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Hey folks, Phil Zito here and welcome back. In this post, we are going to be covering how to close out your projects. So up to this point, we've kicked off our projects, we've executed them, we've done the programming, the graphics, the install, we've dealt with the commissioning agents, we dealt with test and balance, and we are coming up to that point where we need to finish up our project.  

Now, this is the second most likely phase at the end of a project to kill the profitability of your project. Now there's plenty of parts within a project that can kill the profitability up front, we've discussed those: not having a release to operations from sales, not doing proper submittals, not lining out your subs, those are the big three. But when it comes to closing out your project, there are really two main areas that you need to focus in on: 

  1. Getting proper as-builts, proper red lines, and making sure that the owner understands how to utilize the building. That's the closeout process, in a nutshell.  
  2. The warranty phase. Not having clear boundaries on your warranty phase, not understanding how to manage the warranty phase, that can also kill your project’s profitability.  


So, back to closing out the project. We have these things called as-builts, and they are exactly what they sound like. They are as-builts, how the project is built, how the project is presented, how the submittal documents exist, as the project is built. So how do you create as-builts? How do you get these things that are needed to close out the project? We'll get to that in just a second.  


But before we do, let's cover a couple more things. So, in order to do a proper close out, you need to have an O&M manual. O&M manuals are Operations and Maintenance manuals, and these O&M manuals enable you to operate and maintain the building. So the O&M manuals are going to have as-builts, point to point checkout sheets, the functional test sheets, catalog sheets that can have the as-built submittal set, and they are going to have instructions on how to use the software, etc.  


That is what we really want to build out in our closeout phase. But this is the big thing people miss. I've been guilty of it so many times, this autopilot mode, where they’ve done so many of these, they know exactly what to do, they don't read the specifications, they don't go to Section Three and Section One of the specification to read the close out expectations, and then they don't get their retainage.  


Retainage is a portion of your payout for the project that is held until you execute the project. Think of it as a reverse escrow. So, they hold that money until you've fulfilled the contractual expectations and then you get it. Now here's the thing that can be fairly large on a large project, on small projects not such a big deal, but on large projects, definitely a big deal. We really want to capture that money, and we also want to leave a good impression with the owner because the owner who built the project, who worked on the project, most likely is not the same owner-operator who's going to maintain it.  


This owner-operator probably has no idea who you are, and maybe that owner-operator is used to Siemens or Johnson or Tridium. Maybe you're a completely different manufacturer. Guess what? They just got your system handed to them, and they're like, “I hate that system.” This is not because they hate you or hate your system, but because they don't know your system.  


So, the experience you create from the closeout phase on is going to dictate your warranty phase and your callbacks. That's going to dictate any potential future service work. It is critical that you understand that because, if you want to get off the project, and you don't want to be called back because someone can't figure out how to change the temperature or why this light is blinking, etc, and then having to go to the contractor and dispute that as a warranty charge.  


Then listen up! Getting the project closeout done right, getting owner training done right, getting owner operation and maintenance documents done right, is going to ensure that you deliver an experience to this facility operator, who may not know you, that they can now say, “Okay, you know what, I like these guys or gals. I like these folks, and they're delivering a good experience, and I'm not going to bug them during warranty.”  


So that's one really important point I want to make out to you. The other is, if you don't follow the specification, and you don't follow that Part One General and Part Three Execution of the specification, at least here in the States, CSI Spec MasterFormat. If you don't follow that, then you can be held contractually liable for the deviations from that requirement. Then, next thing you know, you're getting told everything's your fault.  


I have seen people spin some like crazy stories because my close out documents didn't match up. So, for example, one was an undersized boiler, and my documents did not match up the as-built layout of the hot water plant. Granted, it was the piping, and I have no control over piping, I'm in building automation, but I didn't have that. So, guess who had to join every meeting on the sizing of the boiler because their as-builts didn't properly represent the piping layout? It had nothing to do with controls, nothing, there was nothing my control system could do to make more heat come out of this boiler. But because my as-builts did not properly represent the piping changes that were made by the mechanical, guess who was getting calls to the Regional General Manager by a mechanical that we do business with all the time? And that mechanical was saying, “Well, if you want future work, then you better have someone out here to represent us.” So, I would sit there on my phone every week while this meeting was going on, because there was nothing that I could have done and that was an hour of my time that was not built into the project.  


