By Joshua Levy
Regardless of the size of a construction project, there are some common themes that reappear time and again when disputes erupt between the parties involved in the project.
From preconstruction work to developing schedules and managing budgets, submittals and payments, many problems trace back to poor communication and recordkeeping. General contractors use project management software to collect, organize and circulate information in a timely and comprehensive way using mobile phone apps and web-based software. This starts as early as the invitation to bid stage. All of the crucial project information is available to the owner and subcontractors when reviewing scope, negotiating costs and evaluating the schedule.
The availability of accurate information minimizes the kind of confusion that often leads to disputes. For example, according to a recent industry survey, almost one third of contractors concede that they rarely receive payments from their clients in a timely fashion. This often leads to cash-flow issues that ultimately cause a range of operational problems.
As with many other challenges, delays in the billing cycle have a communications component. Project management software can help address this challenge by freeing up the flow of information and introducing greater transparency and efficiency.
Using project management software enables parties to review the contract documents, including drawings, project manuals, surveys, soil reports and planned sequence of work from a single location as opposed to separately maintained files. As the project proceeds, submittals, requests for information, meeting minutes and pending change orders or other modifications are stored in one place so the owner, architect and subcontractors are able to share information quickly. As access is permitted for the parties, each can upload the documents they must submit to keep the shared file current. No one will be able to claim they did not receive an update. This leads to faster problem solving and more timely approvals.
The project’s portal can also include customized tools to help everyone perform project obligations. For instance, the AIA A133 agreement between an owner and construction manager includes common reporting obligations. The agreement requires the general contractor to schedule and conduct regular meetings to discuss progress and the adjustments to the project schedule. The contractor is also required to record the progress of the work and submit a monthly report to the owner showing percentages of completion, pending project issues and a forecast of the approaching activities. The software can be set up so this information is compiled seamlessly and verified easily by viewing tabs on a project dashboard. All of the narrative descriptions can be enhanced with progress photos and video.
The agreement also requires the general contractor to keep a daily log containing a record of the weather, portions of the work in progress, inspections, safety or other incidents and other information required by the owner. Then, if any situation arises that could lead to a project challenge, the facts and records are easy to review. In this way all parties can leverage the software to ensure they are complying with the agreement’s requirements for documentation and a timely response to any project issues.
The general contractor can also create settings to manage cost information accessible only to the owner and general contractor. With many projects being performed on a cost-plus-fee basis, the owner and general contractor can link project accounting software data to the portal so all field and financial information is available in one location. This helps everyone validate monthly progress payments with current percentages of completion, evidence of purchased materials and status of pending and approved change orders.
As the payment process flows down to subcontractors, the crucial collection of lien waivers and other administrative requirements are readily apparent before payments are released. This helps everyone remain “breach-less” for a contractually compliant project performance.
As more sophisticated risk-sharing agreements between project owners and contractors come into play, having accurate, real-time data is a crucial step forward to ensuring that projects move toward completion on schedule and on budget. Project management software is indispensable in this regard, and as both owners’ and contractors’ experience with the software increases, we should see over time better rates of efficiency on projects — and, hopefully, fewer disputes.