Project Management View from Rail Transit Programs and Projects

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:

• American Institute of Architects (A201-2017):  @ Substantial Completion – a comprehensive list of items to be completed prior to final payment.
• Design Build Institute of America (535): @ Substantial Completion - (ii) the remaining items of work that have to be completed before final payment.  
• PMI PMBOK Construction: the work items that are identified during a final inspection that need to be completed.
• Construction Coverage (website):  is a document created in the final stages of a construction project to provide a list of items that must be addressed before construction is considered complete and payment is issued.
• Merriam-Webster (dictionary):  a list of usually minor tasks to be completed at the end of a project.

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:

1. Seller and Buyer's CM confirm to Buyer Project Manager work is substantially completed
2. Buyer's CM/Project Manager coordinates inspections by the Buyer's project team members and other stakeholders and creates a punchlist
3. Buyer's CM submits the punchlist for review and final edits by the project team and stakeholders
4. Buyer's Contracting Officer acknowledges substantial completion to Seller, submits the punchlist for Seller's corrective action by the construction completion date 
5. Seller and Buyer's CM confirm to Buyer's Project Manager all work is completed and achieved construction completion
6. Buyer's CM/Project Manager coordinates final inspections by the Buyer's project team members and other stakeholders to verify all items on the punchlist are completed
7. Buyer's Contracting Officer acknowledges construction completion and instructs Seller to demobilize and perform site restoration by the final completion/contract completion milestone.

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.

• In-Progress/Preliminary Punchlist:   List of remaining work and corrections prepared and submitted prior to the milestone for substantial completion, and it may contain items that are part of the base scope but not yet installed and tested.  This Punchlist is submitted as information, and it represents Buyer and Seller  in-progress inspection observations from multiple parties.   This Llist is monitored until substantial completion is achieved by the Seller.   
• Formal Punchlist:  List of remaining work and corrections is mutually prepared by the Buyer, Buyer’s construction manager, and Seller after substantial completion, which represents the work is ready for it intended use, all tests are completed and all work is operational.   This Punchlist is submitted for review and comments by Buyer.   Concurrently, Buyer will schedule a walkthrough inspection by the Buyer and all end user representatives to compile a complete punchlist.  This List with comments resolved will be the official list of remaining work.
• Final Punchlist:  List of items confirmed completed by the Seller and confirmed completed by Buyer or Buyer’s construction manager.  This Punchlist is submitted for Buyer Sign-Off along with a request by Seller  for final walkthrough.   The Buyer arranges for all parties to attend for sign-off that all items on the punchlist.    Sign-off of this Punchlist is the predecessor to Buyer’s acceptance of the Seller’s work, which is an interdependency of criteria for completing the contract closeout.   

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. 

Recently a colleague in a leadership position on a rail transit project said, they do not understand the importance of testing.    This came after a project meeting, where incorporating more activities for Commissioning Acceptance and Maintenance Plan (CAMP) into the Detailed Contract Schedule (DCS) was discussed.   At the meeting, the feedback from the contractor’s Project Controls leader indicated that activities for inspection, testing and CAMP deliverables should not be in the DCS.   

In a previously posted article regarding Best Practices for Commissioning Acceptance and Maintenance Plan (CAMP), the Commissioning component was described as:  

Commissioning:   This is the pre-requisite activities and deliverables for starting the CAMP package and deliverables for Acceptance, and it is the Buyer’s (Owner) process for verification of project/contract scope and the Seller’s (Contractor) compliance with requirements.    The activities typically include Factory Acceptance Testing (FAT), On-Site Acceptance Testing (SAT), In-progress Inspections, Start-Up and Burn-In.   Commissioning activities should be integrated into Project Control schedules and Quality Plans, which contain quality control inspection and test plans.

This article expands on the Commissioning element of the CAMP process and deliverables and it describes the importance on rail transit projects.   The project assets typically include track switches and machines, signal systems, traction power systems, signal power systems, communication systems and security systems.      

Commissioning-Inspection and Testing

Inspections and testing of the contract product and deliverables is essential for demonstrating the work meets the contract and is ready for final acceptance.   The inspection and testing requirements are defined by the Owner or its designated Designer of Record (DOR) in the contract documents and in project plans.