Now granted, that was my fault. I should have updated the as-builts, should’ve updated the red lines, but I didn't think I needed to change the piping. I didn't even think about the piping. I didn't even sit there and think to myself, “I should go check the piping and make sure it still matches up what I copied from the MEP set. But that's what happened. I didn't copy the new MEP set as-built plumbing diagram, and because of that, I got stuck on a jobsite.  


Let's now go into what the closeout process looks like, what the closeout documentation looks like. First things first, we need to collect all of the documents that are required from Section One General and Section Three Execution. We need to collect those and we need to package them into an O&M manual.  


Once we start collecting the documents, we need to collect what are called red lines and red lines are where you take a red pen, and you mark up the drawings to accurately represent as-built conditions. This is where you will mark up your controller drawings, your network riser, your sequence of operations, anything that is changed, you will mark up. Now red line coordination is an often overlooked, but very important, topic that is not discussed near enough.  

So, redline coordination is where you, as the submittal person who's building these as-builts and O&M set, need to go to your electrical, need to go to your tech, and your programmer, whoever is going to be changing something, and you need to get them all on the same page. That is why I like to have a master submittal set on job that usually sits in the job box for the electrical. I will have everyone update their red lines to the master document set. That way, we have one single source of truth that represents our as-built conditions.  


Then at the end of the project, I will take all of that information, I'll bring it back, I will update, I will look at my actual ordered bill of materials, not my submitted bill of materials, but my ordered bill of materials, and I will build out my catalog sheets. I'll make sure I have the proper catalog sheets. I will make sure that I have my documentation for my functional tests, and for my point to point, and I will make sure I have any other prerequisite information that is required, like owner training, access to the software, etc. I will get all of that buttoned up.  


Then and only then, will I create my own end package. I will submit my own end package for final project closeout. But there's another biggie that a lot of people miss here, and I've seen it at large OEMs all the way down to one-man shops.  


Make backups!


Please, please, please, make backups. Go on site and make a database backup, make graphics backups, make programming backups, make copies of your O&M set, all of that information. You need to have backups and stored in to at least two locations. So, if you're going to store it on your local computer, then have it in a cloud backup, have it somewhere that you can access later.  


There is nothing worse than, you install a system, a facility owner takes over, they have a guy or gal who's semi-functional on the building automation system, they get in there, start tweaking set points.  Maybe you mistakenly left the test and balance page still installed on your building automation system, and now guess what? They're in, they're changing min and max CFM flows, and you don't have those documented.  


Once again, any set points, any settings, get them documented. Have backups, have backups of your backups, because it is a lot a lot easier to restore the install state than it is to go and troubleshoot the customized owner state.  

Let me repeat that just so we're clear: It is a lot easier to go and restore the installed state, than to troubleshoot and repair the customized and user state. 


At the end of the day, that is what you're going to be called out there to do. They're going to change settings, they're going to change set points, and you're going to have to fix it. So, I want to make sure that we are crystal clear on that so that there are no issues with you getting callbacks for those reasons.  


Okay, with that being said, I want you to pay attention to the owner training. We're not going to cover this now, but we will in the next post. I meet a lot of people who think that the less the owner knows, the better. I will tell you from experience, the more the owner knows, the better, to a point. Having an informed, uneducated owner is going to cause problems, especially if they have access to the system. Even worse than that, having educated owners that are educated on the wrong things, without having the clear underlying knowledge to understand what you're educating them on, is going to be an even worse problem.  

So, proper education and proper instruction of the owners is critical. That is something that we'll discuss in the next episode.  


Additionally, warranty phase, we really want to get tight on our warranty phase processes. We want to have a warranty log. We want to understand exactly what is contractually expected of us during warranty. How are warranty calls escalated? What time period are we expected to respond? How do we dispute a warranty call? What are our bill back or chargeback options?  

We want to understand all of that. Now we'll talk about that in one of our upcoming posts as well.  


Okay, so there you have it, closing out a project. I hope you all really paid attention to this. I really know, if you pay attention to what I just taught in this post, you will close out your projects more reliably. You will make more profit on your projects, and you will have less slippage, less warranty call issues, and just in general, you will have a happier life. 
I look forward to hearing your thoughts on this. Thanks a ton, and take care! 

Phil Zito

Written by Phil Zito

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