Mishaps and Misses: What a Missed Requirement Can Cost You

It’s no secret that missed requirements can tank a project’s budget, the GC’s ROI, and the relationship between builder and client. While everyone knows this, it’s difficult to grasp how just one missed requirement can turn into a prolonged legal battle and ultimately a hefty settlement. To help illustrate, we’ve compiled three stories below from actual project teams who shared how much a near-miss could’ve cost them–and for a few, how much they lost–without proper documentation and careful review of all project requirements.

1. Project Documentation for CYA

Let’s work backwards and start at the tail-end of this project. After closing out a mixed-use building, this GC was paid their retention money and closed the books on this project. They finished on time, under budget, and they believed fully contract compliant—all in all a job well-done. 

However, a few months later, still within the warranty period, a pipe burst and there was a water leak behind the walls of one of the units. Ultimately a minor issue, the facilities team opened the wall and fixed the leak, relieved to find that it was confined to the one unit, but were alarmed to see a much bigger issue: the distinct absence of firestopping. This news made its way up the facilities team and to the building owners, who pulled out their contracts and lawyers before calling up the GC. Their demands? Return with trades, tear open every wall, install the firestopping they were contractually obligated to provide in the first place, close and refinish the walls, and foot the entire bill for the rework while the owner enforces liquidated damages until completion. Oh, and the GC was on the hook for any associated liability as a result of this rework, just for good measure. This is the nightmare scenario for any GC, facing hundreds of thousands of dollars in rework and liquidated damages.  

Just as things looked bleak, the project team had a bright idea. They had been meticulous in taking progress photos and cataloging them throughout the life of the project, so they had photos of every unit before the walls were closed in. Sorting through those photos, the contractor was able to identify and prove that only a handful of units were missing the firestopping, and negotiated with the owner to reduce the scope of rework to just those units. The cataloging of these progress photos—which many project teams may see as a waste of time—saved this GC in the face of massive losses.

2. All Contracts are Not the Same

They say that being an expert is about having an understanding of how much you don’t know about your given field. Too often, project engineers who aren’t green (but still in the beginning of their career) will assume that all projects will require the same documents be handed over in the turnover package—or, even worse, that the owners won’t notice if something’s missing.

After recently purchasing a Pype Closeout license, one such project team had sent their Client Success Manager (CSM) at Pype their anticipated list of required closeout documents, which they had compiled themselves. Wanting to do their due diligence, the CSM ran the project specs through Closeout. A few minutes later, they realized that the project team had only accounted for collecting 120 of the over 600 documents required by the project specs.

Had that project team not decided to use Closeout to collect their supposed 120 documents from their trades automatically, they never would have been clued in to the other 480 requirements. That is, until the owners realized the documents were missing and began imposing liquidated damages for an incomplete turnover. 

Using Pype, they were able to collect all 600 documents in the original four months they had planned for document closeout, not only saving themselves massive financial headaches from this project, but learning a valuable lesson that they’ll carry to all of their future projects.

3. The Missed Mock-Up

For any contractor that has missed a mock-up, you know the pains associated with it. Not only are you on the hook for missing a requirement, but all of the now completed work that would have been approved in that mock-up is at risk. This could mean tens or hundreds of thousands of dollars on most projects, and possibly even millions of dollars in liquidated damages, rework, and legal fees. 

With so much riding on these requirements, it is surprising that the vast majority of submittal log and CIL software misses them entirely, leaving the identification of these essential requirements to the minds of the already bogged-down project engineer. What isn’t surprising, then, is how often these are overlooked until it’s too late.

During a demonstration of Pype SmartPlans, the Pype representative had run a drawing set for the GC’s previous project through the software and was showing them what it had found. As he scrolled through the comprehensive list of requirements, one of the contractors had him stop and click into one that caught his eye. 

“Damn, they caught it,” he said to the rest of his team. The contractor went on to explain that SmartPlans had caught the single requirement they had missed on that project—a mock-up—that ended up losing them over six figures when the project was done.

We get it, listing out requirements is a pain, and going back to do QA/QC on that list only lengthens an already tedious process. Yet, it’s one of the most fundamental steps you can take to ensure that your project stays on time and on budget. Ask yourself this: how sure are you, right now, that you’ve fulfilled or submitted against every requirement on your project, and how much of a risk are you willing to take with your project’s financial health? While we can’t help you answer the second question, we can show you what you’re missing


Pype is the construction industry's first SaaS provider for submittal log management and project closeout. Over 40% of the ENR top 400 use AutoSpecs, Closeout, and SmartPlans to provide unprecedented insights on spec and closeout data, help teams extract actionable information from specifications and plans to close communication gaps between design, construction, and operations teams, and ensure a higher level of quality assurance, efficiency, and risk management on projects coast-to-coast.

Related Posts

No pressure, let our demo do the talking.

Reach out to us and we’ll show you how to shave 40 hours off of your workflow.