Construction Contract Closeout

Dickson Ma
Deputy Area Engineer
Fort Shafter Area Office
U.S. Army Corps of Engineers
5 May 2011

US Army Corps of Engineers

BUILDING STRONG®
 Agenda
 What is Contract Closeout
 Why is it Important
 Planning Ahead is Critical
 Requirements for Closeout
 Key Items for Successful Closeout
 Challenges Ahead

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Construction Contract Closeout
 What is contract closeout
► Final phase that ensures contract
requirements are met
 Why is it important
► Timelytransfer of projects to customer
► Enables contractors to focus resources on
new contracts
► Releases contractor’s bonding

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 Planning Ahead is Critical
 Last 20% of work is challenging and difficult
 Pieces need to fit together
 Can’t kick the can down the road anymore
 Requires teamwork and transparency
 Red Zone – Key to successful project
turnover

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 Requirements for Closeout
 Unified Facilities Guide Specifications
(UFGS) 017800, Closeout Submittals, May10
http://www.wbdg.org/ccb/DOD/UFGS/UFGS%2001%2078%2000.pdf

► Project Record Documents

► Spare Parts Data
► Preventive Maintenance
► Certification of EPA
designated items

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 Requirements for Closeout
 UFGS - 017800, Closeout Submittals, cont’d
► Warranty Management
► Mechanical Testing and Balancing
► Operation and Maintenance Manuals
► Cleanup
► Real Property Record

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 Requirements for Closeout
 Honolulu District updates to UFGS - 017800
(March 2009)
► New requirement for Electronic Submittals
• O&M Manuals
• Catalog cuts and parts list
• Diagrams
• O&M Training (video taped)

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 Requirements for Closeout
 MILCON Project Closeout – USACE
Enterprise Business Process (Oct 2007)
https://rfpwizard.cecer.army.mil/HTML/WaiverProcess/refs/MILCON_PC_E
BP_FINAL_V1%5B1%5D.0.0_20071107.pdf

► Policy implemented Corps wide

► Standardizes the overall process
► Utilizes the Red Zone Checklist
► Applies only to MILCON Projects

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 High Level Process Map
USACE Enterprise Business Process – MILCON Closeout

Pre-BOD Construction & Design (C&D) Post-BOD C & D Fiscal, Contract and Project Closeout Efforts

START END
(Scheduled BOD less Contracts Closed
75 Days, minimum, or Funds Returned
80% complete) Costs Transferred

Final*
Interim Fiscal Interim Complete Construction Real Property
Continue Contract Final* Final*
Review and Real Property Physical & CIP
Pre-BOD Closeout Fiscal Funds
Pre-BOD & CIP Construction Transfer, and
Construction (Final Review Return
Preparation Transfer (Post Actual BOD)
Disbursement)
Project
Closeout

Interim Complete A-E Contract

Funds Return AE Contract Closeout
(Final
or Request Requirements Disbursement)

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 Detailed Level Process Map
USACE Enterprise Business Process – MILCON Closeout
START *
Initiate Contractor
Scheduled BOD less 75 DD1354i Signed Evaluation (16)
Days, minimum, or 80% by User (13)
complete.
Construction
Initial Red Zone Interim CIP Final As-Builts LAST Mod signed
Contract Physically
Actual BOD (13) Provided to User (17) by ACO/KO (23)
Meeting (4) Transfer (15) Complete (24)

1 . 2 4 . 5 11 12 13 14 16
RE Prepares Address Issues RE Receives
Construction 20
PM and RE PM and RE Jointly RE Completes RPAO Signs Contractor
Construction Identified During RE Schedules Signed Interim Performance Erosion Control
Coordinate and Conduct Interim DD 1354 Interim DD 1354 DD 1354,
Issues and Draft Initial and Actual Beneficial Evaluation (Turf)
Schedule Initial Initial Red Zone and Provides to Prior to Receiving Requests RM
Interim DD 1354 Subsequent Red Occupancy Date
Red Zone Meeting Meeting RPAO/Owner Facility Access Process Interim
(Categories) Zone Meetings (BOD) CIP Transfer
17 21
3 6 7 9 Accept CADD
Ensure Punch List
24
15 As-builts
Complete – ACO 1.
Contractor Progress Pmts Final Project Yes
PM/PA Conducts Conducts Quality RE Conducts RE Conducts RM Processes Payroll on Contract A
Interim Fiscal Control Pre-Final Final Acceptance Interim CIP Complete
22 ?
Analysis; Prepares Completion Inspection Inspection Transfer in 18
Interim Cost Inspection CEFMS; Enters Complete No
Date in RMS Install Special Remaining Bid C
Equipment/Comm Items / Phasing or
INTERIM FISCAL REVIEW AND PRE-BOD PREPARATION Infrastructure Demolition
8
INTERIM REAL PROPERTY AND CIP TRANSFER Return Funds
19 23 (C) and Complete
RE Finalizes Remaining
Draft Interim Final
In-Season HVAC Projects
DD 1354 (Costs) Modifications
Testing and
Balancing

