What is a Punchlist and how to manage it?
The punchlist, on a construction project, is a list of items that are either incomplete, or have not been started. These items, are part of the original scope, together with additional scope items that have been added to the contract by formal change orders. In most cases, the punchlist is generated after the temporary certificate of occupancy has been granted and the owner has moved in. In some instances, if the owner is astute and knowledgeable regarding the construction industry, the owner will either develop a punchlist themselves, or have their architect or construction consultant provide a list of punchlist items, even prior to the actual move in date. This timing technique is in hopes of punchlist completion or at least partial punchlist completion, prior to the occupancy of the project.
When is the best time to develop the punchlist?
Each construction project varies, however the proper timing of the creation of the punchlist, is important to its successful completion. If the punchlist is developed too soon, it will become a list of work that still remains to be done and not a list of work that was either missed, or is incomplete. Too early in the project’s completion, and the punchlist becomes a formality that is quickly forgotten by the knowledge that the contract work is simply not completed. If the punchlist is performed to late in the project completion, manpower has left the project, finishes are extremely vulnerable to damage, and the ability to perform substantial work around completed items becomes more complex. Punchlist development should be timed and executed by an entity knowledgeable of the construction industry and it habits and nuances.
The best timing for the development of the punchlist, in my estimation, is to develop the initial punchlist at, or about, the 80% completion point. The owner, or their designated responsible party will review the required contractual scope of work against the actual field construction by walking the project and observing the completion status of all scope items.
The most productive method of punchlist development is as follows.
1.) Review the current contractual scope of work as described by the contract and associated change orders. Become familiar with the requirements of the contract as well as the status of the jobsite.
2.) Identify a method of describing the areas on the project that contain punchlist items. This can occur by room number or description, elevation ( east, west, north , south ) or even by names, such as the dining room, kitchen, etc. This will depend on the type of project that the punchlist is being developed for. The kitchen can be broken down into the four walls, or the cabinets, counters and remaining finishes. There are several different methods to describe location on a project.
3.) Identify a method to organize the work remaining. In most cases, this can be done on a simple excel spreadsheet, that can be sorted as needed. The sort should include the trade that the work is associated with, as well as the location of the work. In this manner, the responsible parties can summarize their work easily.
4.) Always identify the date of the punchlist. There will be multiple dates for punchlist updates that will eventually accumulate into the last and final punchlist.
5.) Establish columns for the status of the punchlist items, as well as a column for comments. In this manner, the item can be clearly evaluated as 50% complete and it is clear what remains to complete to 100%.
6.) In many cases, the actual entity that is being described on the punchlist can be located and identified with a sticky label attached to the surface. Some more detailed and sophisticated methods ,acquaint the color of the sticky label with the type of punchlist work such as painting, chipped tiles, etc.
7.) If there is a general contractor, or construction manager on the project, the punchlist is given to either entity. If there are multiple contractors or subcontractors, then each contractor will need to be provided a copy of the punchlist as well as the associated updates.
What should the status of the project be, to most efficiently develop the punchlist?
In my opinion, the punchlist should be developed while the majority of the contractors still remain on the project. The punchlist should not be done when there are too many contractual scopes of work still to be completed. Too early a development of the punchlist will create a list that will simply cause a negative reaction from the contractors. The intent of the punchlist is to easily manage remaining contractual requirements, and not to provide a listing of the incomplete contractual scopes of work. Developing the punchlist too early will cause the contractor to minimize the proper attention required to properly manage the list. Developing the punchlist too late in the construction process, will not allow ample time to complete the work. In addition to time available, the development of the punchlist too late in the project will not allow the contractor to complete the punchlist items while their manpower is on the project. The completion of the punchlist will require the contractor to remobilize their manpower, equipment and material. This will cause further delays in punchlist completion due to time needed to remobilize on the project.
Typical punchlist issues;
1.) The punchlist will be properly completed by some contractors and others will simply ignore the punchlist. There will be a variant between the management of the punchlist by each contractor. Some contractors just hope it goes away, while others will take the pro-active position and try to get it done as soon as possible.
2.) The punchlist will grow with different items, as the contractors attempt to complete the initial punchlist. For example as the ceilings are being completed, the walls become damaged, or the opposite occurs. The punchlist will have an initial tendency to grow as contractors attempt to finish their work without due respect of the work of other contractors.
3.) When finishes are involved with the punchlist, the actual performance of work activities to complete punchlist items, will cause dirt and damage to occur on other completed items.
4.) Punchlist completion in many instances, becomes a rotating game of who was performing the work last. In addition the moving in process in many cases adds problems and issues to the completion of the punchlist.
