How Can Construction Documentation Save You Millions?
The right documentation can mean the difference between a construction project’s success or failure.
Article By: Nick Hertzman, Unearth Labs
Last Update: November 2018
Many construction workers view documentation as tedious, time-consuming, and unhelpful. It’s understandable why; the process isn’t easy. Unfortunately, neglecting to document construction can be exceedingly expensive and time consuming. When something on a project goes wrong, as it often does, the process of determining who is responsible can mean the difference between taking a profit or a loss. According to the Arcadis Global Construction Disputes Report, in 2017 the average construction dispute cost $42.8 million and lasted for 14 months. There is, however, a simple way to reduce the chance of disputes, as well as reduce their duration and cost: proper, consistent organization of plans and progress.
What Causes Construction Disputes?
To understand how documentation can reduce or eliminate the massive financial drain caused by disputes, you need to know what’s behind them. Take a look at the top three causes of construction disputes identified in the previously mentioned Arcadis report:
- Failure to properly administer the contract
- Poorly drafted or incomplete and unsubstantiated claims
- Failure to understand and/or comply with contractual obligations
The root of all these issues typically stems from misinformation, poor communication, and unclear expectations. To provide real world context, take the 2013 example from our hometown, Seattle, in which a pipe caused the word’s largest boring machine to breakdown, resulting in a two year delay and a cost of over $100 million.
The dispute has yet to be resolved and continues to rack up massive legal bills in addition to the monetary damages from the breakdown. At first, the central issue was determining if an eight-inch steel well-casing within the work zone adequately identified in the contract. It took well over a year to decide that the well-casing was clearly identified, but the contract documents did not clearly identify that the casing was made of steel, so the contractor encountered differing site conditions. Now lawyers are still debating whether the company that made the boring machine is at fault because the pipe shouldn’t have caused a breakdown, or if the contractors pushed the machine too hard.
How can documentation ease disputes?
How would organization and documentation solve the Bertha problem? The issue stems from siloed information and disparate documentation. Construction documents are spread amongst different systems in different companies, and data often gets lost in transition or not updated when revisions are made. This makes it difficult to not only ensure crews are working off the most current information, but even more challenging to know who was working with what information at the time a mistake occurs.
In the case of Bertha, if the teams were working off a single set of digital documents, there wouldn’t need to be a debate about whether something was marked. Additionally, by requiring photo documentation of work in progress and work completed, you’d be able to easily see if that pipe was mistakenly left in place and who is responsible. However, the ultimate goal of improved and accessible documentation is not to effectively assign blame, it’s to make project data more available to everyone so they can catch these issues before a catastrophe happens.
The Big Bertha drill
How can you improve project documentation?
Technology is the key to improving project documentation – construction needs a single software system that houses all project information for all stakeholders, and organizes it in a way that it is easy for people to capture, retrieve, and understand. But, this isn’t enough, the industry also needs to create a culture that engages with technology and understands the importance of documentation.
The technology is progressing rapidly, but without the push to encourage and educate construction teams on how to use it, it won’t make a difference. Fortunately, the incentive and the data are there. In the UK alone, the average construction dispute was $34 million and lasted 12 months, compared to $21 million and 15 months in the United States.
The financial incentive is clear, but now the knowledge and motivation need to follow. Check out the Unearth Labs blog for more information on construction and technology, and how documentation can improve project outcomes.
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