Punch list” is pair of words that consistently evokes fear into the hearts of the contracting world. Just the thought of the task has a remedial and punitive feel to it, walking room to room or phase to phase, judging and evaluating erroneous and incomplete items at the conclusion of an arduous project.
Additionally, there is a compounding effect to consider, involving others who play a part in generating the initial punch-list. For instance, a customer or designer at the beginning of the process finds one item in the first location, and, from that point forward, increases scrutiny as the inspection continues. Suffice it to say, contractors have long examined strategies to eliminate problems tied to the dreaded punch-list and close-out processes.
One of the more common tactics gaining traction is the “punch as you go” approach. Easy enough, right? Simply don’t leave incomplete items at the end of the workday, and always work with diligence and discipline.
This approach, used by operationally superior organizations, tackles punch-list management from a proactive position, therefore never requiring its teams to
play defense.
Another common close-out strategy is to develop a designated taskforce or special weapons and tactics (SWAT) team that is tasked solely with handling all things close-out. For example, as a project enters the final 10% of completion, the original project team leaves the project — likely to begin a new project — and the SWAT team, special projects team, or equally intimidating and cool team name, steps in to commence work on the deficiencies, close-out documents, as-built drawings, commissioning, operations and maintenance manuals, etc. On the surface, this approach seems to have merit.
What better way to improve getting work done than to have a team whose primary function is to get work done? There are a few compelling arguments against such an option.
A Monument to Inefficiency
The rationale behind having dedicated specialists is not bad. Punch lists aside, this group can be tasked with ensuring close-out becomes an enjoyable and expeditious process for the client.
However, some items that typically occur toward the end of a project, such as painting, landscaping, commissioning, etc., are in the final stages of the original project team’s scope. If you invite specialists in at the last hour, what was once a clean line of strategy — i.e., substantial completion — now becomes blurred. To think, “Well, that wall isn’t painted yet. But we have the SWAT team coming in, so they can take care of it,” is precisely the problem. The SWAT team quickly becomes a dumping ground for tasks others may not want to complete. And who wants that job?
Theoretically, this team would be viewed more like a “closer” in baseball, who is brought into the game amid tough circumstances, to help by making the save in the ninth inning. However, in our scenario, the closer team gets to pick up the pieces of a 12-run deficit and also get credited with the loss.
A New Cost Center
Close-out has a cost. Some contractors categorize these costs as a line item on the estimate, schedule of values, cost report, and even schedule. However, in the desire to eliminate extraneous costs, a new cost center has been created. Congratulations.
Consider a general contractor who leverages their work across a collection of trades, operating under a largely variable cost model. Now, the business has either a new overhead expense or a direct labor expense that is only effective when there are projects in the queue. What is it that this operational unit does for the remainder of the year? Will they have projects to complete 52 weeks a year? Furthermore, what is the return on investment for a group such as this?
Who’s on the Team?
Who wouldn’t want to earn a spot on the SWAT team and be considered the king or queen of close-out? While the name has all the cachet of an elite group of constructors, the imagery already provided here is that of a losing proposition, a role that simply becomes a catch-all for all of the work no one wants to do. Staffing this group would be hard work — it’d be a tough sell convincing A-players they should want to lead a project’s leftovers.
Conversely, the closers have an immense responsibility in that they are being trusted with the most important part of the project in the customer’s eyes. Does it make sense to have a D-team player serving as the primary brand liaison at such a critical crossroad?
Unrealized Opportunity
Opportunity costs exist in everything we do as a business. It’s common for every business owner sometimes looks back to wonder, “We could have done this and made X profit, or done this and made Y profit.” Decision-making is part of what leaders are required to do, and trade-offs must be made every day.
If the SWAT team were leveraged properly, there is a possibility for success. Perhaps in conjunction with a “small projects group” used to handle customer needs that arise either at the end of a project or to tackle one-off low revenue/high margin projects, like those of a service contractor, a SWAT team could become a de facto customer service group that bridges close-out and customer intimacy. As with any new endeavor, leadership would be well served to establish rules of engagement and define the real investment upside.
Swat’s Next?
The road to strategic improvement is often littered with good ideas that fail to launch. The SWAT team concept may be a great idea that simply requires great discipline and keener connections to the overarching mission of a particular firm. On the flipside, the SWAT concept could prove to complicate an already difficult problem. Nonetheless, your close-outs may never be without complications, so it’s important to note the true mark of success is work that is supported by strategy, delivers on quality, and exceeds expectations.
