What is a Punchlist?
| A punchlist is most common in the construction industry. But it may be an overused term on prime contracts between Buyers and Sellers - when a simple To-Do-List might be more appropriate description for a tool construction managers (CM) use to monitor contractor progress toward achieving contract milestones. Punchlist is not normally part of the definitions in the construction contract Form. As a result, Punchlist means different things to Sellers and Buyers. Definition From various sources of expertise, punchlist is described as:
Punchlist is interdependent with the progress of work by the Seller and the milestones specified by the Buyer in the Contract. The milestones are typically contained in the General Conditions/Provisions (GCs) of a contract document. Punchlist creation is associated with substantial completion and punchlist completion is associated with construction completion. Work Flow Punchlist work flow:
Most US standard contract Forms, cite the requirements for substantial completion and construction completion in the General Conditions/Provisions regarding section related to Performance Schedule and Payments. Punchlist Content The content of a punchlist should contain only minor touch-ups and repairs to installed/constructed work that is described by specific in-scope observations and the locations to be corrected for completion. A punchlist that contains base scope items not yet installed or tested and operational is not acceptable and not suitable for meeting the completion milestone. Items observed that are not in-scope will be deleted from the punchlist and be addressed by the Buyer through other project processes for changes to work. In addition to contract milestones and payments, an acceptable punchlist that the Buyer determines meets the substantial completion requirements is often tied to incentives and liquidated damages. Meeting substantial completion is also related to other contract requirements. Punchlist Interfaces Interfaces with other contract requirements in the work flow include: Item 4-After substantial completion, Seller and Buyer can initiate reconciliation of incentives and liquidated damages. Buyer can suspend consideration of all potential changes, instruct Seller to demobilize and to perform site restoration by the final completion/contract completion milestone, request Seller to submit deliverables such as O&M Manuals, As-Built Drawings Package and Warranties, and if applicable, release performance bonds. Item 5-After construction completion, Seller and Buyer can initiate the contract closeout. Item 7-After demobilization, Seller can reduce insurance coverage. TIP: A punchlist should only be submitted once by Seller and reviewed by Buyer for completeness an accuracy. Thereafter, it is locked down. No items can be addressed. Items can only be verified as completed and closed. TIP: All items on the punchlist should be addressed and closed by the Sellers within a period that avoids the risk of further damage or new conditions that requires corrective action. TIP: For Buyer’s, including their construction managers, that require in-progress punchlists to assess the contractor’s physical work relative to the construction substantial completion milestone, a more granular definition of punchlist may be needed. Here are some proposed definitions that can provide guidance to Buyer and Seller as the punchlist changes with the progress of construction.
TIP: An observation listed on the punchlist should identify the inspecting agency/inspector name and date, cite the specific location (s) and the drawing/specification/code, and describe the needed correction to meet with the contract requirements, approved shop drawings or other industry standards for the type of work. TIP: The punchlist observations should be actionable and the description begin with words such as repair, replace, adjust, touch-up, polish, remove, rebalance and clean. Items with words such as install, test, paint, fill, energize, backfill and connect may indicate that base scope is not yet completed. |
Know the Contract - Part 14, Contract Completion/Closeout
| This is the 14th in a series of discussions that is intended to prompt Project Teams to be aware of the entire contract document, including Information For Bidders (IFB), General Provisions/General Conditions/Terms and Conditions (GCs) and the Technical Requirements [Specifications and Drawings.] Part 14 of Know the Contract is Contract Completion/Closeout. Closeout is the successor to all other work performed under the Contract and it is final set of activities between the Buyer and Seller. While the requirements for Closeout may be scattered throughout the Contract document, the most important are described in the GC’s sections related to Schedule and Payments. At this phase of the Contract, the Buyer’s Contracting Officer is the primary arbiter for determining that all requirements are met by the Seller and confirmed by the Buyer’s Project Manager. Part 6-Schedule Performance and Part 7-Progress & Milestone Payments of this series describe the content in the typical contract Form. Satisfying these requirements precede completing the Closeout process and documentation, and includes substantiating completion of testing and start-up; training; delivering spare parts; submitting operation & maintenance manuals, software, as-built drawings, asset management data and warranty; and closure of all quality management processes and deliverables. Regardless of the contracting method, such as Design-Bid-Build, Design Build and CM At Risk, the Closeout of the contract is governed by the GCs as well as any Special Conditions and terms negotiated for contract award. The typical activities and topics include:
