Finishing Strong vs. Finishing Wrong: Tips & Traps for Project Completion

In construction, substantial and final project completion carry many potential pitfalls for the owner, contractors, and design professionals.  Most parties are understandably concerned with getting the project completed on time, and work may be progressing out of sequence or on an accelerated schedule to accomplish this feat.  The parties also tend to be concerned about final payment, punch list work, and lien deadlines (or claims thereof), which often create conflict on what may have otherwise been a mutually beneficial project to that point.  If you’re nearing project completion on any construction job, big or small, think through the following traps and tips to ensure you’re conducting the proper due diligence and to hopefully protect yourself against risks going forward.

1. The Trap:  Accelerated work schedules can lead to inadvertently covering up incomplete or defective work.  The Tip:  If you must increase the speed of the work, increase supervision by using a construction manager or third-party inspector to monitor the work.  Also, consider photographing and/or videotaping the last stage of the job to compile a record of your work (if you’re the contractor or a subcontractor) or of the overall project (if you’re the owner).
2. The Trap:  Final inspections are incomplete or avoided altogether.  The Tip:  Definitely perform a final inspection and partner with the owner, architect, engineers, prime contractor, and major subcontractors to check completed work against the final versions of the design documents and to document in writing via trackable communications (letter/email) items for correction and cross them off when complete.
3. The Trap:  Specialized inspections are not conducted, leaving a building’s critical components and systems unchecked.  The Tip:  Consider commissioning focused inspections by third-party specialists, such as for the building envelope, any LEED performance specifications, and compliance with the Americans with Disabilities Act. 
4. The Trap:  Early release of retention contrary to the provisions of the project contract documents.  The Tip:  The purpose of retention is to ensure project completion and should be used for such.  However, if certain percentages of retention are to be released during construction, tie that release to critical milestones that, when met, ensure the success of the job and acknowledgement of no additional claims for work performed through that milestone date. 
5. The Trap:  Lien waivers and releases are not routinely collected.  The Tip:  Establish and follow a procedure for collection and submission of lien and claim waivers each pay period to ensure the contemporaneous acknowledgement of no unknown pending changes or additions.  This practice benefits everyone involved up and down the line.
6. The Trap:  Waiver of unknown (latent) claims upon final payment.  The Tip:  The project contract documents should spell out the procedure for closing out the project, including all documentation required of the various parties.  Whether you’re a contractor, design professional, or the owner, check any release document you’re asked to sign against your contract requirements, and if necessary, limit the scope of any release to just the scope and items of work that may be in dispute. 
7. The Trap:  Disputes over whether work is truly defective.  The Tip:  With time at a premium, most defective work disputes are pressured by the proverbial ticking of the clock.  Consider using a warranty bond or tolling agreement to preserve the status quo and afford the parties the time necessary to fully investigate and resolve any existing defective work claims at the time of project completion.  
8. The Trap:  Warranty periods, disclaimers, and the statutes of limitation and repose.  The Tip:  Owners should carefully read all warranty disclaimers and calendar out the expiration of any warranty periods and applicable statutory periods for claims.  Consider securing extended product warranties where applicable.  Schedule and conduct one-, two-, six-, and 10-year reviews of the building and its critical systems for any latent deficiencies. 
9. The Trap:  Insurance tracking protocols are lacking or nonexistent.  The Tip:  Whether you’re the prime contractor, the design professional, or the owner, by the time of completion make sure you have complete copies of all insurance certificates and the policies that might afford you coverage in the case of a potential claim.  Use a tracking spreadsheet to summarize the policy providers, policy numbers, and limits of coverage.  Then, create a yearly reminder to update that tracking system with the renewed completed operations and tail coverage for the project.
10. The Trap:  The email nightmare that often happens near project completion. As project completion looms, representatives on all sides sometimes fire off ill-considered email messages, either trying to get the project done or complaining about the other parties.  The Tip:  Remind all your employees that email messages live on in perpetuity, and if there’s a dispute, the emails can be subject to discovery by opposing parties.  Never put in an email something you wouldn’t say in person to the recipient or the person about whom the email is written.  When in doubt, print a draft and get a second set of eyes on it before clicking “send.”

Complex construction projects carry complex problems as they approach completion, and whether you face those traps identified above or other issues, take time to think through these tips and others you might follow to avoid pitfalls.  The law of unintended consequences mandates that you’ll likely face problems, but with a little foresight you’ll be prepared for them when they arise.  

"Finishing Strong vs. Finishing Wrong: Tips & Traps for Project Completion" was originally published on March 20, 2015 in the Daily Journal of Commerce.