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Can signature on Daily reports be used as claim ?

22 replies [Last post]
Thu, 2005-06-09 07:36
Mary JoAnn
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In the Daily report our contractor is providing information about the number of people on site - craftwise & if direct / indirect. In addition, he is also providing info about manhours spent on daily basis.

Our campany rep initials on this report daily & a copy is give back to the contractor.

Our contracts manager is afraid that since we r signing on daily report (although obviously it is impossible to physically check the headcount & hrs spent) the contractor can comeback later & use it as a basis of any claim for idle time etc...

Any ideas ?
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Sat, 2005-06-25 13:06
#1
Andrew Flowerdew
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Mary,

Stuart is correct in that the daily reports in themselves will not give rise to a claim. The information contained in them however can (and most certainly will) be used to support a claim. The issue in the event of claim will then become, as Stuart points out, the interpretation of those records.

As often is the case, this may not happen until a long time after the event (month’s or even years) and possibly by someone who was not even on the project. If there is only one version of records available then disputing them becomes almost impossible - in 12 months time if the contractor raises a valid claim and says as per the records he had 20 men working on an activity for 10 days, who’s going to remember or be able to dispute it?

Therefore, if you are not going to keep any similar records yourselve’s I would advise at least spot checking on a regular basis and disputing the records if found to be inaccurate - just to let the contractor know you are looking at them. Hopefully then you can have some degree of confidence that the contractor is submitting accurate records.

In an ideal world keeping your own independant records would be best, but we don’t live in an ideal world and have to do the best we can.

To sign or not to sign for, as I said before, if no other records exist, it will make little difference. In the absense of other records being kept your efforts should be directed towards trying to ensure as best you can that the submitted records are as accurate as possible.
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Sat, 2005-06-25 10:25
#2
Stuart Ness
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Hi Rashid,

I think that your observations are very accurate, and not invalid to this discussion.

However, with regard the scenario whereby the Contractor only subsequently realises that he has incurred additional costs and a need to re-sequence his work activities as a result of numerous design changes, this may fall into the category of “Cumulative effect of Change Orders” and therefore may qualify as a head of claim in its own right. But that is a separate issue, I suggest, from the matter of Mary’s concern that the Contractor may launch a claim on the basis of Daily Reports that have been submitted to her Client Representative.

It is unlikely that the Contractor on Mary’s project could launch a successful claim simply on the basis of the Daily Reports alone. The Daily Reports may – to some degree – confirm the Contractor’s view as to the nature and extent of the manpower available on any one day; but it really does little more than that! In any event, since Mary’s project appears to include several thousand men, I would be surprised if the Contractor could not mitigate the effect of any delaying event, by reassigning his manpower on what must be a very large site.

Mary also asked as to whether signing off on the Daily Report as “Acknowledged by __________” represents a potential risk of a claim in the future. This is unlikely in itself to cause a claim to survive, but it may be used as support of the nature and extent of manpower available at any one time. If the Daily Reports were used later in this way, of course, Mary is equally free to use the same information provided by the Contractor and provide her own analysis as to the self-inflicted labour productivity levels of the Contractor and his failure to take mitigating steps!!

Finally, I take note of your comment with regard to the use of “Received by____”, and I fully appreciate the valid point you are making. However, by his signature on this basis, the recipient is only confirming that the information has been given to him and he is not confirming his agreement or disagreement with the data contained in the Report.
What he then does with that data at a later stage – if he chooses to do anything at all – is a separate matter (and probably the subject of a separate thread!! )

Hope this helps,

Stuart

www.rosmartin.com
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Sat, 2005-06-25 08:37
#3
Shahzad Munawar
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Hi Robinson

You are right in saying that signing of these reports does not meant that claims are being accepted by the Client or Consultant.

