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7 Critical Steps for a Successful Commercial Construction Project Closeouts

The main objective of the construction project closeout activities is to end the project in a way that reflects favorably upon the team, the team leader, and the organization. This phase requires the completion of the seven critical activities from the Maxx Builders project team. It is mandatory that comprehensive planning makes the closeout phase rather straightforward & precise.

  1. Perform project closeout
  2. Perform client closeout
  3. Perform organizational closeout
  4. Conduct subcontractor closeout
  5. Perform final risk assessment
  6. Write project final report or briefing
  7. Conduct team closeout

Project Closeout Plan Will Make or Break Your Project

Poor closeout can even totally derail a project that has otherwise been running smoothly. All the work you did to engage with the client and build a relationship can be destroyed in this final phase. No matter how well the final stage looks, the job is not complete until all steps of the closeout have been completed and everyone goes home satisfied.

What makes this vital process so easy to mess up—or overlook entirely? Failing to consider the closeout process until you are in the final phases, not having a plan for turning the project over to the owner, and failing to follow through could turn your dream project into a nightmare. Delays are common at the last minute during the closeout process, simply because vital pieces of information are missing, papers need to be tracked down, or unfinished change orders suddenly turn into actual claims. Any one of these issues can derail your progress and cause your project to run past the anticipated deadline.

With the right tools, the closeout process is surprisingly simple and you can be sure that everything is complete, that your customer is satisfied, and that you are keeping the avenues clear for future projects and revenues. A look at some construction project closeout best practices and efficiency measures can help you make the most of this critical element.

What Is Construction Closeout?

A construction project isn’t like an old car; you can’t just sign over the title, accept money and walk away. You need to address everything from the work performed by your subcontractors to the return of rented equipment and facilities and be sure that your site is truly ready for the end client to occupy.

Much of the problem with project closeout is that it involves detailed coordination, paperwork, and tracking over so many processes and systems. However, by using field productivity software, you can capture data and intelligence in the field and more effectively streamline project closeout. Closeout does not have to be overwhelming or a nightmare to deal with; if you’re still struggling with paper contracts, change orders, and invoicing, some innovations in technology could be all you need to simplify your closeout process.

Purpose of the Closeout Phase and the key role of Our Project Manager

The purpose of the closeout phase is to conclude all facets of the project to the satisfaction of upper management before the team members start to leave the team.  We treat the seven activities listed above as a continuation of the execution phase.

Maxx Builders’ project manager’s role in the closeout phase is to assure that all aspects of the project are properly concluded. At the end of the project, team members often lose their focus; they lose some of their discipline for showing up on time, concentrating on the task at hand, etc. It is the project manager’s responsibility to help the team retain its focus during the last activities.

Each of the seven activities will produce a memo to the project manager stating the results of the activity. The capstone output of this phase is the project’s final report, written by the project manager, which summarizes the results of the seven activities.

Poor communication between the field and office

Your designers, accountants, and managers all need to play a role in the closeout process. If they don’t have what they need or can’t access information, then your closeout will be full of delays and frustration. The easier it is for your teams to collaborate, the better your closeout experience will be. Facilitate this communication using intuitive construction software designed to enhance collaboration and closeout will be a breeze.

Delayed change order resolution

A change order that is misplaced, ignored, or not completed correctly can easily turn into a claim, which will slow your project closeout. Track change requests and make sure that work is complete well before this final stage to avoid not only delays but conflict as well. Conflicts, claims, and disputes can slow your progress and eat up your profits; as soon as a change order becomes a claim, it becomes more difficult to resolve.

The reverse bell curve

You’ve likely heard that projects typically require the maximum amount of effort during the startup and closeout of a project. However, most people leave out the most important part of this common piece of advice: you may not always have the resources you need for that extra push at the end. This odd phenomenon impacts projects of all types and sizes; you need to be aware that work performed at the end of the job may not be of the same quality as work performed on day one. Team members will demobilize from the site when they think they are done; notifying them in a timely manner of outstanding closeout tasks can help you avoid delays at the most critical part of the job.

