How to Master Your Closeout Process: Advice for Subcontractors by Subcontractors
How you end a project is how you’ll start the next one. What do we mean? The impression you leave on your GC will carry over into new projects you might bid for. This is why nailing your construction closeout process is vital to sustaining customer relationships and having a continuous flow of work.
Every month, Billd holds online Subcontractor Meetups, where subs present on and discuss topics like how to increase your bid win rate, beat the labor shortage, and in this case, perfect your closeout process. Longtime Billd contributor Ernie Adams led our last meetup, with nearly 20 years of experience to inform how he approaches closeouts. We’ll go over what Adams shared, and what the subs at our meetup had to contribute.
Table of Contents
The 3 Factors that Make or Break the Quality of Your Construction Closeout
A closeout can either be a selling point or a liability for a sub. If you want it to be a selling point, the first step is simply acknowledging that the closeout will affect the GC’s perception of you, for better or worse. This is an important step if you’re going to give it the attention it deserves.
According to Adams, how you handle these aspects of a closeout will determine whether the GC wants to work with you again:
1. Prevent Headaches by Sending the Right Documents
The worst thing you can do is not know what documents the GC needs for your closeout. Carefully read their guidelines to prevent unnecessary back-and-forth and frustration. You’ll send whatever you thought they needed, not what they actually needed. You may send a warranty letter, an as-built, or a manifest, only to find out they need a manufacturer’s warranty or something else you didn’t consider.
Sending the wrong documents is not a harmless slip-up, it:
- Becomes an oversight that wastes time and money.
- Gives you a reputation for not knowing what you’re doing.
- Makes it seem like you wouldn’t be able to handle bigger and more lucrative projects, because you couldn’t handle one of this size.
- Delays retainage, not only for you, but for everyone else. You don’t want to be that guy holding everyone else up.
Don’t be afraid to ask exactly what your GC is looking for at closeout.
2. Leave a Lasting Impression with Clean Presentation
You should keep everything in one clean, concise email, and here’s why. You’re only doing one job and one closeout. The GC is doing a closeout for everyone of the dozens of subs they’re working with. Going back and forth with up to 50 different subcontractors can be exhausting for the GC. So who do you want to be? The sub who didn’t send the right paperwork, and pulled it together across 10 emails? Or the sub who read the requirements ahead of time, sent their paperwork in a single, polished email, and helped get one closeout entirely off the GC’s plate? This will position you as a sub they want to work with because you have your sh*t together.
For more, see the section ‘How to Add a Final Polish to your Closeout Documents’ below.
3. Save Time with a Repeatable Closeout Process
Even though requirements will vary somewhat from project to project, try to keep your closeout process internally consistent. Don’t reinvent the wheel and come up with a new way of doing it every time. Adams advises you to have a simple, repeatable process for finding out what documents you need, who will acquire what, and presenting it all to the GC.
Remember – time saved on your closeout process adds up with every single project.
How to Create a Solid Construction Closeout Process
No matter what closeout process you’re using right now, it can always be improved. Take a fresh look with Adams’ from-scratch approach.
You want to develop a process that:
- Is easy to repeat from job to job
- Will keep your documents tightly organized
- Encourages the team to take ownership of their respective duties, with transparency on who does what
These are the steps that Adams’ company used to create their first official closeout process.
- Read the closeout specs from the GC and use them to create a closeout checklist.
- The checklist should be a living document that every member of your team can contribute to and access online, not a printed document locked in someone’s filing cabinet.
- Define each action item on the list in terms of:
- What it is
- Who is responsible for securing it
- When it’s due.
- Refer back to this closeout checklist, and be compiling closeout documents all throughout the process.
- Rinse and repeat on your next project, making small adjustments as necessary to reflect any differences in closeout expectations.
- From here on out, you’ll be cross referencing future GC’s closeout checklists with the one you’ve already built.
- Add “applicability checkboxes” next to each item. In order to reuse this on other projects, there will inevitably be some items that don’t apply to each one.
Adams’ team also created a responsibility matrix to keep track of who needed to provide what. For example, it was the PM’s sole responsibility to determine when and how the following was going to be managed and sent to the GC:
- Color charts
- Shop drawings
- Fit tests
As the job went on, they regularly consulted the GC and the spec book, adding anything else they required, like punch lists, jobsite photos, change orders and RFIs.
When to Send Closeout Documents
The timing of closeouts is actually something you can be strategic about. How you approach timing depends on a few different factors. It starts with asking yourself a few questions to assess your customer quality:
- How trustworthy are they? How strong is my relationship with them?