Yes these signed reports are the acknowledgement that may be used in claims of suspension Period, Idle period and extended overheads etc.
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Fri, 2005-06-24 08:06
#4
C Robinson
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Like Stuart said the delay should be recorded separately.
By signing this daily report, you are not accepting any claim, but you are acknowledging that that manpower and those resources were onsite on that particular day for those hours. If you do not know that to be true, you should not sign the report.

If you sign these reports or not, the contract would use them, as his records in a claim situation.
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Thu, 2005-06-23 13:14
#5
Andrew Flowerdew
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Mary,

Forgot to anwser your other question about transmittals and contract documents - there are 2 answers:

Prior to contract being made - a transmittal or other correspondence may be only what is called a representation ie something that is not intended to be incorporated into the final contract document and hence become legally binding.

After the contract is made - between the contracting parties any transmittal, correspondence or other will be taken into account if a dispute arises and therefore becomes a contractual document - (but not part of the actual contract document)
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Thu, 2005-06-23 13:02
#6
Andrew Flowerdew
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Mary,

Whether signed or not, they are likely to be used in any claim the contractor may see fit to make. If the records are the only ones that exist, ie the client is not keeping thier own, then as there is no other evidence to dispute these records, they will stand as the best (and possibly only) available evidence and be therefore be taken into account.

If you are not checking them or keeping other similar records how can you say they are not correct, now or at a later date? The answer is you can’t, therefore if they are the only records being kept it doesn’t matter whether they are signed or not - you are accepting them as correct by default by not checking or keeping other records. If anyone (third party or other) has to assess a claim after the event they can only make that assessment on what is put before them - if you’ve got nothing and the contractor has then they can only go on what the contractor has.

If there are other records then the situation if very different but from what you have said it doesn’t seem to be the case.
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Thu, 2005-06-23 12:10
#7
Rashid Iqbal
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Staurt,

Your postings were quite detailed and helped me a lot in clarifying some of my concepts. I thank you for that.

I would be expressing some of my views here which may not be really complementing to yours and so kindly take them in a good spirit.

In an ideal case, to claim something, the contractor has first to reserve his rights for doing so, then he has to ensure that supporting documentation which are necessary for the substantiation of claim are being maintained and are also being made available to the Client for his ‘random’ checking.

Though just visualize a different picture. The client is introducing numerous design changes and is clearly saying that the contractor would be paid for these changes. Now after a few months, the contractor figures it out that these ‘changes’ have resulted in changing the sequence of works which in turn resulted in stacking of trades and increased idle time. Observing this, the contractor, the contractor places his request for compensation. And you can well imagine now that in such a situation the contractor would not have reserved his right/documented the contemporary records.

If we look into the details of such construction disputes, we could see that the courts/boards have over and over again dug into the project records to see as to how the contractor was performing during the ‘impacted’ and ‘un-impacted’ state of the project. The famous examples of these cases would be Clarke Concrete Construction Co, Hensel Phelps and from these, one could see that the documents used to establish the productivity/efficiency of the contractor were the progress reports and his own cost accounts.

A few years back I also learnt the use of ‘Received By’ though now I think; the people who are doing it are lulled into a false sense of security. If they are receiving and not objecting it, this means that they are ‘accepting’ it.

My point is this that this ‘Received By’ would only work well if the client also randomly checks the integrity of these reports and issues some correspondence in this connection.

Rashid
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Thu, 2005-06-23 07:02
#8
Stuart Ness
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Mary,

I have found that much of the debate with regard to “ to sign or not to sign” falls along cultural lines. In many parts of the world, such as China and other parts of the Far East, a piece of paper is useless unless it has a ‘chop’ or the equivalent.
In Germany, some documents need the signatures of two people in order to make it ‘official’.

In your position, since a Daily Report is merely an administrative transmittal document, I see not specific need to have it signed for, unless such signature is specifically set out as a contractual requirement (which I doubt). To the extent that someone insists on a signature, this should perhaps be qualified by the words ‘For receipt only’ which confirms that the Daily Report has been received, and little else. That, I think, may be your best way out!! ;-)

A transmittal is usually just an administrative (sometimes cover) note which records the transfer of information from one party to another. It has no contractual significance other than to confirm that information was passed from one party to another at a given time and date.

