CHAPTER 7 : PROJECT CLOSEOUT

CHAPTER 7 : PROJECT CLOSEOUT

Introduction

Completing a project requires procedures to closeout project contractual and administrative activities.

Role of the Organization in Project Completion

Closing contractual activities requires the Relevant body’s  project manager to oversee final settlement of project contracts, acceptance of contract deliverables, collection of contract documents and records (such as as-built drawings, operation and maintenance manuals, and warranties, etc.), and approval of final payments. The project manager’s responsibilities for administrative closeout relate to demobilizing the project team and completing activities with other stakeholders, arranging the disposition of project records, closing of funding and financing agreements, and performing an evaluation of project success and lessons learned.

Construction Contracts
The project manager, commissioning manager, construction manager/resident engineer (RE), and contract
administrator,  should  follow  the  procedures  and  actions  specified  in  each  contract’s  terms  and
conditions to settle and close the project’s construction contract agreements.
For a typical construction contract as project manager, you will need to confirm the completion and acceptability of the following activities :

Manuals  and  Training	: The  contractor  delivers  the  operations  and  maintenance  (O&M)
manuals for the facilities	constructed and equipment installed and provides any associated
training of Agency staff in their use.
Beneficial Occupancy  –  A contract  is  substantially complete  when the permitting authority
issues a Certificate of Beneficial Occupancy to the Agency and then the Agency can occupy
and begin use of the facility and equipment.

CONTRACTUAL CLOSEOUT

Guaranties and Warranties – With beneficial occupancy confirm that the contractor has initiated
the guaranties and warranties associated with the facility and equipment.
Record or As-built Drawings – The construction manager(CM)/resident engineer(RE) confirms that the  contractor has submitted the record drawings that show the as-built condition of the constructed facility and installed equipment.

Final Inspection – Lead a final walk through inspection of the facility to confirm that the contractor has completed the open punch list items and all work is completed correctly and satisfactorily

Resolve Outstanding Change/Claim Disputes – Project Manager should make every effort to resolve any outstanding contract disputes so that they do not drag on past contract and project completion.

Final Payment – With the above activities satisfactorily completed you can approve the final payment to the contractor and the Agency can close the contract.

Commissioning – Assure that all other commissioning activities have been completed in a satisfactory manner.

Professional Service Contracts

Although closing a professional service contract, for such as design or management services, does not involve as many milestones and activities as a construction contract, Project Manager still need to follow the completion procedures dictated by the terms of the professional service contract.

Typical closeout activities for a professional service contract include:

Verification of Scope Completion – Confirm that the professional service contractor has satisfactorily delivered the services called for in the contract scope of work.

Contract Audit – Where contract payments are on a cost plus fee basis, the contract provisions should give the Agency the right to audit the contractor’s costs. The audit should verify items such as direct labor rates, support for time charges, support for other direct costs, and justification for overhead rates

Final Payment and Release of Retention – With scope completed satisfactorily and audit completed, you can approve the final payment and release of any retention held back from prior contract payments pending satisfactory completion of services and audit of costs.

Project Demobilization

Managing the demobilization of the project can often test the project manager’s administrative and 

interpersonal skills in order to address the following end of project issues:

^§    Key project staff that see the end of the project coming and acquire positions elsewhere in the Relevant’s 

      Body’s before their project role and duties are complete.

^§    Or the opposite, Relevant’s Body’s  project staff whose duties are complete and are difficult to relocate off 

     the project because there is no immediate position for them to move to.

Professional service consultants, whose role is concluding, prematurely transfer key staff to newer long term assignments and/or endeavor to stretch out their services to maintain revenue. 

To manage demobilization as project manager, you should develop a staffing plan for the final phase of the project that plans the reduction in the Relevant body’s  own forces and those of the professional service consultants. As project Manager , You should work with the Relevant body’s  human resources to help manage the transition of staff off the project, ease their anxieties surrounding what their next role is, and provide incentives for key staff to remain on the project and defer moving on. Similarly,Project Manager should meet with the principals of the professional service firms to reach agreement on a timetable for winding down their services as the project concludes.

The project manager’s final challenge once the demobilization plans are in place is to keep the project team’s attention focused on the tasks needed to complete the project as opposed to what they will be doing once the project is over.

Closure of Project Financing and Funding

The project manager will need to work with the Relevant body’s  finance staff to closeout the funding to the project,the Relevant body’s  project responsibilities and work are completed and the associated financial records closed.

Disposition of Project Records

The project manager has to arrange for project records to be transferred to the Relevant body’s  document control function. Project records required to be maintained will be determined by a combination of the Relevant body’s  own records retention policy, retention requirements imposed by parties funding the project and any special requirements due to contract provisions. Should there be an unresolved change/claim dispute, it is important that all records pertaining to the contract and dispute also be retained.

Project Evaluation

Before the project is over and key project staff has dispersed, it is desirable for the project manager to hold a lessons learned session. The lessons learned should focus on identifying project strengths and weaknesses with recommendations on how to improve future performance on projects. To be most effective the project manager should encourage the project team to identify and document lessons learned through the project life cycle so that a database of lessons learned experience is built up for consideration at the final lessons learned session. Lessons learned can consider technical, managerial, and process aspects of the project.

Stakeholder Closure

Perhaps the most important aspect of completing the project is to achieve acceptance and closure of the project by the project’s principal stakeholders, those who sponsored the project, and those that are to use the facilities and equipment delivered by the project. The Project Authorization and PRD documents formally set out the expectations for the project. The project manager should now receive formal confirmation that with the hand over of the project deliverables from the project team to the operational users, the project sponsors and users have officially accepted the project deliverables.

This formal acceptance is also the opportunity to celebrate project success with some ceremony to mark the opening of the new facility and equipment into operations.

                                                  (END OF THE CHAPTER)