During the Closeout phase, the Buyer may develop Lessons Learned from the Seller’s performance on the Contract. The Lessons Learned will be utilized by the Buyer to consider changes in requirements as well as management processes and documentation on future Contracts. Some of the topics from Lessons Learned may include:
TIP: The responsible parties for Closeout are the Buyer’s Project Manager with support from the Buyer’s Contracting Officer and the Seller’s Project Manager with support from the Seller’s prime contracting/procurement official. TIP: While risking duplication of requirements, create a separate Division 1 specification covering the requirements and deliverables checklist for contract closeout. TIP: Most US contract Forms were written based on paper transactions throughout the Contract cycle. Due to awareness of threats outside normal contract and project processes, security of products, deliverables and documentation is now part of controlling access to sensitive contract records. As a result, EDMS has replaced paper documents and is used more effectively to segregate, store and restrict distribution of documents that contain sensitive information. TIP: The use of electronic document control system (EDMS) has become a critical part of managing and executing the work at a project and contract level. As a result, there may be a need to create requirements for content, format, compatibility and the transfer method of the Seller’s EDMS with the Buyer’s hardware, software and the organizational management of records. TIP: Ensure Closeout requirements and terminology are well defined and are consistent with the process and requirements in the GCs. Clarity of terms is essential for both the Buyer and Seller. TIP: Buyer’s Contracting Officer should provide clear guidance to the Buyer’s Project Manager on the process, timeline and documentation required to satisfy the contract closeout. |
Know the Contract - Part 14, Contract Completion/Closeout
| This is the 14th in a series of discussions that is intended to prompt Project Teams to be aware of the entire contract document, including Information For Bidders (IFB), General Provisions/General Conditions/Terms and Conditions (GCs) and the Technical Requirements [Specifications and Drawings.] Part 14 of Know the Contract is Contract Completion/Closeout. Closeout is the successor to all other work performed under the Contract and it is final set of activities between the Buyer and Seller. While the requirements for Closeout may be scattered throughout the Contract document, the most important are described in the GC’s sections related to Schedule and Payments. At this phase of the Contract, the Buyer’s Contracting Officer is the primary arbiter for determining that all requirements are met by the Seller and confirmed by the Buyer’s Project Manager. Part 6-Schedule Performance and Part 7-Progress & Milestone Payments of this series describe the content in the typical contract Form. Satisfying these requirements precede completing the Closeout process and documentation, and includes substantiating completion of testing and start-up; training; delivering spare parts; submitting operation & maintenance manuals, software, as-built drawings, asset management data and warranty; and closure of all quality management processes and deliverables. Regardless of the contracting method, such as Design-Bid-Build, Design Build and CM At Risk, the Closeout of the contract is governed by the GCs as well as any Special Conditions and terms negotiated for contract award. The typical activities and topics include:
During the Closeout phase, the Buyer may develop Lessons Learned from the Seller’s performance on the Contract. The Lessons Learned will be utilized by the Buyer to consider changes in requirements as well as management processes and documentation on future Contracts. Some of the topics from Lessons Learned may include:
TIP: The responsible parties for Closeout are the Buyer’s Project Manager with support from the Buyer’s Contracting Officer and the Seller’s Project Manager with support from the Seller’s prime contracting/procurement official. TIP: While risking duplication of requirements, create a separate Division 1 specification covering the requirements and deliverables checklist for contract closeout. TIP: Most US contract Forms were written based on paper transactions throughout the Contract cycle. Due to awareness of threats outside normal contract and project processes, security of products, deliverables and documentation is now part of controlling access to sensitive contract records. As a result, EDMS has replaced paper documents and is used more effectively to segregate, store and restrict distribution of documents that contain sensitive information. TIP: The use of electronic document control system (EDMS) has become a critical part of managing and executing the work at a project and contract level. As a result, there may be a need to create requirements for content, format, compatibility and the transfer method of the Seller’s EDMS with the Buyer’s hardware, software and the organizational management of records. TIP: Ensure Closeout requirements and terminology are well defined and are consistent with the process and requirements in the GCs. Clarity of terms is essential for both the Buyer and Seller. TIP: Buyer’s Contracting Officer should provide clear guidance to the Buyer’s Project Manager on the process, timeline and documentation required to satisfy the contract closeout. |
What are the Requirements for Seller “Turnover” of Contract Products to the Buyer?
