Project Management Advice
Managing projects requires more than simply dealing with “paperwork”. Managing a project requires close monitoring of time, cost and quality as well as timely dispute resolution when necessary. Our directors have many years of experience successfully managing each of these major aspects of projects and have personally developed numerous electronic systems to assist. They can also develop software tools for you and your team to help manage these elements of your projects or can tailor an existing system to suit your needs. Efficiency and effectiveness are keys to successful project management.
Document management is critical to good management as construction contracts typically involve thousands of documents e.g. design documents, variation claims, EOT claims, directions, payment claims, defective work notices etc. Time is always short on projects and easy retrieval of key documents and key details of a project is a necessity. We use NetDocuments as our document management system because we are able to adapt it to suit our business and we can help you to do the same. It can be used on any type of project in any type of business that deals with documents including those in the building and construction industry. Whilst NetDocuments is used in the legal, financial and government sectors, it is very adaptable for the construction sector as well. Good document management is not unique to a particular industry – it simply requires a good structure and software that is flexible to allow modification for a particular industry and a particular business. The easier it is to be adapted by the business using it, the better it is and the more likely it will be used effectively. Having to engage a software provider to make changes to the way in which the system is used will add cost and the business is unlikely to make those changes.
Our focus is always on helping clients to set up a system that works for them and aligns with the systems and processes they already have in place within their teams as they are more likely to use something that works alongside what they are used to doing and how they are used to operating.
Email management is incredibly important given that emails are the main form of communication in the construction industry and many other industries. Many contract notifications are sent and received via email and must, therefore, be kept in a way in which those documents can be identified and accessed if/when an issue arises under the contract and a party wishes to enforce its rights. However, given how many emails are sent and received every day for a particular project, and how many project staff typically are involved on a daily basis, it is important to use an email management system that allows for easy identification of key emails as well as easy filing of all emails and for those emails to be separated for each project.
Many systems are used as a ‘dumping’ ground for all emails, however, if the need arises on a particular project for certain emails to be located, it is nearly impossible to do so even with the more advanced search tools available today in many email systems like Microsoft Outlook. When emails are filed at a single level i.e. not in folders or another hierarchical manner, the user is dependent entirely on knowing how every staff member thinks, what they have noted in the subject line of the email, what words they have used in the body of the email itself etc in order to know what search words to use to locate relevant emails. That is extremely hard to do and often leads to key emails being missed.
We use NetDocuments for our email management system as it links seamlessly with Microsoft Outlook and is easy to adapt for our project management clients and our legal clients. However, there are many construction management systems that include email management and as long as those systems are set up to help manage the project (rather than just a single layer dumping ground), they will prove invaluable if there are any disputes or delays on a project.
Our directors have a lot of experience with many of the construction management software packages that are available and can help you to set up a structure for your business. If you are expecting to be required to operate a Statutory Trust project (under chapter 2, Building Industry Fairness (Security of Payment) Act 2017), you must have a very good email management system in place as many Trust Records will be sent and received via email and serious penalties apply if you do not keep all Trust Records and those Trust Records will need to be identified and collated on a daily basis to avoid significant time and cost if/when the Statutory Trust is audited by the Queensland Building and Construction Commission and/or your independent company auditor as required by legislation.
Managing and keeping track of your contracts and subcontracts is critical to minimising costly delays and disputes on your projects. However, these days, there are many documents to keep track of as ensuring that agreements are documented in writing is crucial to ensuring clear understanding of what is required and minimising your exposure to risk. It is also a requirement of legislation in some instances e.g. all subcontracts for building work must be in writing, all head contracts for building work must be in writing if the value of the building work is more than $3,300 including GST. In order to minimise risk in relation to progress payments under chapter 3 of the Building Industry Fairness (Security of Payment) Act 2017, it is also strongly advisable to have some key matters in writing prior to commencing any work under the contract for all values of construction work or related goods and services.
All of this requires a good management system to monitor and track contracts. It is important, though, that any such system be aligned to your particular business and how you and your team do your job. If not, it is likely to add time and cost as well as frustration and will, therefore, be unlikely to be used properly and effectively by you and your team.