Lost information and paperwork

The closeout process includes so many individual pieces of information, such as emails and file distribution, that studies show up to 30% of initial data created during design and construction phases are lost by project closeout. Those documents you had at the beginning of the project, three weeks ago? If you don’t have a document management system in place that lets you know where they are at all times then they’re long gone, along with the clipboard you had them on.

Any time the critical documents you need are in an easy-to-lose, easy-to-destroy format like paper, you take on risk. Key closeout documents like warranties, lien releases, and facilities training documents come in all different formats, at different times, all towards the end of the project. If you can’t locate any of these items at closeout, you could be in for a serious headache when you should be celebrating a successful project.

Project Closeout: A Detailed Plan for This Phase

During this part of the construction project, all facets and components of the entire job need to be properly finished and signed off on before the team begins to disperse. The contractor or project manager needs to be sure that all parts of the project are truly complete and that the last components installed look as good as the first.

Implementing a comprehensive, step-by-step approach to project closeout and using technology to aid the process can boost efficiency and ensure you are handing over a completed work you are truly proud of. The right approach at this stage can also ward off problems and ensure the client ends up happy with the experience and final results.

Problems that occur during the Closeout Phase

A number of things can go wrong during project closeout:

The team failed to plan out the closeout phase and is attempting to plan and execute the closeout at the same time.

The resources of people, money, and time have not been planned so it is a haphazard effort at best with key closeout activities being missed or truncated. The solution is to plan the closeout activities at the same time the rest of the WBS is developed. Maxx Builders project team includes the closeout work packages (activities) in the budget, schedule, WBS, etc. Include the closeout activities in the resource plan so each team member knows his or her responsibilities during closeout.

Team members start to leave the team before the closeout phase is completed because they do not understand all that has to be done and their roles in the closeout.

The project manager should tell the team early in the project that the closeout phase consists of activities that include all team members. The project manager should build a sense of team cohesion so individual members don’t consider leaving the team early.

Functional managers start to withdraw their team members before the closeout is complete.

In the interim briefing to upper management, the project manager should indicate that the project closeout consists of a number of important closeout activities which will require the full team to perform — with the request that functional managers not take team members back until released by the project manager.

The team surfaces a number of unresolved issues, uncompleted work packages, or unacceptable deliverables.

This means the project is not finished. The project manager will have to remain on the team (perhaps with a small staff) after the team disbands to resolve the problems. One preventive solution: the project manager communicates frequently with the customer especially when it is time to get the customer’s approval (in writing if possible) of work performed, deliverables submitted, or problems resolved. Don’t wait until the end of the project to resolve issues in the hope that they will have gone away by then. A memo for the record is a good way to document that something happened. If it is inappropriate to ask a customer or stakeholder or upper manager to sign a document, use the memo for record. In the absence of a negative response from the upper manager, we conclude the action, deliverable, etc is acceptable. A statement of the following kind might help clarify this: “In the absence of any feedback within the next 10 business days, we will conclude that this action, deliverable, etc is acceptable.”

Activity 1: Perform Project Closeout

This work package has as its purpose to determine that all the requirements have been satisfied. Assign one or two team members to perform the following subtasks of this work package:

Validate and document that all the work packages listed on the WBS have been completed. If any work package is not complete for some legitimate reason, document the reason. Review the business case definition and charter to assure and document that all requirements on these documents have been completed or resolved. Review the contract, if there is one, to determine that all requirements have been met. Conduct the final project evaluation. Each subtask should conclude with a memo to the project manager indicating the findings and conclusions. Memos should be short, simple, and direct.

Activity 2: Perform Client Closeout

The purposes of the client closeout are to:

Assure that the client has accepted the deliverablesMeasure the degree to which the client is satisfied.