• Factory Acceptance Testing (FAT):   FAT is applied to high value, long lead, and critical assets that require extreme confidence that the asset will work when installed and interconnected to other products in the project to create an integrated system.    These type assets are usually supplied by specialty contractors to prime contractors for interconnecting all conduits and cables at the project site for operation.   The FAT is performed by the specialty contractors and it is usually witnessed by the prime contractor and other technical experts on the project.  FAT tests can range from several days to nearly a week or more depending on the complexity of test procedures and an action to correct problems.   FATs that require additional time may impact scheduled progress and require adjustments to interdependent activities in the DCS.
• On-Site Acceptance Testing (SAT):  SAT is the successor to FAT.  SAT replicates much of the FAT and focuses on added testing for verifying operation with interconnected conducts, cable and supervisory systems.   The SAT is performed by the prime contractor and it is usually witnessed by the specialty contractor and other technical experts on the project.   Specialty contractors often provide on-site technical assistance to the prime contractor.   Due to the amount of preparatory pre-testing, SAT tests are usually several days and may require an Owner to make operational changes to accommodate testing.   SATs that require additional time may impact scheduled progress and require adjustments to interdependent activities in the DCS.
• System Integration Testing (SIT):  SIT  is testing of several critical assets after the pre-requisite predecessor testing, including FAT and SAT.  SIT encompasses verifying asset operation within the overall rail transit system under conditions required to support its service plan, including train movement, passenger movement, customer information and announcements, safety and security monitoring, and central operating centers.   SITs that require additional time may impact scheduled progress and require adjustments to interdependent activities in the DCS.
• First Article Inspections (FAIs):   FAIs involve testing to prove out design and functionality of components before mass production.   FAIs are usually applied to projects with retrofit scope involving the installation of equipment fleet-wide or system-wide to meet legal, statutory or regulatory requirements.    FAIs are performed at the specialty contractors’ facilities and may be followed by prototype installations on Owner property.   FAIs will create schedule hold points in DCS before specialty contractors will be released for production and delivery of the component.
• Special Inspections (SIs):   SIs (and testing by independent testing agencies) are applied to project elements of construction such as steel, concrete, masonry, wood, soil, fire resistant materials, mastics, and smoke control, which bridges and buildings.   The SIs scope includes soil conditions, concrete rebar and formwork, concrete condition and strength, welding of structural members, bolting of structural members and fire proof insulation and coatings.   SIs will create schedule hold points in DCS for verifying test results meet requirements before work can proceed. 
• Inspection and Testing Plans (ITP):   The ITP complements the SIs and covers the full scope of the project as described in the contract drawings and specifications.      ITP consists of the more routine inspections and tests that are part of the project Quality Management Program, which includes the Construction Quality Plan for overseeing the contractor’s workmanship, quality of materials, and compliance with contract drawings and specifications.   ITPs may create hold points in DCS for substantial completion and construction completion milestones, and to CAMP processes and deliverables until non-conformances are repaired, corrected or accepted under conditions by Owner or DOR.

With exception of ITPs, all of the inspections and tests require integration with interdependent construction activities to determine baseline dates.  As construction progress is updated in the DCS, changes in dates for inspections and testing may occur.

Best Practices - Commissioning

• Projects must have a Project Management Plan covering construction monitoring and quality management with descriptions of scope, personnel, processes, and deliverables (sample Forms).
• Contractor must have written procedures and deliverables for inspection and testing activities, and a process for monitoring performance and periodically updating plans to reflect scope changes and adjustments due to DCS.  
• Owner must have a written plan to support contractor inspection and testing plans and with processes for monitoring Commissioning performance and implementing project and contract improvements.  
• Owner’s project manager, with appropriate support staff, must focus on oversight of the contractor/subcontractors and provide direction to reinforce effective and integrated Quality processes across managerial silos.
• Owner’s project representatives, or designated consultants, must be very familiar with the Organization and the responsible parties for obtaining and documenting technical feedback on the various inspections and testing for project elements.
• Owner’s processes for travel arrangements must be flexible and responsive to changes in FAT and SAT dates.  This may be accomplished by implementing advance approvals for baseline dates that contain provisions to change dates without resubmitting arrangements. 

TIP:   Requirements for Project Management Plans can be found at several resources including www.transit.dot.gov [Federal Transit Administration] and www.PMI.org [Project Management Institute.]

TIP:    On large projects, FATs, SATs and FAIs need to be coordinated to avoid conflicts and to assure personnel and travel arrangements can be available for inspection and testing dates.

TIP:   FATs and SATs require advance review and approvals of the scope and procedures.  At least 60 days notice/submittal reviews prior to the anticipated dates should be shown on the DCS.

TIP:    For project work on system expansions, most of the SIT can be done while maintaining operations on other parts of the system. 

TIP:   For project work that is performed on an operating system, the SIT will need detailed staging and require an Owner to make operational changes to accommodate testing.