CONTINUE PRE-BOD CONSTRUCTION

COMPLETE PHYSICAL CONSTRUCTION

10 . 25 .
PA & RM-B
Process Funds 3. 4. RE, E&C or PM
A-E Yes Final Project Yes Performs AE
Return or
Additional Funds Involvement on Contract Contractor B
Request ? ? Evaluation

No No
INTERIM FUNDS 26 .
RETURN/REQUEST
SKIP AE Contract Complete
Closeout Remaining PM or E&C
Projects Reconcile AE
Contract

COMPLETE AE CONTRACT REQUIREMENTS

ACO Approves Final Pmt to

Final Construct Construction
Contract Pmt (30) Contractor (31)

* If the final contract of a multi-contract project has been completed, then Processes 41-45
27 29 30 31 32 33 are considered FINAL for the project. However, if the final contract of a multi-contract project
2.
RE Notifies Any Claims
No
ACO(RE) Receives FC Disburses has NOT been completed, then Processes 41-45 are considered INTERIM for the project.
Construction ACO Completes Transfer Records to
A Contractor to to Process Contractor ROC Docs; Final Payment
Contract Closeout
KO Closes Holding Area
Submit Release ? Processes ENG within 3 DAYS Construction
Prepares and 93; Authorizes Checklist; Prepares
of Claims (ROC) of ACO Contract
Signs ROC Docs Final Pmt DD 1593
Package Yes Signature
C
Final CIP Project Fiscally
Transfer (44) Complete (46)
28

KO Processes
Decisions and
41 42 . 43 44 46
Claims 6.
PA Prepares END
RM Processes Final Contract Yes
PM/PA Conducts DD 1354; Copies (1391 Requirements
CONSTRUCTION CONTRACT CLOSEOUT PM and RM-B CIP Transfer in of Project PM Closes
C Final Fiscal
Process Final PM, RE & RPAO;
CEFMS; Enters ? Project in P2
Complete)
Analysis; Prepares Requests CIP
Final Cost Funds Returm Date in RMS
Transfer No
KO Approves Final Final Pmt to
AE Contract Pmt (38) AE Contractor (39)
FINAL FISCAL REVIEW* FINAL FUNDS RETURN*
45
Complete
Remaining
RPAO is Notified Contracts
34 . 36 37 . 38 39 40 of Updated
5. Asset Cost
AE COR Notifies Any Claims No AE COR
B Contractor to to Process
AE Contractor
Prepares ENG
FC Disburses KO Closes
Prepares and KO Authorizes Final Payment AE Task Order Transfer Records to
Submit Release ? 93 and Contract FINAL REAL PROPERTY and CIP TRANSFER*
Signs ROC Final Payment within 3 DAYS or Contract Holding Area
of Claims (ROC) Closeout
Yes Documents of KO Signature (If appropriate)
Package Checklist & Docs
C

35

KO Processes GLOSSARY:
AE Decisions RE = Resident Engineer PM = Project Manager E&C = Engineering and Construction
and Claims CT = Contracting Office RM = Resource Management CIP = Construction In Progress
A-E CONTRACT CLOSEOUT
CQC = Contractor Quality Control AE = Architect-Engineer (Design Firm) Customer = ACSIM, MAJCOM, etc.
Owner = DPW / BCE, etc. Occupant/User = 25th ID, etc. RPAO = Real Property Accountable Officer
FC = Finance Center PA = Program Analyst (or Budget Analyst, or Mgmt Analyst) COR = Contracting Officer Representative
“ProcessMap5-5-2B.vsd” - Draft Version 5.5-2B – 9May07 ACO = Administrative Contracting Officer
FOR MILCON PROJECT CLOSEOUT LSS PDT USE ONLY Resident Engr Project Mgmt Engr & Construct. Resource Mgmt Contracting Other Milestone Customer Value Add

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Key Items for Successful Closeout
 CQC Completion Inspection and Punchlist
 Coordination of Comm Requirements
 Furniture Installation
 Testing and Balancing
 Commissioning
 O&M Manuals and Training

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Key Items for Successful Closeout
(continued)

 Warranty Management Plan

 Extended Warranty for Equipment/Mat’l
 Equipment Warranty Tags
 Hard Keys, Card Keys, and Constr Core
 Spare Materials

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Key Items for Successful Closeout
(continued)

 Cleared Submittal Register

 Contractor’s Performance Evaluation
 As-Builts
 Equipment List
 DD Form 1354, Transfer and Acceptance
of DoD Real Property

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 Challenges Ahead
 Building Information Modeling (BIM)
► Required in MILCON Business Process
► Applies to Design-Build, Adapt Build and
Standard Design projects
 Building Commissioning
 LEED Documentation

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Questions?

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