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Closeout the Trades Before They Leave the Site

You are in the homestretch, all that remains on your project is the closeout portion. You’ve been working on the project for months or even years at this point and it is most likely a distant memory for most of the subcontractors who worked on the job. Your team and the trades are beyond ready to finish punching out, close the books on the project, and settle up any remaining payments. Sounds like a good time to do weeks of tedious clerical work that is tied to roughly 300% of your profit margin, right?

Of course it isn’t. The last thing anyone who just ran a marathon wants to do is stand at the finish line while staring at a map trying to figure out if they ran the race correctly. There’s a reason waypoints and markers get set up on course and a course map is sent to runners well in advance. It’s so runners can plan ahead, run the course correctly, and prevent the stress of making any mistakes along the way. Just like a marathoner, which you essentially are, there needs to be focus paid ahead of time and along the way in order to ensure that you reach the finish line and closeout on-time.  

The first step in this process is to identify the closeout requirements for the project. Sitting down and reviewing the specifications in order compile this list can take an extended period of time. When done early enough, closeout requirements can be pulled from the bid set of specifications and included in a bid package. This shows the owner and architect that you are already thinking about closeout and have a grasp on the requirements, which gives your bid a leg up over the competition. If you wait until the end of the project to do this, you’ll probably run out of time and ask for the “normal closeout documents” from the trades. Not a great idea; the associated liability of doing so is something we’ll cover in a later post. 

Instead, going through and identifying closeout requirements while creating a submittal log at the beginning of the project is a far better idea. Not only will it condense two similar processes into a singular process, but you can then start utilizing the closeout log right away. This provides the subcontractors with advanced notice on any items that might take a while to compile and allow them to ask manufacturers for O&M and warranty documents when placing orders. 

If you follow this methodology and the trades are subsequently sending you their closeout requirements as soon as they complete their scope of work, you are going to complete closeout far faster than before. It takes commitment and employing this process as early as possible, but doing so makes tracking and approving closeout requirements a pretty low maintenance task that is lightly spread out over months, not jammed into a few weeks.

Some tips on accomplishing this:

  • Set aside a bit of time each week where a PA or PE goes through everything outstanding and submitted by trade partners. Make sure this information is logged in a system of record and reported up to the right stakeholders.
  • Have a process in place for requesting that subcontractors revise and resubmit any documentation turned in that does not meet the specified requirements. Be very specific as to why you are requesting that they revise the documentation and resubmit it to you.  
  • Keep track of your closeout completion progress at both a project and subcontractor level. Don’t release final payments for any subcontractors that don’t meet their closeout requirements.

By adhering to an early closeout program, you help subcontractors with the number one problem they face on a daily basis; cash flows. In doing so, they’ll be far more motivated to work with you again and understand the importance of turning in closeout documents sooner. Once all of the documents are submitted, you can turn them over to the owner quickly and in a streamlined turnover package, securing the timely release of the final payment and therefore positively affecting your own cash flows. This also helps in building up a positive reputation among subcontractors and owners that can be invaluable when working on future projects.

When starting your project with a focus on closeout, all stakeholders win. The trades can be paid sooner, which makes them happy. The final payment is released sooner, which makes your PX, VP, and accounting team happy. The project is delivered to the owner sooner, which makes them happy (and most likely contemplating negotiated work for their next project with you). Most importantly though, there will be significantly less work to do at the end of the project, which makes you happy.

Looking for ways to start closeout sooner and automate the process? Pype Closeout can do all of this for you—build a closeout log from the specifications in minutes, send automated requirement collection reminders to subcontractors, keep track of submissions and approvals, be used by the accounting department for payment release approval, and deliver a polished PDF turnover package with a hyperlinked table of contents. There is a lot riding on successfully closing out your project, don’t leave it until the last minute.

John Bennett

As Director of Customer Success, John brings almost a decade of AEC industry knowledge to Pype. Specializing in software implementation and with experience consulting and advising project teams, he provides AEC best practices and a love of cranes to his Customer Success Team at Pype.

Connect with John on LinkedIn.

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