Subtask (a) requires someone to interview the client and determine that all deliverables have been received and accepted. A memo to the project manager is how this subtask is documented. Subtask (b) is greatly facilitated by using customer satisfaction. The question of whom to survey is important. Get survey information from all the important stakeholders in the customer organization.

The output of this work package is a memo to the project manager indicating the results of each subtask.

Activity 3: Perform Organizational Closeout

The aim of this work package is to conclude the team’s use of organizational resources and to make a final resolution of the remaining resources. Select a team member to complete the four subtasks in this work package:

  1. The first subtask requires the writing of a memo to the facilities management office stating that the project room will be vacated on a certain date. A copy of this memo is sent to the project manager along with the report on the entire work package.
  2. Releasing all borrowed or rented equipment. The team member will write a memo to the technical support office if the equipment had been borrowed from that office or a letter or telephone call followed up by a letter to the rental company from whom the equipment was rented. The memo or letter will need to include an inventory of equipment being returned. This subtask includes reconciling any differences between the original inventory and the return equipment inventory. A copy of the closure memo will be provided to the project manager.
  3. Finalizing financial records and funds. The person doing this subtask will reconcile the original project budget against monies spent and outstanding invoices and expected incoming invoices plus the balance that will remain after all invoices are paid. The process and documentation must be acceptable to the finance department; the financial records are not reconciled until the finance department concurs.
  4. Preparing memos of appreciation to functional managers and other stakeholders. In each memo, try to identify a unique contribution or help the team received for which the team is grateful. Write a memo to the project manager stating the results of Activity 3.

Activity 4: Conduct Subcontractor Closeout

The purpose of this work package is to reconcile all subcontractor matters. The three subtasks are:

  1. Determine that the subcontractors have completed all the work for which they are responsible. Include the results of this investigation in the memo to the project manager.
  2. Reconcile the amount of monies due to the subcontractors. Coordinate with the procurement department on this. Include the results of this reconciliation in the memo to the project manager.
  3. Prepare subcontractor letters of appreciation for each firm that performed well. Write the letters for the project manager’s signature and send a copy to the Procurement Department. Write a memo to the project manager stating the results of this activity.

Activity 5: Perform Final Risk Assessment

Are there any threats or concerns you need to think about at the end of the project? This step is deceptively minor; it doesn’t take a lot of time, but if you uncover a risk, it can derail your progress entirely. Review the project to identify any risks or potential liabilities and to create a strategy to mitigate any problems or issues you identify. Legal risks, political issues, cash flow, worker training, transferring the deliverables, and other risks should be carefully assessed to ensure the final handover is easy and efficient.

Activity 6: Write the Project Final Report

Officially close out the project by creating a document that outlines each of the previous steps and provides insight into each part of the process. Use this memo to demonstrate that all facets of the job are complete, list out any problems you identified, and offer suggestions to improve performance in the future. This report can be presented to upper management and used to further improve your processes and performance.

Activity 7: Conduct Team Closeout

This work package contains five tasks:

  1. Conduct the final lessons learned session. A lesson learned is a piece of experience that may be used to improve performance or repeat good performance.
  2. Retaining lessons learned from successful actions. Something that the team did that worked should be retained as a lesson learned because the next time the team is faced with a similar problem, it will want to use the action that was successful in the past.
  3. Retaining lessons learned from unsuccessful actions. Something we did that did not “work out” or something we did not do that caused a subsequent problem needs to be retained as lessons learned.
  4. Do not wait till the end of the project to conduct the lessons learned session. If you do so, many lessons will have been forgotten and the information will not be available to help on the current project because the present project is concluding. A better strategy is to conduct this session after the team has been together for about a month. Instead of asking “What went well?” ask “What is going well?”
  5. Use the lessons learned session every two or three months to get a sense of the team’s morale, gather lessons learned, and shape behavior. The result of these sessions will be to highlight desired behavior, reward desired behavior, and clarify desired behavior. Rewarding behavior increases the probability of getting the same behavior again. The net result is that the team becomes more cohesive and committed to the project.
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