became interested in making a profit, which is probably right after the shovel was invented.
It really comes down to this. When a contractor submits its bid, its price is based on achieving a particular level of productivity on each of the work packages that comprise the entire project. The contractor’s ability to achieve or exceed that level of productivity has a significant impact on its profit margin/bottom line.
For example, if an item of work is not completed within budget, then one of the reasons for the increased cost could be that the contractor did not achieve its planned level of productivity. This lost productivity or inefficiency is caused by expending more labor or equipment hours than planned to complete the work item. This expenditure of additional hours can lead to real, significant, and unanticipated increased costs.
As projects have become more complex, the potential for experiencing inefficiencies has multiplied. Because complex projects have many different operations