Closing Out a Project - Bringing It Home

Matthew Stevens
July 7, 2008 — 1,017 views  

The close-out phase of the project is one the most important factors in determining how a project ends. Does it end with a strong finish and the owner is delighted at how quickly they received occupancy? Or did the last 10% of the job drag on forever and it seemed as though you would never finish? Customers remember most vividly the last 10% of the project. How you close-out a project will leave a lasting impression in the owner’s mind. Unfortunately, they won’t remember all the hoops you jumped through to get the job started in the dead of winter, but they will remember that it took three weeks longer than expected to patch the drywall or to broom rocks.

An effective project manager closes out a project by accomplishing the following tasks in a timely manner:

  • Completing the punch list process
  • Delivering all Operation & Maintenance manuals, as-builts, and warranties to the owner on the date of substantial completion
  • Training the owner / client on systems
  • Transferring utilities
  • Closing out the job files and consolidating all documents for future reference
  • Delivering accurate as-built drawings


Punch List

The field manager is primarily responsible for generating an internal punch list in order to minimize the amount of items that are on the final punch list. His internal punchlist should be started while construction is in full swing. This type of policing procedure should be going on throughout the life of the project by either phase, floor, area or room. Once an area or phase is approximately 80% complete the internal punch list should be created. These are items that are incomplete and should be addressed and when finished, inspected by the field manager.

A punch list focuses on the quality of the completed work and verifies that it meets contract and specification requirements. After this step, the architect/owner final punch list is created and completed within 30 days of substantial completion. You should accept only one punch list. Subsequent to the Certificate of Occupancy, the project manager is responsible to attend punch list meetings until such a time as the owner, architect (and your client agree) that the project is complete. If you and the field manager have done your job well, the final punch list should be short.

Only after all work is complete are any subcontractors finished with their work. That is, all requirements are met and all punch list work has been completed. The project manager is responsible for ensuring that all work is done before final payments are made.

Guidelines

  • Develop a close-out schedule 60 days in advance of substantial completion which outlines the receipt of all close-out documents. You will have more financial leverage at this point, than when the job is complete.
  • Include the close-out documentation required by division in your submittal schedule. Also include any special guarantees, service contracts and warranties, etc.
  • Tell any subcontractors and distributors exactly what to submit, don’t assume they know what is called for in their contract or purchase order.
  • Use the submittal log and meeting minutes to remind subs and vendors throughout the job of their close-out responsibilities. Reminding them late in the project means delays will occur.
  • Ensure that As-Built drawings are updated monthly to maintain an accurate set of record drawings
  • A contractor's average net profit before tax is less than 10% while common retention amounts are 10%. Money has some interest cost even if it is yours. If the close-out process gets delayed and you don’t collect your final billing and retainage per your projected cash flow budget, you have experienced profit erosion and have lost some or even all of your projected profit.


Matt Stevens is a management consultant who works only with construction contractors. He can be reached at [email protected] His firm, Stevens Construction Institute is located at stevensci.com

Matthew Stevens

Stevens Construction Institute Inc