- What do their payment timelines look like?
- Are they difficult to work with? (Disputing change orders, etc)
If they can be trusted, Adams advises you to prioritize their closeout process and send your documents quickly. It pays to impress a valued customer.
However, if they’re a slow-paying, difficult customer, it may be a better idea to hold those closeouts until everything is settled or it becomes apparent that they’re going to pay soon. In Adams’ experience, sometimes the GC would try to hold progress payments because he wasn’t sending closeouts. But he successfully pushed back against this any time it happened, reminding them that that’s what retainage is for.
Pro Tip: It’s important to note that, regardless of when you send the documents to the GC, the earlier you start the closeout process the better. Adams advises you to begin as soon as you start the job.
Use Technology to Perfect Your Closeout
The market is rife with new technology to streamline the construction industry. You’ve heard it a million times, but it’s crucial that you take advantage of it. Some companies have been slower to adopt construction software for things like digital takeoffs, document control, jobsite documentation and project management. Adams highly recommends it because it simplifies the entire process. Even if you have to run through a few different free trials to find your best fit, the exploration is worth the effort.
Again, any time saved on closeouts compounds with each project.
From a project management perspective, the right software will help the PM centralize everything they need to see in one dashboard, from as-builts to redlines to internal punch lists.
Check out some of our personal favorite options below:
Protect Yourself Against Excessive Punch List Demands
When you’re trying to finish a GC’s punch list, it can create countless unpaid trips back to the jobsite. It’s a chaotic time, with different opinions flying around on what needs to get done. It forces you to dispatch crews and lose time and money in the process. And you can’t bill for that work, so it’s vital to try and minimize the customer’s punch list items by zeroing in on them yourself.
There are a few ways to safeguard against this:
- Do Your Own Punch List – You can beat the GC to the punch (no pun intended) on final inspections, if you create your own first. Adams and his team make a punch list internally prior to doing the GC’s. It helps them catch issues before the GC does, and minimize the number of trips they have to make back to the jobsite.
- Invite Key People to the Walkthrough – Once you have your internal punch list, Adams recommends getting the superintendent or a rep of the GC to walk with them, so they can go over the punch list together and get their opinion on important items. This fosters communication and transparency between them and their customers.
- Negotiate One Single Punch List into Your Contract – A notable pain point with closeouts is having multiple punch lists – one from the GC, one from the owner’s reps, second drafts, etc. Andee Hidalgo of Spearhead Construction takes a different approach, one that Adams considers both creative and effective. She attempts to negotiate one single punch list into her contracts. Otherwise, there’s a chance that anyone from the PM to the project engineer to the architect to the CM to the owner could issue their own. Hidalgo tries to pinpoint who the final authority on the punch list is right in the contract. Her customers generally understand how costly it is to return to the jobsite over and over again, so they’ve been willing to accommodate her on this request.
- Take Comprehensive Pictures – Photographic evidence of how your work was completed is one of the best insurance policies you can have against something going wrong. If anything malfunctions, but you can show that your work was perfect when you left it, you’ll have an easier time proving that the malfunction is a billable change order, not a punch list item.
How to Add Final Polish to Your Closeouts
Like we said, closeouts are the last impression you leave on the GC, so you want to make them count. There are a few ways to make your closeouts really shine before you send them off.
Presentation – Don’t guess. Ask your GC how they prefer to have closeout documents packaged, and make it look as clean as possible – whether it’s one document or many, a Google doc or PDF. Different trades have different requirements, of course, so be sure to ask what they’re expecting of you with regards to content and presentation.
Clarity – Include your checklist as a cover sheet/table of contents to the closeout documents. Make sure everything is clearly titled and numbered to make it easier on the GC as they dig through it.
Appreciation – Send thank you emails, and call out anyone you worked with who helped support your success on the project. Thank them for that support, and CC their boss or team lead. You’re commending them to their superiors, which cultivates good will for you, and makes the GC more confident in who they hired.
Download an Experienced Project Manager’s Closeout Tools in the Builder’s Boardroom
Ever wondered what a Senior Project Manager at a large electrical contractor uses to closeout projects?
To download Donny Metcalf’s closeout checklist and project responsibility matrix and to view a recording of February’s closeout strategies meetup, join the Builder’s Boardroom. In the Builder’s Boardroom, we share tools and tactics by veteran subcontractors for veteran subcontractors.
