Top Steps to Efficient Construction Project Closeout
Closing out a construction project can feel like a daunting task, but with the right steps and tools, you can make it a smooth and efficient process. In this guide, we’ll walk you through the essential steps to ensure your project closeout is successful, timely and stress-free.
First of all, what is construction closeout and how does it work? Construction closeout is the final phase of a construction project before the building is handed over to the owner. The closeout is a multi-step process that involves ensuring everything is completed from documentation to final payment to meet all contractual obligations. It’s a critical step to ensure all parties are satisfied and the project’s objectives are met. By following a structured approach, you can avoid delays, reduce costs, and set the stage for future collaborations.
The Importance of Successful Project Closeout
A successful project closeout process involves more than just crossing the finish line—it’s about tying up loose ends and ensuring everything in the project is completed not only from your perspective as the contractor, but also from the owner’s perspective.
Project closeout means that the facility owner can move in and begin using the facility for its intended use while the contractor can collect final payment. This means that there’s a lot riding on the closeout going well for everyone involved.
If your team can manage your construction project closeout items throughout the entire project lifecycle, the project is more likely to be completed on time and within budget. Whether you’re managing a large or small construction project, a successful closeout can result in better outcomes for future projects and even repeat business for your company!
The Role of Owners in Project Closeout
Owners play a vital role in the closeout process. They need to provide clear expectations, ensure open communication and actively participate in key steps like inspections, approvals, documentation and final payments. Owners are the final determination on whether your construction project is accepted for completion.
Contractors should include owners in pertinent closeout communications. Communicating with the owners throughout the closeout process ensures they are aware of the closeout project timeline and checklist ahead of time and communicate any delays or changes to the schedule well ahead of the time for closeout activities.
The Planning Process
Early planning is at the foundation of any successful construction project closeout. Still, many people find themselves waiting until the end of the project to start pulling together the closeout and end up with unnecessary stress. But we promise there’s a better way!
The most successful construction closeouts are planned from the start of the project–don’t wait until the end of your project to start thinking about closeout preparations. By kicking off closeout planning at the start of your project, you’ll avoid delays and misunderstandings later on and have everything you need when the time comes to deliver.
There are so many important documents expected for your closeout–from inspections and warranties to the all-important punch list–that it’s essential to keep everything organized throughout the project, rather than scrambling to find everything at the end. With Kahua's Asset Centric approach, you can start your closeout planning earlier and stay organized through the entire project, avoiding the headache caused by waiting until the end. And since your team will have access to all documents, you avoid duplicated efforts and messy data entry.
The Basics of Construction Closeout
To pull off a smooth construction closeout, all moving parts need to fall into place. Managing your closeout successfully involves effective communication between everyone involved, staying on top of the punch list, wrapping up inspections on time, sorting out finances and keeping records and documents in order.
The right tools can make a big difference, helping you keep track of documents, invoices and contracts all in one place.
Communication During Construction Closeout
A good closeout always includes effective communication. Regular updates between contractors, owners and stakeholders make sure everyone is aligned and outstanding issues are addressed before they delay your timeline. Maintaining good communication around closeout expectations throughout the entire project will help you and your team avoid problems and uncomfortable conversations during the closeout.
Pre-Closeout Planning
Planning ahead for your closeout is key to avoiding delays and issues when closeout time arrives. By getting a jump start on organizing documents, setting expectations and anticipating challenges, you can save yourself from struggling to make things happen at the last minute. Think of it as setting the foundation for an easier wrap-up: the better prepared you are, the smoother the entire process will be.
Establishing Closeout Expectations
From the very beginning, set clear expectations for what the closeout process will entail. This includes defining deliverables, setting timelines and defining responsibilities for the duration of the project. You don’t want to be caught trying to get everyone on board with closeout obligations at the end of the project, so instead communicate expectations early to everyone involved.
