Project Closure And Defect Management

Sep 8, 2021 | Education | 0 comments


It is no surprise that project closures can be a nightmare to navigate when facing challenges such as:

  • Pinpointing and agreeing on all remaining deliverables.
  • Client agreement on outstanding commitments.
  • Functionality challenges when teams demobilise and key members leave.
  • Loss of budget control during the deadline rush.
  • Decreased labour productivity.

The final phase of construction projects is a make or break period. Despite their importance, project closures are often overlooked and not adequately planned. The complexity involved in finalising hundreds of moving elements should not be underestimated.

How project closures are approached has a lasting impact on business reputation as well as profits.

Badly managed closeouts can completely sabotage an otherwise well-executed project. Damaging client relationships and undermining all the efforts poured into the project to reach the closing phase. No matter how well operations are running, nothing is final until the handover is successfully completed.

What is Construction Project Closure?

Construction project closure is the final phase of a construction project after physical construction has concluded but has not been handed over to the owner. It is not as simple as signing over an old car title, accepting money and walking away. A more appropriate metaphor would be a complex surgery where nurses, anesthesiologists, surgeons, equipment, medicine, and insurance all need to be painstakingly documented, coordinated and executed for success to be possible.

The nature of the construction industry lends itself to enormous complexity because of the immense amount of moving elements involved. Raw materials, resource quantities, working groups, locations, equipment rentals, vehicles, contractors, sub-contractors, and multiple disciplines all have to be accounted for and coordinated. Project closures involve every activity that ultimately makes the site ready for the owner to take over. Which includes cleaning, site inspections, closing all outstanding work to contractual obligations, waste disposal, and removing all temporary infrastructure.

During this time all-important document handovers are also concluded. Financial documents, health and safety documents, inspection certificates, building log books and many other documents all need to be handed over to the owner.

The final period of a project lifecycle is a rush to agree on and conclude outstanding work, complete site inspections, clean the site, finalise documentation and inform the owner about building operation and maintenance. During this phase a list of final changes is also concluded, this list is referred to as a snag list. Everything in this final phase has to be expertly coordinated between the project managers, general contractors and subcontractors as well as office staff to ensure that the project is delivered to the expected standard.

Common Closure Problems

Well-coordinated project closures are indicative of an exceptional management team, expert planning and perhaps a little luck. The age-old army adage “proper planning prevents poor performance,” holds especially true in this phase. Failure to plan for project closeout can result in long-lasting reputation damage, dissatisfied clientele, as well as delaying the completion and final payment date. When everyone is sprinting towards the final deadline, closeout errors can be extremely costly and cut into otherwise well-managed budgets. Common project closure problems are:

Communication Breakdown

Communication is coordination. When communication breaks down coordination between working teams starts to unravel. During the project closeout, it can be expected that communication becomes harder due to additional time pressure and demobilising teams. Key personnel start to leave when their tasks are completed which can make getting unique information or documents more difficult because these individuals are moving on to other jobs.  The deadline crunch places more strain on conversations which can lead to changes order delays on the snag list, documents not being produced and misunderstandings about key roles and responsibilities.

Another consideration is communication between the site and office staff. Accountants, designers and managers all work together toward project closure. If accountants do not have access to the information needed more delays will occur which can create frustration and resentment between teams. The easier it is for teams to collaborate, the smoother and more effective project closures will be.

Facilitating communication and collaboration through the use of software can be an extremely useful tool. Which allows teams to access necessary information without the need to hunt for key individuals or misplaced data.

Lost Data and Paperwork

When there are information silos where only one person has the unique information needed, things go wrong the moment these individuals become unavailable. Research has demonstrated that approximately 30% of initial data can be lost by the time the project closure phase is reached. It is no wonder that occasionally valuable information is unavailable or lost along the way. Documents created throughout the project lifecycle are required only at the end for the handover to the owner. Losing these documents along the way is a common and avoidable problem.

Owing to this fact, many construction companies have opted to use centralised document management software. Because who remembers a document from a month ago? Or the clipboard with the official certificates floating around? Was it one or three pages? Misplaced data is common when faced with the complexity of large projects. Any documents that are easily lost, paper-based, hold critical information or can easily be physically destroyed is a risk to the business. If all-important inspection certificates, lien releases, warranties, cut-sheets, or rental agreements cannot be located they can create snowballing delays and unforeseen expenses.

Final changes also need to be accurately tracked to ensure they have been carried out, noting the person responsible and ensuring that nothing has been lost, ignored or completed incorrectly. Having a clear framework that addresses who is responsible for these changes helps to avoid disputes. Change orders that have been forgotten or are not completed to the correct standard can become claims. Conflicts, claims and disputes have the potential to become larger profit eating problems. 

Having an integrated management software that keeps all project data centralised, accessible in real-time and allows for accurate record-keeping can save enormous amounts of time and frustration. Simple because it ensures everything is “written down” and stored electronically in the event that the information is needed at a later date.

