Rarely is there a project that does not involve extra work. Whether it be directed by the owner or prime contractor, or arising out of changed conditions, extra work occurs on nearly every project.
Generally, contractors are concerned with performing the work, not documenting every little detail of the extra work. This is especially true when there is a need to perform the extra work as quickly as possible so as to not impact the construction schedule.
But if the contractor has not adequately documented the extra work the owner or prime contractor may dispute the contractor’s entitlement to compensation for the extra work. Often this results in costly and time consuming litigation.
Recreating the documentation after the fact is typically less accurate and, in some cases, will embolden the owner or prime contractor in disputing the claim. Often, the owner or prime contractor will conclude that the contractor did not accurately bid the project, went over budget, and is now seeking to retroactively “create” extra work issues.
Needless to say, taking the time to document the extra work contemporaneously can expedite the resolution (and thus payment of) extra work claims. The following are several methods that can and should be utilized to contemporaneously document extra work claims:
1. Notice. Of course, reference must first be made to the construction contract itself. Most contracts require formal notice of extra work claims to be provided within certain time parameters (e.g., prior to commencing work or as soon as possible). These notice procedures must be followed or else the claim may be waived.
2. Proposed Change Orders (PCO) or Change Order Requests (COR). Contracts may also require that Proposed Change Orders or Change Order Requests be submitted. Regardless of the contract requirements, PCOs and CORs should be used. Even if the contractor knows that the owner or general contractor will summarily reject the proposal, issuing a PCO/COR provides additional notice that the contractor was performing (at least what it believed to be) extra work.
If the PCO/COR is issued prior to the extra work being performed, it typically includes an estimate of the anticipated costs (Rough Order of Magnitude). In such situations, the PCO/COR should clearly indicate that it is only an estimate, and not a hard figure for the work to be performed.
3. Field Change Orders / Time and Material Ticket. The contractor should use a Field Change Order or Time and Material Ticket in the field each day that extra work is performed. Even if the owner or general contractor will not execute the change order or will only sign to “verify time only,” the forms provide daily evidence of both notice and that the work that was performed.
4. Daily Logs or Reports. It is important that the daily logs or reports be as detailed as possible; detailed descriptions of the manpower (including any subcontractors), equipment (including operated and idle hours), major work activities, and any delays or problems. Dailies should also reflect any oral instructions by the owner or general contractor, informal meetings, or inspections.
Dailies should be clearly handwritten or else transcribed from handwritten notes. The author may not be available down the road and an illegible document provides no value in a dispute with the owner or general contractor.
5. Invoices. Needless to say, invoices for materials and equipment rentals must be kept in writing and preserved to ensure payment for any extra third-party costs.
6. Photos / Videos. Photos and videos are critical to claims for extra work, especially changed conditions. Photos or videos should be taken prior to the work commencing and throughout the performance of the work. Photos or videos should have a time and date-stamp.
7. Meeting Minutes / Notes. Meeting minutes and notes are contemporaneous records that may reflect that extra work was directed by the owner or general contractor, or at least discussed between the parties. Again, the more detailed the better.
8. Requests for Information (RFIs). Requests for Information support claims that changes were made to the construction drawings, which necessitated that different or extra work be performed.
9. Project Schedules. Weekly or monthly project schedules help to document that extra work was performed or that changed conditions were encountered. Accurate project schedules are critical for the presentation of delay claims.
10. Correspondence. Written project correspondence, whether it be by email or letter, can reflect what work was requested or directed, notice to the owner or general contractor, the conditions encountered, the length of time to perform the work, etc.
Extra work occurs on nearly every construction project. Although litigation may not always be avoidable, using these methods to document the extra work contemporaneously may expedite the resolution (and thus payment of) extra work claims.