The use of cloud-based and SaaS project management platforms in the surety’s investigation, monitoring, and completion of bonded projects has increased significantly over the last ten years.
It wasn’t long ago that submittals and shop drawings required that seven or more hard copies be prepared, circulated, and returned in hard copy format. Today, construction management firms, general contractors, subcontractors, project owners, and AEC firms rely on cloud-based technology and Software as a Service (SaaS) platforms for the paperless transmittal and storage of project documents. Digital versions of plans and specifications, submittals, shop drawings, and record drawings, as well as the preparation and tracking of daily reports, change order requests, meeting minutes and more are now are the norm.
There’s little doubt that these platforms, which include Submittal Exchange, Projectmates, and e-Builder, have made a lasting impact on how the business of construction is done. The general consensus is that, when used properly, these innovations are valuable in providing a comprehensive record for continuous access by all project stakeholders.
What does this technology mean for sureties? How does this innovation help the investigation, monitoring, and completion of bonded projects? Here, we examine the role of cloud-based and SaaS project management platforms in the work of surety claim professionals.
Ease of Access Can Expedite Project Review and Completion
Before the advent of these innovations, a surety’s books and records investigation was likely to require the creation of a “war room” in the principal’s office. A copy machine or reprographic vendor would be commandeered to duplicate reams of the project files needed for the surety’s investigation of the project(s) and completion of the bonded obligations.
Today, a principal or obligee can create login credentials for the surety or its consultant in its project management software. With this “key to the kingdom,” the surety can immediately access and begin to review the (hopefully) robust project record.
In addition to expediting the surety’s books and records review, having the data electronically can smooth the transition of a project to a completion contractor or assist the surety itself in monitoring the project to completion:
- If the surety is bidding the project out to a completion contractor, the surety can easily disseminate the status of project records (submittals, etc.) to the bidders. The bidders can then inspect the project records before completing a proposal and signing a completion contract or tender agreement.
- If the surety is monitoring its principal’s progress on a project, the surety or its consultant can be granted access to the project management portal in order to “keep a finger on the pulse” of the project in real-time.
- Some software platforms allow “read-only” access, which may serve to quell any concerns that a project Owner or Architect might have about giving a third-party real-time access to the project record.
There is, of course, a word of caution. As we all know, any technology is only as good as the data provided. In the case of the investigation or completion of a distressed project, it is not uncommon to discover that a powerful project management software has been underutilized by an overworked project team. For example, the software may have great tools for the management of change orders and project costs. If, however, the incoming change order proposals from subcontractors piled up in the Project Manager’s inbox and have not been entered into the software, the reporting will not be up to date or accurate. For this reason, while access can be a useful tool, it is just one of many factors in the success of the surety’s investigation and books and records review of the bonded project.
The Role of the Completing Surety in Ensuring the Continuous Availability of a Project Management Platform
As part of the surety’s books and records investigation, the surety should inquire which software platforms for which the principal pays the subscription fees. In the event of a default or termination of its principal, sureties should take care to maintain the continuity of project management platforms that are or were the responsibility of their principal.
While it is expected that the principal pay subscription fees for its own project management tools (i.e. Procore), the specifications of certain projects may require the surety or its contractor to procure the account for the project documents portal. Ultimately, it is in the surety’s best interest to ensure that payments to the platform vendors are current, and perhaps, even consider making interim payments to bring them up to date, as the cost of interruption in access to the data or, worse, loss of the data could prove to be much costlier.
There is an alternative. Many cloud-based platforms allow for the download of a project archive, which provides a complete copy of the project record as of the time the archive is prepared. Downloading the archive, if available, should be considered a best practice for the investigating or monitoring surety to preserve a copy of the project record. This action can then eliminate the need for the surety to concern itself with the monthly subscription dues by another party.
The COVID-19 Pandemic and Project Management Software
For sureties, governmental and companywide travel restrictions will likely continue to hinder their ability to travel to project sites and principal’s offices to conduct investigations. Where bonded projects have complete records available through cloud-based platforms, sureties and their consultants may be able to conduct parts of project investigations remotely. Ultimately, this technology will play an important role in assisting sureties in conducting investigations of their bonded projects and fulfilling the obligations of their bonds during the pandemic and likely for the long-term.
Division Manager, Surety Claims Consulting
The Vertex Companies, Inc.