Solving Closeout Inefficiency: The Mindset Shift AEC Needs 

Delphine Wilson| October 21, 2019

When nearing completion on a large construction project, general contractors tend to start allocating their administrative resources to the next project. Yet it’s precisely at this time—the end of a project—when one of the largest and most important administrative tasks begins: the closeout process.  

For this reason, and many others, closeouts are persistently inefficient across virtually all construction verticals.

To provide guidance on improving the state of closeouts, ARC hosted a webinar called “Under Pressure: Solving Closeout Inefficiencies,” which was sponsored by the CMAA and features actionable information for the AEC industry to start facilitating smarter closeouts. 

ARC’s presenters, David Trask, National Director of Facilities Solutions, and Nick Miller, National Director of Professional Services, shed light on a better way forward by explaining how and why the closeout process remains so inefficient despite its universally negative effect on all project stakeholders.

Why Construction Closeouts Go Sideways So Often

To kick off the webinar, audience members answered a simple poll question posed by Miller. He asked, “Do you currently have challenges with closeouts?”

Just four percent said no. The rest said they struggle with closeouts on some or all of their projects. This came as no surprise to either presenter, who then revealed the six primary reasons they’ve seen that cause closeouts to go off the rails which are as follows:

  • 90 percent of closeouts are still delivered in paper form. 

A paper-based closeout makes it difficult to maintain a single, updated version of the closeout deliverable. Also, because the paper is often mixed in with digital versions of information, normalizing the data becomes especially labor intensive.

  • Gathering information from subcontractors is difficult.

When subcontractors are allowed to submit their closeout documents however they like, the general contractor is forced to manage content in a variety of different formats. Compiling this information is time-consuming and the risk for errors and omissions is high.

  • Information is located in multiple locations and formats.

Even when information is digitized, tracking and organizing documents and files stored in multiple locations and formats remains highly labor-intensive. In other words, digitizing information is little help to the closeout process if it’s not done in an organized way.

  • File names and types are not consistent.

With the incredible volume of files that flow between project team members throughout the life of a project, failing to establish consistent file names and types creates an unnecessary administrative burden during the closeout process.

  • Documents get lost.

The closeout process should begin well before construction is finished, with project team members updating a central repository as they go along. What usually happens, though, is that GC’s are left scrambling to find and compile missing documentation at the end of a project.

  • Incomplete packages are provided.

With misplaced documents, improperly named files, paper-based deliverables, and siloed information—despite the GC’s best efforts—closeout packages are delivered incomplete.  

 

The Far-Reaching Negative Effects of the Current Closeout Process

Though the general contractor tends to feel the most pain during the closeout process, he or she is not the only one who suffers. Virtually every project stakeholder, including subcontractors, owners, and facilities managers face the negative effects of inefficient closeouts. 

Take the renovation of an existing building for example. When it’s time to renovate, because closeout packages are often incomplete, facilities managers can’t find current as-builts that they can hand over with confidence to the renovation design team. 

Trask illustrated the severity of this issue by highlighting the significant cost of reworks and change orders that result when a construction team starts renovation work based on a design derived from inaccurate building documentation. 

 

The Path to Smarter Construction Closeouts

Having diagnosed and improved inefficient closeout processes for a variety of construction teams across the country, Miller and Trask have found that every team should ask themselves five key questions. This, they explain, helps put the closeout problem into perspective, revealing significant issues and solutions that inform the improvement strategy moving forward.

Those five questions are:

  1. What is written into your specifications as your deliverable?
  2. How do you store your closeout documents?
  3. Can you quickly locate information in the closeout packages you deliver to the owner?
  4. Do you know when warranties are going to expire on buildings you previously built?
  5. Do you have a closeout standard that you require your subcontractors to meet?

Once those questions are explored and answered in detail, project teams will begin to, as Trask said, “Shift their mindset.” Still, that mindset shift is just the beginning.

To continue building towards a more efficient closeout process and secure buy-in, each project stakeholder must understand the benefits of an improved process. Miller and Trask emphasized the importance of tailoring the communication of specific benefits to each stakeholder including the owner, design team, and subcontractors.

This communication strategy, along with an easy-to-use, digital solution helps get everyone collaborating and on the same page so it becomes possible to standardize the closeout deliverable.

To conclude the presentation, Trask showed an example of what an organized digital closeout deliverable should look like. He explained how certain features—ease of use, cloud-based storage, and mobility—help facilitate the shift in mindset needed among all project stakeholders to start driving more efficient closeouts.