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Blog / Risk Mitigation
This is part of our Essential Strategies to Mastering Construction Risk Management, this section highlights how to effectively identify and mitigate risks in construction projects. Gain insights into safeguarding timelines, reducing liability, and controlling costs, ensuring smoother project execution.
Have you ever considered how to use your project archive data to improve risk management and client relationships? Your firm’s ability to quickly respond to questions and requests for information long after a project has been completed will prove invaluable.
In 2020, Newforma surveyed global AEC firms to identify the percentage of firms named in a legal dispute. Thirty-four percent of respondents said they had been named within the last twelve months, and 43% within the last 1–5 years. The bottom line is that claims and disputes in the design and construction industry are common.
The Arcadis Global 2021 Construction Disputes Report cites an increase in the 2020 global average value of a dispute as $54.26 million. This is significantly up from $30.7 million in 2019. The number of disputes has remained relatively the same, but the significant increase in dispute values is hurting the construction industry.
Having access to complete project archive data during the litigation investigation and discovery phases can cut the litigation process off at the pass an improve construction ROI. A complete project archive includes contractual documents, audit trails, and communication documenting key decisions. Most firms archive “formal” contractual project data such as submittal and RFI exchanges, and change orders. However, capturing “informal” data is also critical for risk mitigation.
Informal project data includes text messages, email, or comments made via collaboration tools (i.e. Microsoft TEAMS) and provides documentation of key decisions supporting formal contractual documents. It is in these exchanges that critical information is often shared. However, many firms do not have an established system for logging or maintaining records and audit trails for informal communication, creating a major hole in their construction risk management endeavors.
Responding quickly to a client inquiry or question with complete and accurate information is key to building trusted relationships.
It is not uncommon for clients to ask questions regarding specific decisions months or even years after the project has been completed. The AIA Guide, “Architects Handbook of Professional Practice” by Evan H. Shu , explains how valuable archived documents and records are to a project. “Archived documents and records can serve as resources to tell a project story. How were specific decisions made? What were the results of those decisions? Particularly important are any changes in direction for a project.” Evan Shu suggests that firms should not rely on office veterans to store project archive information in their heads. Firms with good archiving procedures and policies are well-positioned to respond to client current and future needs.
A Newforma customer from a leading engineering firm relayed his story in a recent webinar regarding building trusted client relationships…
On a major client project, the lead project manager for the client and the lead engineer from his firm left the project. In a subsequent meeting with the client team, an issue was raised regarding a missing backup generator. The design specs called for two generators to be installed but when the project was completed one was missing. The representative from his firm logged into his laptop during the meeting and ran a Newforma search on the project. He found the email from the client’s previous project manager documenting the client’s decision to eliminate the additional generator. His firm was able to immediately provide information to the client while still in the meeting. As a result, the issue was resolved and his firm was commended for the quick response.
With stiff competition for engineering services on projects, his engineering firm leverages best practices in construction risk management and information management to stay on top an
The AIA guide also suggests that “sound archiving policies and procedures offer practical benefits to all architecture firms. After project completion, knowing what records to keep, how long to keep them, and how to store them are important practice considerations for all architecture firms.”
The time to think about keeping good records is at the beginning of your active project. Your project archive data is only as good as the data maintained on active projects. Planning ahead on what data and communication needs to be archived prevents the “should have, would have, could have” situation that occurs when critical information is lost or not archived when the project is closed.
A good first step is to evaluate your firm’s current day-to-day project filing and record-keeping practices. Newforma customers can file email and email attachments directly to the project. Valuable information will not get lost in an individual’s inbox, ensuring optimal construction risk management.
In addition, you may also want to develop an archive policy for informal communication. Not all informal communication needs to be saved. For example, a text from one staff member to another asking where to go for lunch is different from a text requesting an update to a critical document. As the amount of information communication increases, having policies in place to capture important conversations is key. Filing these conversations as part of the project record will provide more context as to how decisions were made.
Archiving critical project information and having a complete project record is a good starting point to any construction risk management strategy. However, without the ability to go back and find the information you need, the archive is just a pile of data. Therefore, technology is essential to search and analyze large amounts of data. However, firms relying on email search alone will miss information stored in the rest of the project record.
There is currently a lot of buzz in the industry around Big Data solutions. The business requirement for Big Data solutions is to analyze large amounts of both structured and unstructured data. Unstructured data is information that does not have a predefined data model. This includes images, PDFs, email, and several other types of files. It’s typically informal information.
Although we do not classify Newforma Project Center as a “Big Data” solution, it does contain the core elements of one. Newforma Project Center scans and indexes structured and unstructured data including drawings, images, PDFs and email. This enables Newforma search to go way beyond an email or Google search. As a result, firms can quickly search for keywords in both active and archived project records.
Having quick and easy access to a complete project archive provides your firm with multiple benefits. From measuring project performance, to mitigating risk, and building trusted relationships, paying attention to your archive will certainly pay off now and in the future.