A contractual document is usually identified as such in the Contract Agreement, and it will set out the rights and obligations of the Parties. In simple terms, a contractual document will tell you WHAT you have to do; a transmittal will confirm that you have DONE it!

I have also worked on major projects with thousands of men on site , and I would add a third reason to your list of difficulties in confirming numbers : - they all look the same!!

With regard to signing with the caveat, “Acknowledged by________________” this of itself is unlikely to instigate a claim, but as I have noted above, you may consider using the phrase “ Received by __________”

Hope this helps,

Stuart

www.rosmartin.com
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Wed, 2005-06-22 21:21
#9
Mary JoAnn
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Stuart,

All the feedback to this post has been extremely helpful & thought provoking. I am sure everybody, specially in construction Industry has faced the dilema (to sign or not to sign) sometime or other & so far, my view based on the feedback to this post, the PP forum is still divided on the course of action. Whats the best way out ?

A quick question. Daily / Weekly / Monthly reports are typically common submissions expected from the contractors in a contract document & such needs r usually very clearly worded in the contract. Whats the difference between a transmittal & contractual document ?

My concern is that we r talking about a site where you have 7-8000 workers from the contractor & its obviously difficult for the owner to count the number of people craftwise daily for 2 main reasons :
1 - usually such reports r submitted the next day.
2- The owner may not have enough resourses to do the physical head count daily.

Does signing on daily reports pose a potential claim risk in future - just because u have signed in a place titled "Acknowledged by______".

If it does then whats the way out ? Stop signing on the reports ??

Mary
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Wed, 2005-06-22 04:10
#10
Stuart Ness
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Philip,

I feel that this thread is unravelling to the point where even I am confused, (not an unknown state of mind for me, however), but for sure it cannot be helping Mary!.

For clarity’s sake, however, would you consider the Daily Report in question - which apparently sets out the nature and extent of site manpower – as a “Transmittal” or as a “Contractual” document.

I think this will help.

Stuart

www.rosmartin.com
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Tue, 2005-06-21 14:15
#11
Philip Jonker
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Hi Stuart,

The point is that signing rights must be allocated to the person responsible, so the route is that document control, signs the transmission and then passes it on to the correct person for approval. If the system is set up correctly this can be circumvented, by agreeing that certain people, ie the superintendents in charge of the disciplines can sign for their particular discipline, this is in the interested of getting diaries signed timeously.

However the problem lies in that anybody could get a signature on the basis of the document could be a transmittal, whereas in fact it could be a contractual document.
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Tue, 2005-06-21 08:04
#12
Jaco Stadler
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Hi Stuart
Well then we need to wait to the next one for payment.

Cheers
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Tue, 2005-06-21 08:00
#13
Stuart Ness
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Jaco,

Send me you claim for $1,000,000 and I will pay it to you……..just not in this lifetime! ;-)

Stuart

www.rosmartin.com
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Tue, 2005-06-21 05:51
#14
Jaco Stadler
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Well

Mary the simple solution to the problem to get accurate daily labour reports.

What you need a clocking system and for vehicles an vehicle access system. (These systems can be purchased) or you can hire a bean counter.

If you are concern about this being used as an document later for Men/Equipment count yes this will be used for this becasue it is the best record at the time. (Except if you have other better record).

As to a signature regarding this. With or without a signature it does not help you it stay’s the best record.

So if the contractor submit a claim and you agree to pay/not to pay him this claim normally these reports will be used as the best record to base the claim.

Assume the contractor Issue you a letter stating that he is Claiming $ 1 000 000.00 because of XYZ . And you sign the letter it does not mean that you are going to pay him unless you sign the letter stating that you have approved the claim. (Stuart if I am wrong Please say so)

Well my advice is get a system that can dispute the contractors Numbers or do spot Checks on the number.