Resource Management

It is human nature to want to slow down when the finish line is in sight but to win the race that is the moment when energy reserves have to be used in a final flat-out run. Often the closure phase lacks the labour or physical resources needed because of this “finish line in sight” phenomenon. During closeout, there can be unexpected changes, decreases in labour productivity and insufficient resources. The end of a project requires one final surge of work to complete however it is easy to underestimate the resources that will be required at the onset of a project. When teams start to demobilise there is a lull in labour productivity as teams effectively dismantle. Change orders, document requirements and last-minute corrections that have not been anticipated or communicated early can cause numerous problems.

At this time the most proactive planning is needed where outstanding tasks and changes are clearly communicated as soon as possible to avoid demobilising teams having to remobilise. Therefore it is worth anticipating and planning for unexpected changes and high resource demands during this period.

Managing Project Closure

A lot of coordination, paperwork, tracking, quality checks, inspections and communication happens during the closeout phase. Using integrated construction software that keeps track of project lifecycle data and information from both field and office-based departments can streamline and fast track project closure. Digital solutions help avoid lost paper contracts, inaccurate record keeping, forgotten change orders, misplaced invoicing, and incomplete asset information by simplifying the process.

Let’s take a look at project closure best practice:

Communicate Early

Incorporate early closeout conversations into your planning. Preparation for closeout starts the moment the project begins. Retainage or retention is widely used in the UK construction industry. Since these amounts greatly impact profits, beginning with the end in mind is preferable. Understanding the requirements of a successful project closeout will result in focus being placed on key deliverables to ensure things run smoothly. Arranging to have the snag list or closeout checklist at the onset can greatly help in identifying problem areas as the project progresses through its lifecycle.

Know Your Handover Requirements

Smooth operations mean nothing if they don’t adhere to the contractual and client-specific handover requirements. Having a thorough understanding of what your client wants and how they envision the outcome can save a lot of trouble down the line. It is beneficial to know what common and unique documents are required by the closeout phase because it provides a mental checklist that managers can keep an eye on to ensure nothing surprises or blindsides the project at the last moment.

Administration and Accurate Record Keeping

Documenting everything and keeping all data organised is standard practice although seldom adhered to. Nothing creates more delays, disputes and misunderstandings than disorganisation and nothing produces disorganisation as easily as large complex construction projects. Project administration is a necessary evil in the modern world. Ensure that verbal agreements, change orders and requirements are in writing and easily accessible. If there are cost overruns or delays make a note of them including lien waivers, so that performance can be measured and adjusted accordingly. When everything is documented and organised disputes can be resolved at their onset, information can be retrieved and operations concluded successfully.

It is also worth keeping a mental checklist of the most common documents needed to complete a particular task. Although procedures may vary between owners, project managers, and contractors and disciplines certain documents remain standard for example inspection certificates, lien waivers, and final pay applications. Having a list of these documents to track their progress intermittently can help keep things on track by providing a firm focus.

Ideally having all critical information stored online can be the most effective way to support project closures. Well organised drawers cannot compete with instantly available electronic copies. The process does not have to be difficult. Many digital solutions need little to no training and provide an instant benefit. Staying competitive in the digital age requires more organised solutions for businesses to be able to handle increasingly complex demands and workloads.

Anticipate Delays and Changes

Delays and project changes are inevitable in construction projects. Just as the repercussions of the Covid-19 pandemic could not have been foreseen,  so also material or labour shortages and change orders cannot be predicted. But that does not mean that they can’t be anticipated and planned for accordingly. Planning for example to keep an eye on delayed payments because payment delays are sometimes used as a stalling tactic to ensure payments are tracked throughout the process so that these concerns can be addressed immediately. The concept of agile project management centres around being flexible to accommodate unexpected events and is worth implementing when a lot of uncertainty exists around a project. Some time and thought should be spent planning and anticipating unexpected changes.

Script&Go’s Solution To Defect Management

A construction defect is a broad term that covers deficiencies in any manner. Such as incompleteness, subpar workmanship, malfunction or non-conformance in any construction elements. Any element that does not conform to the design or construction of the structure from a failure to construct works in a reasonable manner to predefined contractual obligation, quality standards or specifications is referred to as a defect or non-conformance.

Unfortunately, construction defects are often discovered after project completion and form part of the service agreement. Keeping track of the nature of defects, the teams responsible for correcting them, and their progress all form part of client satisfaction and services. When a business has begun new projects no one wants to be involved in the time-consuming process necessary to take care of unknown defects.

For that reason, Scrip&Go created Site Snag to take care of the administration and coordination involved with tracking and correcting defects. Site Snag can be accessed by new homeowners from any digital device to log their defect directly onto their floor plan and attach photographs with a brief description. Which immediately notifies the correct team of the defect and tracks progress through to resolution. Site Snag also addresses accurate record-keeping needs by storing all information in one centralised information management solution which can be accessed from anywhere in the world in real-time. Freeing up time and resources to be spent on new income-producing activities.

Streamlining processes to avoid common problem areas by using digital solutions provides businesses with a wider scope of projects they are equipped to handle. Having centralised management software saves time and profits by reducing human error. Enabling businesses to stay competitive and grow alongside the structures they build.

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