| Unfortunately for more times than I can count, the term “turnover” [or "handover"] has become commonly used to describe a process for the Seller to transfer contract products to the Buyer. Unless “turnover’ is defined in the Contract or clarified via Request For Information, the term is subject to arbitrary interpretation by Buyer and Seller. In Contracts that are part of my rail transit project experience, “turnover” is not defined but it may be analogous to requirements for Substantial Completion (SC) and to Final Completion (FC). SC is the earliest date the Seller’s product meets its intended use by the Buyer. FC is latest date for the Seller meeting all requirements for Buyer’s final acceptance of the Seller’s work. Substantial Completion is a contractual milestone that consists Buyer acknowledging Seller completion of work minus punchlist (minor repairs and touch ups) and the completed work is suitable for intended use and operation by the Buyer. Seller’s deliverables for SC includes Buyer’s review and acceptance of reports on all test and inspections, punchlist, closure of permits, issuance of certificate for occupancy/code compliance, completed submittals, and on resolution of Quality - Non Conformance Reports and Observations. Final Completion is a contract milestone that consists of Buyer acknowledging Seller completion of all construction and all technical and contractual deliverables. Technical deliverables include Certificate of Construction Completion, Certificate of Construction Compliance, as-built drawings, O&M Manuals, warranty, training, software, spare parts, asset management. Contractual deliverables include final change orders, final payment, waiver of liens, confirmation of all payments for vendors and subcontractors, and reports on certified payroll and other reports for use of disadvantages and small businesses. While not associated with “turnover”, Construction Completion is a contract milestone that consists of Buyer acknowledging Seller completion of the punchlist. This also includes directing the Seller to submit its invoice request for final payment on the balance of the 100% EVM in the payment schedule previously approved by the Buyer. TIP: Project participants need to use only terms that are clearly defined in the Contract, and diligently avoid creating ambiguity by introducing terms outside of the Contract. TIP: Contract milestones dates, definitions and processes for Notice by Seller to Buyer on completing the work to meet the milestone are described in Provisions Related to Time. TIP: Contract payment definitions, deliverables and processes for Request by Seller to Buyer for payments are described in Provisions Related to Payments. TIP: Requirements for technical deliverables are described in specifications that make up the technical portion of the Contract. TIP: Requirements for deliverables content, format and timeframes for Seller’s submission and Buyer’s review are described in the Division 1 [general] specifications. TIP: The Buyer’s Project Management Plan may be useful in establishing the activities, sequencing and timeframes for coordinating Seller’s delivery of spare parts and software. |
Do You Know the Entire Contract – Part 13
| Critical Components in General Conditions - Definitions Originally posted in 2017, https://www.projectmanagement.com/blog-post/48070/Part-12-----Do-You-Know-the-Entire-Contract, Parts 1 -12 were tailored for Project Managers to know the various parts of a contract between a Buyer and Seller. The information could be applied to contracts for purchased materials and furnished products. At the time, the articles were focused on topics that were essential for Project Managers to contribute and take a lead role in developing the Contract, and to be best prepared for the post-award execution. The previous articles covered:
The Contract is the baseline for Buyers and Sellers to define, execute, manage, and closeout the work as part of a project. No matter how much effort and time the Buyer uses to create the Contract, it will never be perfect and there will be times when the Buyer and Seller will have questions and uncover conflicts or ambiguity that will need to be resolved fairly. As a result, the Contract normally includes a section in the General Conditions for Interpretation. Among other items, this requirement indicates that when a conflict is discovered the more stringent shall apply, and as needed, the Seller shall notify the Buyer in writing of the specifics within a fixed period of days from when the Seller becomes aware of the conflict. When clarity is required on contract requirements, there are several options available for bidders and Sellers with the Buyer. Pre-Bid/Proposal During the bid/proposal period, bidders are required to present to the Buyer any questions or requests for clarification on the Contract requirements. This includes identifying conflicts in the Contract Documents, which normally defer to the more stringent requirement. Following receipt of bidders’ questions, the Buyer will provide an answer and issue an Addendum to the Contract. The Addendum becomes part of the Contract and they are distributed to all bidders registered for picking up proposal packages. Post-Contract Award After the Contract is awarded to the Seller, all questions on conflicts in the requirements or on vague requirements will follow the Request For Information (RFI) process. The Buyer’s RFI process will be presented to the Seller as part of several topics on administration and execution at the Contract Kick-Off Meeting. The RFI process follows a Buyer’s specific format and content for asking questions and requesting clarifications. The duration for response will be established by the Buyer unless specific due date are identified by the Seller in the RFI. An often overlooked and under-developed is the General Conditions section for Definition. This is usually ignored because the presumption is, if its not in the Definitions is because the details are provide in detail in other sections of the Contract. However, this may not always be the situation. Critical Components in General Conditions - Definitions The first action when questions on requirements arise with the Contract is for Buyer and Seller to review the entire Contract including the Definitions. While this may not resolve the question, it may eliminate an unnecessary RFI. The Buyer’s response to the Seller’s RFIs become part of the Contract and they need to be managed, and as determined by the Buyer may result in changes to the Contract documents. The Seller may also follow within notice of potential change if the Buyer’s RFI response can be substantiated as extra work not originally mutually understood at award of the Contract. Some definitions are not in the Contract because they are assumed normal practice for executing contracts in a particular industry. As noted in Part 6, the typical contract milestones are Notice to Proceed, Substantial Completion and Contract Completion. For construction contracts, particularly in rail transit projects, the may be additional milestones and definitions needed to support the Buyer’s desired execution of the work. As a result, the following definitions and milestones should be considered:
TIP: Definitions apply to the entire contract. The content for terms and phrases in Definitions should not be repeated in other parts of the Contract. This will avoid creating conflicts from duplicate but differing language. TIP: Definitions are the primary source for information when there is ambiguity in other sections of the Contract.
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