Creating a Comprehensive Closeout Checklist
A detailed checklist is your roadmap to success. Create your closeout checklist during the project planning and include items like final inspections, document submissions, punch list creation and payment schedules. Compiling thorough checklists with your team ensures nothing gets overlooked at closeout time. Most of the documents needed for closeout are easier to collect throughout the course of the project, rather than frantically trying to pull everything at the end.
Final Inspections and Punch List Completion
The next step is conducting final inspections and creating a punch list to determine what still needs to be completed and/or fixed prior to final signoff. Final inspections are generally conducted after items on the punch list have been addressed. People involved in final inspections include building inspectors, fire marshals, health inspectors, etc. to ensure the construction complies with safety and accessibility regulations and building codes.
Creating and Managing the Punch List
The punch list is a critical tool for addressing any outstanding tasks or issues. It’s made up of incomplete or insufficient items discovered during the inspections walkthroughs. Generally, these are important issues that might be required to meet building codes or obtain important documentation needed for the closeout.
Collaborate with the owner and project team to create a clear and manageable list, then track progress to ensure timely completion. Items that are completed can be “punched” or checked off from the list. Kahua’s Construction Document Management software allows you to more quickly identify punch list items on site using our library of common items.
Financial Reconciliation
One of the last pieces of your construction project closeout is making sure finances are in order and final payments are made.
Finalizing All Payments and Change Orders
A project is not truly complete until everyone’s been paid for their efforts. At this stage, it’s time to make all outstanding payments to subcontractors, suppliers and other parties involved in your project. Address any change orders and ensure all financial obligations are met.
Releasing Retainage
In the already complex realm of finance, there are different payment structures and provisions that are specific to the construction industry. One of these is the retainage, which is a percentage (usually between 5% and 10%) of a contract that is held back until the job is completed.
Once all contractual obligations are satisfied, the retainage can be released to the general contractor (and subcontractors), often signaling the formal completion of the project.
Documentation and Record-Keeping
One key piece of construction closeout is keeping records from every project both for the closeout and as a learning tool for future projects. Efficient ongoing documentation allows you to keep a record of all key project details needed for the closeout at the time the documents are received, rather than waiting until the end.
There are a number of documents needed to finalize construction project closeout. Understanding what you need and at what point during the project you can obtain it is key to staying organized for your closeout. Some of these important documents include warranties, invoices, inspection reports, manuals for products within the building and the certificate of occupancy.
Tools like Kahua’s Document Management Suite simplify this process, providing centralized storage for all project records and documents. By coupling document management with Asset Centric Project Management, all asset information is stored directly with the asset in one place, ensuring that duplicate efforts aren’t made. The Document Management Suite also allows project documents to be stored and accessed for future reference.
Systems Training and Handover
Closeout planning should also include training for end-users on any systems or products within the building they may need to operate. These include communications systems, mechanical systems and electrical systems throughout the project. Creating system training guides or obtaining them from product manufacturers will ensure a seamless transition for your closeout and help you avoid any post-occupancy issues.
Post-Occupancy Evaluation
No project closeout is complete without a “lessons learned” exercise. For construction closeout, these lessons are identified during a Post-Occupancy Evaluation. Post-Occupancy Evaluations are conducted once inhabitants move into and use the building as it was intended. These provide valuable insights into how the project is performing and whether the building is meeting the needs of those using it.
During the Post-Occupancy Evaluation, the building owner connects with the contractor and/ or a third party firm to identify the building's successes and shortcomings post occupancy, allowing them to avoid these issues in future projects.
Closeout Construction Projects Efficiently with Kahua
Remember that a closeout is the final interaction with the building owner and helps determine their perception of your business. A poorly run closeout will be the last thing anyone remembers about the project, so making sure it’s done right is critical for your brand.
Luckily you can streamline your closeout process with Kahua’s comprehensive suite of tools. With an asset centric approach, from document management to punch list tracking, Kahua simplifies every step of the closeout journey. Learn more about how Kahua can help you deliver efficient and successful construction project closeouts.
