Once you have determined the type of delay and the method to be used to analyze and quantify the delay, it is important to understand the type of documents/evidence needed to support your claim for delay.
If a party determines that they are entitled to some type of recovery for the delay, the party making a claim for delay, such as a contractor, must have the proper documentation/evidence to assist in proving entitlement for damages from the delay. Without the proper back-up, contractors are generally unable to recover all of the additional costs and expenses associated with the delays or, at best, recover only an “equitable” amount. Generally, damages must be proved with reasonable certainty and may not be based on speculation or conjecture. Thus, it is crucial for a party asserting a delay to have the proper documentation to support a delay claim, if the goal is to recover the damages associated with the delay.
Courts routinely uphold an owner’s decision to demand sufficient backup documentation and other evidence to support a claim for payment, prior to submitting the claim to an owner. See generally In re Central States Mechanical, Inc., Case No. 09-12542, 2011 WL 1637991 (Bankr. D. Kan. Apr. 29, 2011) (collecting cases); Systemaire, Inc. v. St. Charles County, 432 S.W.3d 783 (Mo. App. 2014) (finding a genuine issue of material fact as to what documents were required under the construction documents prior to payment).
In general, the best backup documentation is that which is contemporaneous and continuous. If able to do so, parties should use the actual project records illustrating all modifications, delays, and related costs from the course of the project.
The best documentation will include items that are contemporaneous with the delay event(s). Not every project will have the same documentation, as every project is different. To assist in proving a delay claim and related damages, some key documents may include:
- delay logs;
- delay notices;
- payroll records;
- time and material reports;
- diaries and witness statements;
- quality control and inspection reports;
- payment requisitions;
- dated progress photos and drone videos;
- daily, weekly, and monthly progress reports created at the time of the delay rather than those that may have been created after the fact;
- project meeting minutes that were distributed to various parties as opposed to draft meeting minutes in a word processing software; subcontractor records of the delay;
- project schedules and any schedule updates;
- requests for information (RFIs);
- change orders and change order requests;
- construction change directives (CCDs);
- correspondence, such as letters, emails, and texts, between the project team;
- invoices and receipts for costs incurred due to delays; and
- any other documentation helping to establish the delay.
Maintaining documentation, including schedules, RFIs, notices, change orders, meeting minutes, progress reports, photos, emails, text messages, and other correspondence as well as all responses made or received is important to show the continuous communication between parties, despite the fact that this task can seem unmanageable. It is also a good idea to save these documents/records upon receipt in a manageable system so that you can focus on the Project while preserving your rights to any delay claims at a later date.
If you are experiencing a delay, it is good practice to place those responsible, such as an owner, on notice of delays. Be clear and direct in your documentation and communicate with the other parties immediately if you believe there is evidence of delays. It is also a good idea to submit all change orders for review and approval before proceeding with any changes or additional work that might cause delays.
The lack of documentation may not necessarily bar a delay claim. However, depending on the jurisdiction, written modification provisions may be waived orally or by course of dealing. For example, some courts have held that, even if a subcontract requires that all change orders be authorized in writing, the requirement can be waived: “Habitual acceptance of work done on oral change orders in connection with a contract, and payment therefore, results in waiver of a contract clause providing that all orders must be signed.” Brockman v. Soltysiak, 49 S.W.3d 740, 745 (Mo. App. 2001); see also Missouri Dept. of Transp v. SAFECO Ins. Co., 97 S.W.3d 21, 36-37 (Mo. App. 2002) (subcontractor presented sufficient evidence that the general contractor had requested and agreed to extra work and that the subcontractor had performed it, thereby waiving the requirement in the subcontract that all change orders be approved by the contractor in writing).
Because construction project delays are common, project participants such as owners, sureties, and contractors will eventually be faced with some type of delay on a construction project. Thus, it is important to understand the different types of delay, whether it is compensable, and what information and project documentation is required to assist in proving entitlement to recovery for damages due to delays. It is very important to document the file and keep contemporaneous records of any potential delays so that when/if the time comes, you will have the required documentation to establish entitlement to damages.