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Tue, 2005-06-21 04:59
#15
Stuart Ness
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Philip,

I feel that you comment that “…if it is signed for it is accepted.” requires some clarification (which, after all, was the whole point of Mary’s original question).

Do you mean accepted by way of receipt, or acceptance of the contents, or acceptance of both receipt and contents? And I am unsure about your statement that the document controller (if there is one!) can sign without responsibility. Surely, his signature – at least – confirms that the document has been received, otherwise what is the point of his signature in the first place?

The point of my previous post to Mary was that I questioned as to whether or not a receipt was indeed necessary, since a Daily Report is a straightforward item of project administration, and can be (and often is) submitted by the Contractor via e-mail, thus requiring no signature for receipt or indeed for anything else.

Hope this helps,

Stuart

www.rosmartin.com
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Mon, 2005-06-20 14:49
#16
Philip Jonker
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The point is Mary,

What is your companies function on site, who is the intermediatories and the rest. Depends who can sign. In common law if somebody has accepted the daily reports, whether it be the site secratary or whoever, if it is signed for it is accepted.Thus it is good practice to restrict the people who can sign. There is one person, however, who can sign for anything without accepting responsibility, the document controller. So make sure if the responsible people is not available tgat the document controller takes receipt.
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Mon, 2005-06-20 10:38
#17
Stuart Ness
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Mary,

I am not sure that your Representative is required to initial or otherwise acknowledge the Daily Report other than to confirm its receipt.
The Daily Report will be part of the project’s administration paperwork, and it would be improper, I suggest, that your Representative’s signature can be assumed to be any form of confirmation of the information provided.

Any claim for idle or standing time caused by an excusable delay to the Contractor should be separately recorded and given to the Representative, and at that time, the opportunity should be given to the Representative to check the extent of idle time as recorded.
This exercise, however, is entirely separate from the hum-drum submission of a Daily Report, which only sets out the extent of manpower and machinery that turned up for work on any given day.

Hope this helps,

Stuart

www.rosmartin.com
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Sat, 2005-06-11 20:52
#18
Andrew Flowerdew
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Mary,

The client rep can sign for them but should add a disclaimer of some appropriate wording such that the records are not checked or accepted as fact - otherwise at a later date is is very possible that they will be used against you as an agreed record.
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Fri, 2005-06-10 10:09
#19
Rashid Iqbal
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Hi,

It is an offical correspondence which if not objected by Client or Engineer within 7days(ussally) of submission is considered as truthful.

It really does not matter as whether the Client or Engineer is signing them or not.

Regards
Rashid Iqbal
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Thu, 2005-06-09 15:18
#20
Philip Jonker
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Hi mary,

The answer is very pragmatic, no bull. If the contractor is trying to claim standing time, he has to line up the standing people outside your office and prove he has no other work available for them. In normal practise, it is the site manager’s problem, if he does this, it is up him to resolve the problem. Day to day problems, like this, must be taken into acocunt, however, they are not normally a planning problem unless they get out of hand
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Thu, 2005-06-09 09:13
#21
Jihad Daniel
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Dear Mary,

Of course, daily/weekly/monthly or any periodic reports transmitted from Contractor are considered as contractual documents. They need to be checked by the Engineer and if any remarks, to be immediately communicated in writing to the Contractor. These reports if detailed, are very essential substantiated records for the Contractor to use in a claim.
It is imperative that the Engineer/Consultant review these reports, sign (without reservation) and return back (with or without notes/remarks) these reports in a reasonable time to the Contractor.

Regards,
J. Daniel

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Thu, 2005-06-09 08:00
#22
Shahzad Munawar
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Yes, the Contractor usually use these signed copies of daily reports in idle period claim, suspension period claim and same others coz they need authentic proof from the Client to establish such claims and at any forum these signed reports cannot be denied.
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