Manage Risk on Your Public Works Projects: Leverage Inspector Daily Reports

More and more, we're noticing that public agencies are becoming increasingly risk-averse when it comes to managing their public works projects. To support them in that process, there are various risk management tools used during the construction phase which play an especially critical role in the overall organizational strategy. This includes staying current on documentation control systems. In particular, the Inspector Daily Report is a very important and helpful component in effectively mitigating risk, as long as what’s included in these reports is relevant.

I know that managers can easily leverage their Daily Reports when their inspectors commit to completing them. Not always a welcome task, but the good news is: an inspector’s observations do not need to be elaborate, but rather clear and concise. I frequently remind my inspectors that not everyone who reviews their reports will know every detail on the project, so give enough information that any new project manager can reference a plan sheet or project specifications and understand their observations. Ultimately, it comes down to understanding the report’s value, as well as the consequences of not using them.

I share the following story as a means to demonstrate just how valuable Daily Reports can be in saving time and money.

Early in my construction management career, I was on a project where the Contractor failed to protect existing improvements that were subsequently destroyed in a storm. While we had multiple pre-storm conversations about how to protect the facilities involved, very few of our onsite conversations were documented as a point of reference, other than what was recorded in our daily reports. Instead of relying on our long term memories to recall critical details, I was fortunate that my inspector had in fact captured those details, along with how responsibility was assigned in the field, in his Daily Reports, which helped to avoid costly repercussions.

This scenario segues into the Inspector Daily Report breakdown below. Continue reading to learn about the benefits as well as the components involved in creating them yourself. 

Benefits of an Effective Inspection Report

1. Timely identification of field issues: Prompt identification allows for swift action and effective resolution by the entire team.  A Contractor is much more likely to help resolve a rebar congestion issue before they have multiple mats tied and in place, as opposed to  uninstalling something that is already completed.
2.  Improved Communication: Reporting facilitates clear communication between parties.  I like to have my reports downloaded and reviewed weekly, so that nothing is missed from a field or a documentation standpoint.  An electronic tool facilitates this efficiently, as does a scanned or hard copy of a report, which can easily be distributed to team members on a regular basis. 
3. Documentation of Compliance/Noncompliance: The daily report is a detailed record of compliance with contract documents; recording noncompliance for immediate remedy.
4. Records for legal protection: As in the aforementioned example, reports are most often the best historical record; a pivotal component in protecting the agency’s interest in the event of disputes and claims.

Components of an Effective Inspection Report

Generally, reports should include daily activities and observations that help us understand project progress and compliance. However, daily reports are an item rarely reviewed until there is an issue and/or if information is lacking after the fact. I should note here that it  is extremely difficult [albeit nearly impossible] to recover ground IF there are elements that are simply incomplete.

Some specific, often overlooked items that help mitigate overall project risk include:

• Labor, Equipment, and Materials Specifics:  Even if an inspector is not onsite full-time to capture continuous details, it is important to use the site visit as a snapshot in time and get specifics on the onsite labor (names, classifications, number), equipment (type, size, idle/in use), and materials delivered to the site. Even if this information isn’t used to continuously track costs or bid items, managers can use this information later for review in disputes and spot comparisons on information that the Contractor might provide. For a less experienced inspector or engineer, this is an easy way to capture potentially helpful information, given that notes based purely on observation could be inaccurate.
•  Bid Items or Specific Measurement for Payment: While some inspectors include the general work being performed by activity, I ask my inspectors to note work that has been performed on specific bid items, to help me efficiently review monthly pay requests.  This not only requires the inspector to review the contract, to refer to how items are paid, but also (once again) provides critical information for disputes that may not be known at the time of the observation. 
• Site Visitors and Decisions Made: An often overlooked detail in reporting is referencing not only "who "was onsite, but "what" they: looked at, commented on, and if applicable, what decisions were made. For example, it is less effective to note “City project manager onsite at 8 am to look at cat tracking for striping”, than it is to note “City project manager onsite at 8 AM to look at cat tracking for striping at Main Street, and approved from station 1+00 to 2+00”. 
• Quality Control/Non-Compliance: Clearly any rejected materials, or non-compliance issue, should be noted. I ask that my inspectors not only keep a running punchlist (separate from their reports), but also that they cross-reference that punchlist with a date of when it was added. This alone helps reference the report where the non-compliant item of work was noticed and brought to the attention of the Contractor. Then, as the project progresses, management can stay on top of items and not let them get buried and forgotten.

On public works projects, managing risk is not only prudent but necessary. And, because Construction Managers shoulder the bulk of responsibility from project to project, having access to accurate Daily Reports is an indispensable risk management tool in identifying: potential risks, assessing the effect of project scope, cost, and schedule variances, and the development and implementation of measures to minimize both known and unknown impacts. 

Finally, making certain to communicate the “why” and the “what” can empower your inspectors to be  key players in supporting the owner agency as they navigate risks to  ensure successful project outcomes.