~~ Contractor Best Practices Newsletter ~~
by Ron Roberts
The Contractor's Business Coach
Volume 2 - issue 22
May 30, 2007
Tip of the Week:
Just because you are loaded with work doesn't mean you
shouldn't be aggressively pursuing future work.
Backlogs always evaporate faster than you expect!
An Action Plan for Surviving Close-out
Close-out. What an ugly process.
During the lead up to substantial completion, problems start popping up like crabgrass. You can’t stop them. You can’t avoid them. They drive you nuts, constantly testing your temper by pushing your hot buttons.
If you are one of the finishing trades (painter, flooring, finish carpenter, etc) you end up tripping all over yourself to finish the job, to avoid liquidated damages, and to remain efficient.
Regardless of whether you are a finishing trade, all trades struggle with the close-out paperwork.
You need an emergency action plan to survive close-out and to get your retention application paid promptly.
Four habits will help you ride out the close-out process relatively painlessly.
Each habit is simple, doable, and takes just a little self-discipline.
Start your close-out process weeks or months in advance. A good rule of thumb is one month for any job whose duration is less than 6 months. Two months for jobs up to one year, and three months for jobs over one year.
At the appropriate time, your office should scour the specification to list all of the items required for close-out and final payment. A check sheet of all requirements should be made and sent informally to the builder.
Start pulling together all of the paperwork required for close-out. Pester your suppliers for the operation, maintenance, spare parts, and warranty documentation. Get your lien releases up-to-date and organized. Make sure your insurance certifications are ready to go with properly identified insured parties.
Sit down with your site leader and plan out the remaining work. Make sure you have arranged for all of the materials, equipment, and personnel he needs to finish the job promptly.
Make sure every one of your RFIs has been answered to your satisfaction. Follow up on open change orders. Triple check your pay applications to make sure they are correct.
Express the importance of a smooth, well-organized close-out to everyone involved on the project: your in-house staff, your field leader, and your suppliers. Create a detailed action plan that includes completion date and responsible party for each task.
Visit with the builder and the architect to learn their quality hot buttons. Everyone has personal pet peeves - best to uncover them while you can still do it right the first time. If you start this discussion early, you may have time to reason with them.
Your expertise on the standard means and methods
for your trade probably far exceeds the knowledge of
the architect and builder. They can be persuaded if
approached correctly. Act sufficiently humble to avoid putting them on the defensive.
If you feel their demands are above and beyond the contract, settle that later. Fighting that fight during close-out is guaranteed to cost you money now and in the future.
The best approach to punch lists is to take the bull by the horns. Don’t lie back and hope the builder, architect, and owner will let you slide on quality.
If they see a perceived problem and do let you slide without fixing it, they will end up demanding an unfair reduction in payment to offset perceived less-than contracted quality.
Once you know their quality hot buttons, create your
own punch list which identifies areas that would
You must stay committed to your action plan, your contractual obligations, and your professionalism. People don’t lose weight and get in shape unless they follow their diet and exercise program to a "T".
Action plans only produce the desired results when their tasks are carried out on time. On-time completion often requires a commitment of significant resources for a brief period of time. Make that commitment.
Nobody involved in the project can approach close-out as if their usual work effort will be sufficient. It will not be.
Close-out requires a sense of urgency, a total commitment to finishing every task 100% complete. Other priorities must be juggled to accommodate successful close-out.
To avoid financial punishment, you must keep your emotions in check during close-out.
Why? As in emergencies, where our natural instincts are often fatal courses of action, so go close-outs. During close-out, our natural instincts will often lead to horrific financial outcomes, turning a profitable job into a money loser.
Contractors who keep their heads during close-out, score big points with builders and the owners.
Contractors who fail to temper their anger, place the bull’s eye of back charges on their chest.
The key to controlling your emotions when all those around your can’t?
You will need to dig deep in your heart to forgive your fellow contractors, the builder, and his client, the owner, for the things they say and do during close-out.
Forgiveness displays leadership. Leadership earns respect. Respect leads to fair resolution at job end...and more work in the future.
Close-out is the tipping point of customer satisfaction. It forms the builder’s and owner’s final opinion of your company’s performance and reliability.
Excelling during close-out sets the stage for future work.
Until next week, good luck with your business.
The Contractor's Business Coach
P.S. Share this with your contractor friends. They will thank
you for it.
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WEBSITES TO FREQUENT
World Sweeper.com contains several articles written
to help contractors run profitable businesses.
For Construction Pros.com is the online presence of
Cygnus Media. Cygnus publishes several construction
magazines. Bookmark their site and check it monthly
to find helpful articles.
This website contains an abundance of great articles
and helpful tools to help owners improve their business
Shouldn't I pimp my own site? :-)