7 Steps to a Successful Project Closeout

Of all the steps in a construction project, closing out typically causes the most delays. Project closeout is the successful completion of a project and the final transfer of assets to the client. It includes heavy oversight to ensure the project is ready, like checking specifications, collecting documents and closing out existing contracts for equipment rentals or subcontractors.

The project closeout process can hit snags or setbacks because of complexity. Construction projects require a small army of subcontractors, a mountain of documents and adherence to countless specifications and codes. Preparing a project for closeout entails collecting proof that the project meets expectations. Gathering that proof can take a long time—years, even.

Residential and commercial construction projects alike are prone to changes and delays. Before the project closeout process begins, you can use this step-by-step list to plan ahead and note what you need to help your client seamlessly transition to site ownership and management. The more prepared you are, the fewer issues your project will experience, and the happier your client will be.

Table of Contents

Project Closeout Process in 7 Steps

Begin the project closeout process by building a list: what all will your client need to successfully take ownership of the completed project? This list should begin early in the process. Ideally, you’ll know what the closeout process will look like before you begin the project.

7 steps to a successful project closure

Open communication between you and your client during closeout will strengthen your relationship. Demonstrating your preparedness will make you an attractive hire for future projects, too. Aim to wrap up your project in as few steps as possible to make project management more organized. You can use the following steps as guidelines to prepare for the closeout of your next project.

1. Collect Necessary Documents

Construction projects should follow a plan to adhere to budget, schedule and scope as much as possible. A construction punch list, or a checklist for a given project, keeps track of ongoing tasks so contractors and managers know the status of each action item. This list will help you determine if you should address any loose ends before looping in the client to review.

In addition to a punch list, you might need the following documents and more:

  • Design approvals
  • Requests for information
  • Certificates for any inspections
  • Certificate of Occupancy
  • Certificate of Substantial Completion
  • Pay submittals for contractors

Knowing the status and location of these documents before a project is done can expedite completion time and avoid extra setbacks taken to create new documents.

2. Review Change Orders and Modifications

Change orders are modification requests submitted by a party working on the construction project in response to a delay or new addition. Note these requests in writing immediately so that keeping track of them is easy. When it comes time to wrap up, review all change orders to confirm their completion or indicate why they may remain incomplete.

3. Ensure Order Specifications Are Met

Before turning over your project to its new owner, you should conduct walkthroughs to vet construction by testing systems,  specifications that may have been ordered by the client. Project specs should be noted at the start of a project so that this step is a quality assurance check as opposed to a wild goose chase.

This step is when you’ll verify for the last time that the building has an effective safety plan and that residential codes were upheld during construction. If the project you’re closing incorporates BIM (Building Information Modeling) into building operations, this digital replica can guide you on a detailed walkthrough to guarantee that you don’t miss any items on the checklist.

4. Present to the Client

Once you make sure that your deliverables meet client expectations, it’s time for you to deliver the goods. This step hinges on the client’s pre-established understanding of project goals and timelines. If your project is running over budget, don’t stress. Just be sure to document all instances where estimates were inaccurate, and keep change orders together to note the cost of new project additions that altered project scope.

Fewer than one-third of construction projects come within 10% of their budget.

Especially with larger construction projects, it’s important to explain that cost overruns and delays are common—so common, in fact, that a 2020 study by KPMG found fewer than one-third of projects in the last three years finished within 10% of their original budgets.

5. Address All Client Feedback

It’s likely that your project has a requirement for client sign-off, satisfaction or approval in order to move forward with closeout. Your walkthrough presentation should be thorough and address all client requests, but more may come up during this time. Use your prepared documents to answer any questions about scope or completion, and note any final requests along with a timeline for completion of those requests.

6. Close Any Open Contracts

Client approval is a green light to move ahead with finalizing the closeout process. Once you know that work is complete, close remaining contracts so payment can begin. If you build a relationship with any subcontractors on a particular project, complete their contracts quickly to let them know you have their best interests in mind. This will also show your client that you’re efficient, prepared and ready to tackle another project.

7. Gather Project Takeaways for Future Learning

After wrapping things up with your client, reflect on the successes and failures of this recent project. These learnings will be valuable to you and your company in the future, particularly if you take on a similar project.

Archive your project lessons the same way you planned your project: take care to organize each step so it’s easy to find. Include a summary at the beginning that details special circumstances you might forget when referring back to this project. A project archive will help you avoid closeout mistakes in the future.

3 Closeout Management Mistakes and How to Avoid Them

Project closeout is complicated, with many steps to navigate over an extended period of time that could last from weeks to multiple years. With so much time in between delivery and closeout, it’s common for documentation discrepancies to surface.

30% of project data is lost before completion.

Emerson surveyed subcontractors in a study to determine sources of operational lag in construction projects and found that the length of a project impacts the length of time that closeout will take. Some contractors note that project budget determines closeout length, saying a $10 million project could take up to three years to close.

Read on for three common project closeout mistakes that you can avoid with diligent project management, great organization and thorough communication.

1. Too Much Internal Process Friction

Process friction was the number one snag that delayed closeout according to contractors surveyed by Emerson. If your employees don’t have sufficient mastery of the tools they use, or if redundant processes are slowing down business, it could be time to reassess daily functions.

  • Solution: Audit your project operations. Interview your employees to see if they identify any process snags worth addressing. Work together with your team to streamline project flow and to avoid treating closeout as an afterthought.

2. Project Variable Overload

As much as 30% of original data from design and construction was lost by project completion in the same Emerson survey. This means there is too much information to manage or the information is disorganized, and neither is ideal for smooth project closeout.

  • Solution: Get organized at the outset of a project. Have defined plans for the start and close of each phase and document project changes in organized files.

3. Staff Shortages Driving Workload Upward

The construction industry continues to suffer from a labor shortage. Fewer employees means fewer people to do the jobs demanded by a proper project closeout. It also means fewer people to oversee organization during the process, so assets may end up misplaced or discarded. This is especially common for change orders or scope changes that come late during a project.

  • Solution: Recruiting skilled workers is a challenge but not an impossible task. While you look to bring on new team members, emphasize organization as a priority and enact steps to achieve it, like monthly file audits until all projects are organized.

These mistakes are easy to point out because they’re prevalent. The construction labor shortage is an industry-wide problem that leads to variable overload. Meanwhile, internal friction builds while attention focuses elsewhere rather than on speeding up process flows.

Construction Project Closeout Template

To help you get organized and plan ahead for your next project closeout, here’s a template of a typical project closeout. You can download the editable template by clicking the button below and making a copy, to which you can add list items or other modifications.

An architect drafting blueprints while reviewing a final closure checklist

A successful project closeout comes by first focusing on organization. Planning ahead for the final stages of each project brings the closing stages into the discussion at the beginning of the schedule. This helps all parties involved get on the same page about project details, like expected shipment dates or tentative equipment to rent.

Keep closeout in mind when drafting your next construction project schedule so everything ends up right where it needs to be and the client remains satisfied.

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