Project Closeout Starts at the Beginning

If you are like me, toward the end of a project, you may lose a little focus when you start to see the light at the tunnel and start thinking about the next project or deadline. However, this is not the time to let up. If anything, we need to refocus and redouble our efforts, or that light will turn out to be a train. This month, as part of a look into the "Construction Alliance" and the "Construction Guidelines", we will explore what we can do to closeout the project with as much energy and focus with which you started. "Project Closeout", done correctly, will go smoothly and keep the Owner happy.

When does project closeout begin?

At the beginning of the project, of course! Don't wait until construction is beginning to wind down to start closing out the project. The GC should carefully read the requirements for Project Closeout and begin collecting the required documents as they come up during the progress of the Work. Documenting changes in the Record Documents as they occur, not only will it save time in the end, but your closeout documents will be more complete and correct than if you had waited until the end of construction.

What is project closeout?

Project closeout is typically initiated by the General Contractor (GC) when they believe the project is Substantially Complete. That is, the project is complete enough for the Owner to begin occupying the building for its intended use. The GC will follow the procedures outlined in the Project Manual and the Owner/Contractor Agreement, which would begin by the GC submitting to the Architect/Engineer (A/E) a list of items that will need to be corrected before the Agreement is considered final. The A/E will verify this "Punch List" of items during one of their two required "inspections" of the Work. There is an entire guideline devoted to Punch Lists, which will be covered later this year. If deemed acceptable, the A/E will issue a Certificate of Substantial Completion.

The Certificate of Substantial Completion begins the final phase of construction and kicks off the one-year construction correction period for all Work. Depending on the Owners requirements, the GC will begin pulling together the required final submittals. These submittals may include: 

• Certificate of Occupancy: This is official approval from the Authorities Having Jurisdiction that the Work has been completed in accordance with applicable laws and building codes and is ready for the Owner to use.
• Project Record Documents: These are the marked-up Contract Documents, written and drawn, indicating actual locations and items installed. There is an entire guideline devoted to this, which will also be covered next month.
• Operation and Maintenance Data: Typically a document informing the Owner of what is required to operate and maintain each operational component of the final building.
• Warranties: Any warranties specified more than the typical one-year construction warranty are completed in the Owner's name and turned over to them.
• Keys and keying schedule: The Contractor turns over all keys, and a schedule indicated which key goes to which door to the Owner.
• Spare parts and maintenance materials, or "attic stock": If specified, additional materials are turned over to the Owner for continued maintenance and repairs. Also required to be turned over are any special tools required for maintenance.
• Evidence of payment to Subcontractors and suppliers: Final waivers of lien are required from those paid as a part of the Work.
• Final lien waivers: Once final payment has been made, a final release of lien is required from the GC to the Owner, clearing them for complete ownership of the project. For information on partial lien waivers, see the September 2020 blog.
• Consent of Surety for final payment: If the Owner requires a performance and/or payment bond, the Contractor will need to get written consent from the surety that they approve of final payment.

What activities occur during project closeout?

The list may vary depending on the Owner, location, and building type. However, the following are some of the activities which are completed:

• System startup: In some instances, typically mechanical, electrical, and plumbing, complex systems will need to be started up prior to the following few steps.
• Demonstration and instruction: The Owners maintenance teams are instructed in the operation and maintenance of many of the facility's systems.
• Testing, Adjusting, and Balancing: When you hear these terms, you may think HVAC systems, but it may also include lighting, acoustics, water and several other complex items that need verification and adjusting.
• Maintenance service: If specified and requested by the Owner, the Contractor who installed the Work may be required, by specification, or hired to maintain installed Work, such as elevators or HVAC equipment.

What is the timeline?

Depending on the project's size and scope, the Contract will identify the amount of time allowed to complete project closeout. It is in the best interest of all parties, Owner, A/E, and GC, to get this process completed as soon as practical.

Once all of the required closeout procedures are complete, the A/E will perform their final inspection of the Work to verify all punch list items are complete and that there is no original contract work left to be completed. Once this is complete, the A/E will authorize the final payment, including all money held for retainage.

Final thought!

This process should be clearly defined in the Project Manual with the guidance of the Owner. If the project is divided into multiple phases or work packages, this process will need to be completed for each phase or package.

Please make certain to read the guideline "Project Closeout", and if you have any comments, please let me know. Next month join me as we discuss the "Project Record Documents". 

Till next month…

Steve Gantner RA, CSI, AGCMO, SCIP, CCS, CCCA

Senior Specifier - Conspectus, Inc.