5.) There will be a time in the process, when the owner and the contractors, must agree to balance the punchlist work, to find an end to the process. If both parties attempt to resolve the completion of the punchlist in an honorable and respectable manner, then the punchlist will serve as a viable tool to proper and complete project completion. If the opposite occurs, disrespect for the work of others even sabotage of others work, then the punchlist becomes a problem unto itself.
6.) The owner must retain enough money from all the contractors, to ensure punchlist completion. This retainage of money due to incomplete punchlist items, must be balanced to ensure that the contractor remains focused on completing the punchlist, and not focused on the quantity of money being held up. However, on the other hand, the amount of money must be ample to coerce the contractor into completing the work. This is a delicate balance. How much money is too much or not enough are difficult decisions to make and requires both experience and knowledge or the workforce on the project.
Once the punchlist is completed and issued to all contractors, now what?
Punchlist management is key to the success of punchlist completion. The contractor must be assured that the management is accurate and honest. Once an item is completed, the owner or designated representative, must identify this completion to the contractor, and take the scope item off the punchlist. One of the most discouraging issues of punchlist management by an inexperienced owner or architect,is the growing list of items that will continue to be added to the punchlist. There are occurrences when the punchlist can legitimately grow, however all parties must be cognizant of the fact that the goal is to reduce and eventually eliminate the punchlist, not keep it growing and festering for months and even years.
There are several owners and architects that never allow the punchlist to dissipate and reach the completion stage. It almost becomes a crutch for the owner to retain the services of the contractors on a never ending cycle. If the punchlist is never completed, the owner still retains control of the contractors and justifies the withholding of their money.
My method for eliminating the never ending punchlist, is as follows’
1.) Create the punchlist ,by identifying clearly the scope of work both contractually and with the addition of formal change orders. Create the punchlist with honesty and integrity.
2.) Walk the entire project and identify each specific item that is lacking or incomplete.
3.) Identify these items by trade ( contractor ), description and location on the project.
4.) Monitor the activities generated for each item, as the contractor tries to fulfill the punchlist.
5.) Re-issue the punchlist to all parties a second time with the progress performed for each item.
6.) A two week period, from the initial distribution to an initial overall evaluation is normally proper. The size and complexity of the project could determine a longer period of time. The time should never be less than two weeks.
7.) Once the punchlist is reissued to all parties and updated, another period of two weeks should be allowed.
8.) Another overall evaluation should then be performed by the owner or designated party, and all completed items removed from the list.
9.) A notice to all contractors should accompany the third submission of the updated punchlist, allowing another two weeks for completion. This third submission should include a formal note that indicates, failure to properly complete this punchlist, will generate a substantial backcharge to the contractor, for work not performed or incomplete. The value of the backcharge to be at the discretion of the owner.
10.) A fourth review and evaluation of the final list is made, failures to satisfactorily complete the punchlist items will result in a backcharge to the individual contractors as necessary. The backcharge should include a detailed description of the charge and how the value of the backcharge was developed.
11.) Final payment to all contractors, should then be made, inclusive of the final backcharges based upon the lack of completed work, as noted by the punchlist management system.
The owner or designated party, responsible for the punchlist, must demonstrate a fair and honest management system for the punchlist completion. However, once the management system is carried out and the contractors are given the opportunity to complete the punchlist, the end of the road is the final backcharges against the retainage money, still held by the owner.
The punchlist should not drag on for over the three month period described within this discussion. The end of the list, and the end of the opportunity to complete the outstanding items, is identified by the final backcharges levied on the contractor by the owner.
A punchlist is not a method of retaining contractors forever, and it is not a method of eliminating the responsibility of the contractor to complete the work. Through proper, honest and systemetic management of the punchlist, the tool will offer the ability to complete the project, as well as provide a means for the owner to balance out the payments to contractors, if the work is not completed.
The punchlist is a very powerful method of completing a project to the satisfaction of both the owner and the contractors. The proper management of this tool is also important to the success of final completion. Soft cost items can also be included in the final punchlist.
Soft cost items that could be included in the final punchlist;
1.) Warranty and guarantees
2.) As – built documents
3.) Operation manuals
4.) A-2 Survey requirements
5.) Final Certificate of Occupancy documents
6.) Final lien waivers and payment documentation
7.) Final specific maintenance procedures and methods for equipment and systems.
Basically, anything that the owner has specified within the contract as a responsibility by the contractor, material or equipment suppliers or subcontractors can be included within the projects punchlist.
Use the power of the punchlist to its fullest extent. The proper management of the punchlist can manage to facilitate a successful completion, to a difficult construction project.