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Record keeping in construction contracts - what does it mean and why is it important?

One of the most important 'best practice' processes we should all apply in construction contracts is to keep records as the project progresses. Doing so helps contractors and sub- contractors to maintain accurate and comprehensive records of what happened at any given point, offering clarity to manage projects more effectively, mitigate risks and - should it come to it - resolve disputes.

These records are known as 'contemporaneous records' which simply means that they are 'recorded' when the event occurs. In construction contracts, contemporaneous records include 'statused' programmes, daily logs, progress reports, meeting minutes, change orders, photographs, videos, and any other documentation that captures the construction process and events.

Recording events as they happen on the day is crucial because it is impossible to remember everything that happens as the project unfolds. Memories of an event can blur over the days, weeks or months, especially when we're working on multiple contracts at the same time. Hence why a site diary is one of the most important records that a construction contractor or sub-contractor can keep.

But a site diary and other contemporaneous records are much more than simply an aide- memoir. They can actually be key to a construction firm's profitability and long term success. The other thing to bear in mind, is that when we keep a diary it is rarely just for our benefit, a third party might need to refer to it so it needs to communicate to a reader not just a brief word to ourselves. So, it is important to take time to develop efficient processes for all staff to record what they do on a daily, weekly or monthly basis and any relevant events that occur in relation to the contract - that could include recording any feedback from the client, other contractors or suppliers.

The first step to take is to determine what records your contract demands that you keep. Is there a duty to provide certain records under the contract you've agreed to? Make sure you understand your obligations from day one and clarify any areas of uncertainty with the employer before you start work on the contract.

What type of records does a construction contract expect you to keep?

It is vital that you know which types of records you're expected to keep under the terms of the contract. You may have figured out that the contract expects you to keep records but do you know exactly what types of records you should keep? Emails, letters, formal reports, anything else?

It is important that you keep what matters and avoid wasting time on unnecessary record- keeping - that would simply harm how efficiently you and your team can deliver the contract. We say, try and design and implement systems which generate the records needed as a by- product of managing the work.

Keep the facts safe, stored and shareable

Knowledge is power. So, keep evidence and the facts safe, properly labelled, stored and shared for defence or attack. You never know when factual information about what happened during the contract may be required to support a claim that you wish to make or defend your position in the event of a dispute.

Ensure your records are factual and accurate

Accuracy is powerful. If your records are accurate they will have integrity and credibility. That could be the difference between winning or losing your case. For example, a time-stamp on a digital photo taken on your smartphone is far more credible than having to give an estimated time of an event verbally.

Remember too that contemporaneous construction records must not be altered or modified once they are created. If any changes or updates do need to be made for the purposes of clarity or to correct an error, these should be clearly documented and explained to maintain the integrity of the records.

Establish how best to record and communicate the facts

What's the most appropriate way of communicating and recording the facts? It may sound like a minor thing, but communicating facts relating to the contract in the wrong way can be a source of conflict and may undermine your case for claims.

Use record-keeping as a business improvement tool

Whilst record-keeping is crucially important in helping construction contractors and sub- contractors meet the terms of their contract, and have credible evidence to support themselves in the event of a dispute, there are other longer term benefits to the process which are often overlooked.

Firstly, they can help you identify areas for improvement. Spending time reviewing site diaries, for example, can reveal processes which could be improved to avoid the risk of delay and be more efficient, especially when it can be seem that a particular task is consistently taking longer than expected.

Record keeping can also help your business reduce costs. This is because it makes it easier to track labour and equipment usage, making the inefficient use of equipment, for example, easily identifiable.

Site diaries in particular can help to improve communication too. This is because they provide a clear document for any stakeholders involved in the construction project to stay up to date. Another key reason why daily updates are so important!

And finally, record keeping can contribute to increased client satisfaction and a contractor or sub-contractor's chances of securing future contracts. This is because well kept, comprehensive records help to track progress and identify potential problems early on, making it more likely that contracts can be delivered on time and within budget. An accurate as-built record aids procedures at the end and after completion too.

To find out more about record keeping in construction contracts and how to do this in the most efficient way possible, please contact us.