Plus, when you join the community, you’ll have the first chance to reserve your seat for our next private, limited-space meetup.
Personal Closeout Strategies from Other Subcontractors
After Adams’ presentation wrapped, attendees broke into three groups to ask questions and discuss their own closeout processes. We’ll go over takeaways from what each group discussed.
What have you done to speed up or make your closeout process easier?
- One sub explained a tactic that has been extremely helpful to her. She puts in her contracts that change orders must be processed in the same month that the work is done, and so far, she hasn’t had a GC mark it out.
- Don’t forget that some documents may take a while to get, so factor those document lead times into your greater closeout timeline.
- They also think it’s critical to define who on your team will have direct contact with the GC on a daily basis.
- Kyle Follett, VP of Finance for Sparr Envelope, insisted that the best closeout starts at the beginning of the project. Before you even finalize that contract, get the right people in the room to ensure transparency around all expectations. Revise your scope if need be so everything is clear and concise.
- Speaking to the importance of proactivity, another sub added that the closeout process should be in place before you ever step foot on the jobsite.
- One sub recommended using walkthroughs to identify things that might slip through the cracks of a closeout checklist. Unexpected things come up when you’re on site, so it’s an opportunity to get different information that may not be on your list. Once you’ve identified those issues, you can generate an email based on that punch walk or find time in a meeting to bring up those revisions.
- Donny Metcalf, Senior Estimator and Project Manager at Lochridge-Priest Electrical, advises you to set your closeout process up at the same time you’re doing your submittals. He also clarifies with the GC whether they want their submittals turned in by section, so that the whole submittal package doesn’t get held up by individual submittals that are taking a long time. The same principle can apply to closeouts. Ask their preference upfront to clear up their expectations.
- For her closeouts, Hidalgo has to send warranty information on all the materials used in the work she did on the job. She’s taken to uploading all the warranties for the products she used as PDFs, then compiling them into a single eBook link that she sends to her customer.
- A concrete sub mentioned the different classifications of concrete finishes, and how important it is to reiterate to your customer the quality of the finish they’ve agreed to in their contract. Sometimes a GC or owner will suddenly expect a higher quality than he was contracted to deliver. Upfront communication can help prevent those issues before they start.
How do you clean up your closeout documents to make them more appealing for GCs?
- One sub advises you to continuously iterate and perfect your closeout process, from a presentation perspective and beyond. Making small tweaks to make everything look better will add up over time.
- A GC present at the Meetup mentioned a requirement that his firm actively imposes on subs, which may be beneficial for subs to adopt on their own. They request a daily update on the project from every sub in the form of a polished powerpoint with company logos. It’s shipped off at the end of their shift as an email update on how far along they got. The GC then shares that with the owner.
What technology do you use to support your closeout process?
- One attendee who worked on the GC side for 8 years endorsed Raken as a great way for subs to keep a bird’s eye view on their project. They can figure out what documents are missing, who they need to coordinate with, track time cards, materials, safety inspections, and put all that information into a professional-looking report to keep their project stakeholders in the loop. Raken was made for people who work in the field, rather than making subs adapt to a software that wasn’t built for their industry.
- Monday.com was another recommendation from one of our subs, who prefers it over some of the other project management software he’s tried.
- Another software tool that Hidalgo tried is called StructionSite, a tool that uses a 360-degree camera that ties to the project floorplan, so that you have an excellent record of the condition of your work. Especially as other trades come back and do their own punch lists, creating an opportunity for your work to be damaged.
What else do you do at the end of a project to strengthen GC relationships?
- One newer sub expressed uncertainty that she could just approach the GC with direct questions she had about the process, and that’s an important point to reinforce. Don’t be afraid to ask the GC clarifying questions about what they want from you. Guessing is much worse than just raising your hand and speaking up.
- One Bay Area GC shared that they sometimes use boilerplate request forms to get what they need from subs, and may even look to the sub for guidance on what closeout documentation they should provide. To that end, be willing to share your intel with the GC if they ask for it. This particular GC was getting in the habit of establishing what documents were needed at the beginning of the job, then incorporating those requirements into their project management software.
- Consider giving a gift to a GC or superintendents at the end of a job. One sub sent a bottle of bourbon to a few superintendents who unloaded materials on her team’s behalf, because they couldn’t get their crews there on time.
No matter what hiccups happen throughout the project, a closeout is your moment to finish strong. Be intentional, strategic and methodical in how you approach closeouts, and it will pay big dividends down the line.
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