Reporting and record-keeping play crucial roles in project management and are also of critical importance to managing and avoiding disputes on any construction project.

Over 20 years of experience dealing with disputes has reinforced the lesson that best practices in reporting and recording progress and events at every stage of a project are essential if such conflicts are to be resolved effectively or avoided in the first place.

Different companies will have different internal processes and procedures for reporting and record-keeping, but some aspects are common to any well-run organisation or project.

Communication channels

First, the project team needs to establish clear communication channels. This includes a clear internal reporting structure within the project team itself as well as the external reporting structure with subcontractors and suppliers, the employer, and other stakeholders. At each level of these reporting structures, the key contact person and contact point must be explicitly defined to streamline communication.

Quality of reporting

While progress reporting is a requirement under almost all construction contracts, I urge a project team to focus on the quality of that reporting. This should involve specifying the proper format and content of various progress reports, as well as the procedures and criteria for updating progress data. This is necessary to ensure accurate information, with all reasonable details captured in these reports. 

Taking monthly progress reports as an example – an updated programme is usually included as part of this monthly routine. The value of this progress information and its forecast for completion is dependent on the quality of the initial baseline programme, the accuracy of the progress data recorded, and the way the programme is updated. Quite often, to avoid showing delays, the durations and logic links to some critical activities are modified or compressed. As a result, such updates will not reflect the true state of progress.

Good recording keeping

Most will have heard the phrase “no records, no claim”. While this may not always be true, this mantra does bear repeating as it highlights the importance of good record-keeping.

There are variations between forms of contract in the records and processes they require. Therefore, it is extremely important that, from the outset, the project team understands the various types of records that need to be kept so as to provide the basis for applications for payment, progress measurement, valuations of variations, and preparation of claims.

Typical examples of records include daily logged site records, material delivery sheets, labour and plant returns, photographs, and videos, as well as requests for information, confirmations of instruction, transmittals, subcontract instructions, notifications of delay, notifications of claim, and contra charge notices.

All progress reports, correspondence, and minutes of meetings also form an essential part of a project’s records. Records of meetings merit a special mention. It is always good practice to prepare comprehensive minutes of meetings and get them signed by all parties. All too often, it happens, especially in a dispute, that the parties have conflicting views on what was said or agreed upon in relevant meetings.

Avoiding and managing disputes

As the value of reporting and record-keeping is obvious when it comes to disputes, it is worth bearing in mind the contribution that good practice also makes to dispute avoidance. Good communication channels and reporting structure, supported by good record-keeping, will enable the parties to understand the issues that can lead to conflict earlier and inform discussions about potential solutions. These will be based on a more objective and realistic view of the dispute’s cause, so it is more likely they will be able to avoid it escalating further.

It is a statutory requirement to keep records, though different countries and laws may have different requirements. In any case, good progress reporting and record-keeping will provide a party with sound contemporaneous information to substantiate its case. As the “no record, no claims” mantra reminds us, when a dispute arises, claims often fail due to a lack of substantiation.

Dealing with setbacks

A typical scenario is that a project starts to delay or faces other setbacks. What strategies can companies follow to best manage their position in this situation?

First, at the outset of any project, the project team should establish and maintain a risk register and then update it regularly through the programme. After identifying the potential risks in the different areas and disciplines of the project, the register should also specify the risk owner and corresponding measures to deal with such risks so that the contractor is prepared for each eventuality.

When a project runs into delay and faces being set back, the project organisations, both the employer and the contractor should diagnose the most likely causes and confirm that the previously identified mitigation measures are appropriate. In most construction contracts, the contractor has the obligation to mitigate the delay, no matter who caused it in the first place. 

Where the contractor has caused the problem, the contractor not only has to find ways to mitigate the delays but also implement any measures that require additional resources and bear the financial implications. 

Where the employer or a third party causes the delay, the contractor must not only meet its obligation to mitigate but also ensure it has a clear understanding of the remedies available under the contract – such as an extension of time, compensation of additional costs or cost plus profit. Knowing the relevant contractual remedies and procedures, the contractor can follow a clear road map to reserve and claim its rights. This will involve submitting notice as per the notice provisions and providing particulars with supporting evidence.  

Having a clear road map/diagram to illustrate the various steps and timeframes when dealing with variations and claims is always good practice. 

Effective project administration

All the best practices outlined above require effective project administration and the collaboration of functional departments. For instance, a design change required by the employer or a prolonged design review and approval process will likely delay the completion of the design, thus impacting procurement activities or construction on site.

In this scenario, the design/engineering team will first need to flag this, and a notice of delay would most likely be prepared jointly by the engineering and contract team. The engineering team will need to keep good records of all such design changes, revisions, reviews, and comments. This information will help the project planning team review and assess the potential time impact and, in turn, the cost control/finance team evaluate the cost implications.

About Baoqiang Zheng

Baoqiang Zheng (Bao) is a professional consultant with over 20 years of experience in construction dispute avoidance and dispute management. He has been involved in claims for major infrastructure schemes around the world and has acted as a delay expert.

Baoqiang specialises in project planning and forensic delay analysis. He has been directly involved in a variety of major international projects across Africa, Asia, Australia, Europe and the Middle East; regarding the preparation and defence of claims, disputes and arbitrations on behalf of contractors, subcontractors, clients and legal counsels.