Variations are not a necessity but are very much a common event on construction projects – more so since the industry has moved away from fully designing and documenting projects before tendering for the construction phase of the project. As a result, variations to the contract documents has become an accepted ‘norm’ unfortunately. Accordingly, it is extremely important that construction businesses, builders/subcontractors/consultants, have a good system in place to manage variations to the project. A ‘variation’ is any change to a contract document no matter how small and no matter how much, if anything, will be charged to make that change. Even if the contractor/consultant agrees to make the change without additional charge to the client, it is still a variation to the contract that must be documented in writing. It is not unusual for the parties to have an argument over a change made to the contract documents that was not charged for but is, nonetheless, a change to the original agreement. In the domestic building sector in Queensland, that can lead to offences under Schedule 1B of the Queensland Building and Construction Commission Act 1991 with fines and demerit points. In some states of Australia, it can also lead to no entitlement to be paid if the variation is not documented properly and in accordance with applicable legislation.
Our directors have spent a lot of their careers managing contracts that involved a large number of variations so have developed tools to assist in managing the variation process from start to finish. We can adapt those tools to suit you and your business and teach you how to use them so that you minimise your risk of dispute and non-payment for variations.
Extension of Time Management
Despite the very best of intentions and effort prior to starting a project, it is inevitable that a delay of some sort will occur to a project. A lot of the risk for the program for a project rests on the contractor and has for hundreds of years. However, COVID-19 has shown that many contractors were not aware that risk of program rested on their shoulders. As such, many have suffered as a result of the delays that have been, and still are to an extent, suffered by the industry due to COVID-19. Many are still suffering as a result of delays to supplies and labour as a result of the federal government’s HomeBuilder Grant and insurance repair work in some parts of the country.
This past year has shown how important it is to manage the construction program which also requires good management of any delays and extension of time claims made under the contract. Our directors have been involved in many delay disputes and have developed tools to assist contractors and clients to manage notices of delays and extension of time claims to minimise disputes between the parties and to promote a collaborative approach to managing delays that technically are outside of either party’s control (although it may be within the party’s legal control). We can adapt those tools to suit you and your business and teach you how to use them so that you minimise your risk of dispute and exposure to liquidated damages for late completion.
Claim management has become a hot topic for the building and construction industry. Whilst technically it relates to management of all types of contractual claims, it is most often considered to be management of payment claims. Payment is obviously one of the most important aspects of good contract management. However, security of payment legislation, in particular, has made payment claim management even more important as it has become incredibly technical – so technical that some lawyers get confused by what, exactly, is required for each particular jurisdiction as each State of Australia has a different security of payment regime.
The keys to good claim management, though, are:
- well written contracts that reflect the way in which the project is being done on site;
- clear understanding of key dates and timeframes from the contract and/or the legislation;
- good management of claims (not just invoices);
- good document and email management; and
- good calendar management.
Unfortunately, it is no longer possible to have a disconnect between the site team and the accounting team as many site personnel can inadvertently send a payment claim and/or respond to a payment claim without conscious thought of doing so under legislation.
Our director, Tracey, is a registered adjudicator in Queensland and has spent the past 5 years heavily involved with government and the regulator in amending the security of payment legislation in Queensland. Tracey knows and understand the legislation intimately and has a passion for helping clients to manage the requirements of the legislation as easily as possible without interfering with what is ‘best for project’. ‘Best for project’ used to be the motto for the building and construction industry and, unfortunately, risk management has taken the industry away from what is ‘best for project’ to the detriment of the projects and all teams involved in the projects.
As a result, we have a real focus on developing tools and checklists to assist clients to comply with the legislation without having to intimately understand it and also to create contracts that align with how work will be carried out on site whilst minimising disputes and non-compliances with the various legislative requirements that apply to the industry today.
Wood L&M Solutions can provide contract administration services to your team whether you are a head contractor, subcontractor or superintendent. We have many software tools and systems that we can set up for your team to use to administer your contracts and/or manage your projects. Often it is quite easy to streamline contract administration processes such as managing variation claims, extension of time claims, delay cost claims, progress payment claims, program issues etc.
We would prefer to help you to learn how to manage your contracts better and more efficiently so that you minimise disputes and costs associated with chasing payments and/or getting legal advice.
Last updated: 30 December 2021