Although the rules regarding discovery vary between hearing venues, key documents and documents relied upon by the parties and their experts are almost always requested and exchanged. In disputes involving schedule delays and damages, an obvious and necessary document request would be for the project schedules and job cost report. For cases involving use of an expert, engaging your expert early in the dispute process can allow for valuable input into the specific documents required for the engagement. There are simple clarifications that can be added to the document requests, whether in a formal dispute or informal exchange of information, which can save you and your experts valuable time and effort through efficient review and analysis and avoiding unnecessary additional work and discovery disputes.
March 22, 2021 Construction Law 101
Document Requests to Help You and Your Experts in Schedule Delay and Damages Disputes
A schedule is a general term for a tool that plans, monitors, and forecasts when work is performed for timely completion of a project. A schedule can be a simple high-level bar chart (also referred to as a Gantt chart) reflecting a few activities and milestones, or can be as detailed as an hour-by-hour plan for a discrete scope of work. It is not uncommon for contractors to utilize multiple schedules on a project.
There is typically one schedule that the parties utilize throughout the duration of the project to plan and execute the entire scope of work, which is often the relevant schedule for use in a forensic delay analysis. This is often a schedule based on the critical path method ("CPM") scheduling technique, which is a widely accepted technique used to analyze the sequence of activities that has the least amount of schedule flexibility, called float. Today, CPM schedules are typically prepared using specialized software, such as Oracle's Primavera P6 or Microsoft Project. These schedules contain scheduling data such as activities, dates, durations, float, and other information, but also can contain more advanced data such as resource loading, cost loading, and activity codes. Depending on the size and scope of the project, a CPM schedule may contain a few hundred to tens of thousands of activities.
When requesting the schedules used on the project, there are several items to consider adding to the request which could save you and your experts time, such as specifying which schedules are being requested, in what format the schedules should be provided, and what associated documentation is being requested.
The document request is often made for "all schedules" used on the project. However, further requesting the party to delineate between the baseline schedule and schedule updates can be beneficial to the expert and counsel. A baseline schedule is a fixed project schedule for which project performance is measured against and is typically prepared prior to or early on commencement of work on a project. Many contracts specify this schedule either as an attachment to the contract itself or to be submitted and approved a certain number of days following contract execution. The baseline schedule is typically updated, often on a monthly basis, and progress and key milestones are then compared back to the dates specified in the baseline. Most schedule delay analyses are based on comparing an "as-planned" schedule to actual or forecasted progress of a later schedule. However, disputes can arise regarding what was the appropriate "as-planned" schedule for which progress should be measured against. Therefore, having the parties identify the baseline, or other agreed upon schedule, can save counsel and experts time in determining what schedule to use for the "as-planned" and minimize the effort and cost of the experts to revise or perform other analysis for a different "as-planned" schedule used by other parties.
It is also beneficial to request both the native export version as well as the format in which the schedules were contemporaneously maintained or distributed among the parties during the project. Primavera schedules can be exported in the popular .xer file extension format (as well as others) and Microsoft Project uses an .mpp file extension. It is beneficial to first check with the expert regarding their software capabilities, as the expert may have a different version of the scheduling software than the project team, which impacts which version of the export files can be imported. Having a native export of the schedules is useful to the experts, allowing them to filter, organize, and analyze the data within the schedule quickly and efficiently. The native exports are also essential for an expert to perform certain forensic delay analyses, such as a time impact analysis ("TIA") or impacted as-planned analysis, which involve modification to contemporaneous schedules to understand how delaying events impact the project.
In many cases, not all stakeholders have access to specialized CPM scheduling software, and as such, schedules are contemporaneously transmitted as common PDF files, which normally do not display all the voluminous data contained within the scheduling software. It is valuable for the experts to receive these schedules to understand what information was transmitted to the parties. Many projects submit these schedules as part of a monthly progress report, with a corresponding narrative discussing progress, issues, delays, and the critical path, which is the longest sequence of interconnected activities necessary for completion of the project. The accompanying narrative in these monthly reports is beneficial for the expert to understand what issues were being discussed for a given month. Having a PDF and native export version of the same schedules also provides a check to ensure the native schedules used by the experts are the same as those contemporaneously used by the parties.
Job Cost Report
A job cost report is a general term used to refer to a report that tracks the costs of a project. Contractors may use their own proprietary software or external third-party software to manage costs to maintain their job cost reports across their portfolio of projects. Job cost reports can have numerous different fields to monitor, organize, and allocate costs into different categories. Fields typically include the type of cost (such as labor, material, subcontract, indirects, etc.), cost code (numeric system providing further breakdown of the types of costs), transaction date, description of cost, and amount, among other information.
When requesting a job cost report, there are several items to consider adding to the request which could save you and your expert time, such as the range of data requested, format for which the job cost report should be transmitted, and additional information requested to understand and utilize the job cost report.
The expert will typically want the entire job cost report for the project, not just a specific portion of the work. The job cost report should include all labor, material, equipment, subcontract, and indirect / general conditions costs the project incurred and all fields used to track these costs. Job cost reports can contain hundreds of thousands of individual line items, which makes review and analysis using a PDF format prohibitively cumbersome and time consuming. Given the voluminous amount of data, it is helpful for the expert to receive the complete job cost report in a Microsoft Excel or a similar spreadsheet / database format.
Job cost reports may use a numeric system for organizing and segregating costs into different categories, typically referred to as a code of accounts. To an expert unfamiliar with a party's cost accounting system, these codes are not useful on their own. Therefore, when requesting the job cost report, a request should also be made of the descriptions of the cost codes contained within the code of accounts so that these codes can be translated into useful categories for analysis.
In many cases, contractors include incorporate budget information into their job cost report, which allows for managing and tracking committed or actual costs against each cost code item. In these situations, the job cost report will typically contain an original budget, or the amount reflected in the contract, and an approved budget, which incorporates approved changes orders and budget transfers. Inclusion of these fields is the job cost report export helps the expert to quickly identify the largest areas of budget overruns for further investigation and analysis. The budgets reflected in the cost report are typically a summarized version of a more detailed estimate. It may also be beneficial to request this original detailed estimate along, to provide the expert with build-up and basis of the budgets used in the job cost report.
This discussion is a non-exhaustive summary of additional clarifications that can be made when requesting schedules and the job cost report as part of a document request. These clarifications can hopefully be helpful to you, your experts, and the opposing party to reduce time and effort in requesting and obtaining the correct schedule and cost information in its most useful form and avoid further requests and discovery disputes between the parties. As with any matter, these suggestions should be taken into consideration with the agreements between the parties, the procedural orders established, and the unique facts and circumstances of the project or matter.