Practices for Closing Out Highway Projects from Substantial Completion to Final Payment (2021) / Chapter Skim
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25 Introduction This chapter presents the reported current practices by state DOTs from a national survey that collected information on project closeout for highway transportation construction projects, specifically: • The duration to closeout a project; • Construction and financial documentation needed for closing out a project; • Implications of not closing out projects on time; • The processes and tools used by DOTs for project closeout; and • Factors that delay project closeout. A web-based survey questionnaire, developed from the literature review, collected data on construction project closeout, focusing on the phase from completion of construction and acceptance of work to final payment, which incorporates closing out the construction and financial aspects of the project.
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State DOT Formal Project Closeout Process When Planning for Project Closeout Begins During Construction Yes No Before Mobilization 0-20% 21-40% 41-60% 61-80% 81-100% Alaska Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Louisiana Maine Michigan Minnesota Mississippi Montana Nebraska Nevada New Hampshire New Jersey North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Washington Wisconsin Wyoming Total Count 38 2 6 6 0 3 2 23 Frequency 95% 5% 15% 15% 0% 7.5% 5% 57.5% Table 9. State DOTs responding to the survey questionnaire.
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Current Practices in Closing Out Highway Construction Projects 27 Duration to Close Out a Project For the purpose of the survey questionnaire, project closeout duration was defined as the number of calendar days between substantial completion and financial closeout of a highway construction project. Each responding state DOT provided the goal set for the total duration that project closeout should take for highway construction projects.
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28 Practices for Closing Out Highway Projects from Substantial Completion to Final Payment Start and End of Project Closeout Duration State DOT Goal Project Closeout Duration (Calendar Days) Actual Project Closeout Duration Acceptance to Final Payment to Contractor Oklahoma 60 More than the goal California 90 More than the goal Illinois 90 More than the goal Iowa 90 More than the goal Kansas 90 More than the goal Louisiana 90 Same as the goal Montana 90 Less than the goal Washington 90 More than the goal Oregon 120 More than the goal Georgia 180 More than the goal Minnesota 180 More than the goal South Dakota 200 More than the goal Substantial Completion to Final Payment to Contractor Texas 150 More than the goal Ohio 180 Same as the goal Indiana 180 Less than the goal Utah 150 Less than the goal Acceptance to Financial Closeout Arkansas 270 More than the goal South Carolina 270 More than the goal Florida 275 Less than the goal Colorado 365 Less than the goal Nebraska 600 Less than the goal Substantial Completion to Financial Closeout Alaska 365 Less than the goal Maine 365 Same as the goal Nevada 365 More than the goal Pennsylvania 365 Less than the goal Wyoming 365 Less than the goal Vermont 380 More than the goal New Jersey 420 More than the goal Hawaii 545 More than the goal New Hampshire 720 Less than the goal Michigan 1,095 Same as the goal Wisconsin 1,275 Same as the goal Table 10.
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Current Practices in Closing Out Highway Construction Projects 29 Also, the actual duration information provided is the same, as state DOTs tend to calculate their project closeout duration performance measure for all projects and do not separate them by delivery method. The survey questionnaire inquired about how state DOTs set their project closeout duration goals.
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30 Practices for Closing Out Highway Projects from Substantial Completion to Final Payment Documentation for Closeout Highway construction projects generate many documents, reports, and information that become critical for closing out a project, as the work has to be reviewed to ensure compliance to the contract documents as well as reviewing and verifying all payments. Without proper documentation, closeout is difficult to accomplish in a timely manner.
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Current Practices in Closing Out Highway Construction Projects 31 Su bs ta nt ia l c om pl et io n/ fi na l ac ce pt an ce F in al e st im at e F in al p ay m en t ap pl ic at io n A pp ro ve d an d co m pl et ed c ha ng e or de rs A sbu ilt d ra w in gs M at er ia l c er ti fi ca ti on s M at er ia l t es t re po rt s O pe ra ti on s an d m ai nt en an ce m an ua ls C er ti fi ca te o f co m pl ia nc e F in al in sp ec ti on r ep or t C om pl et ed p un ch li st r ep or t D B E r ep or ts F in an ci al in fo rm at io n fo r fi na l pa ym en t R ig ht -o fw ay m ap s/ ce rt if ic at io ns Alaska Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Louisiana Maine Michigan Minnesota Mississippi Montana Nebraska Nevada New Hampshire New Jersey North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Washington Wisconsin Wyoming Total Count 40 40 38 37 36 34 32 30 27 27 25 23 15 10 Frequency 100% 100% 95% 93% 90% 85% 80% 75% 68% 68% 63% 58% 38% 25% Table 13. Project documents for closing out state DOT highway projects.
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32 Practices for Closing Out Highway Projects from Substantial Completion to Final Payment 0% 10% 20% 30% 40% 50% Results in claims/litigation Lack of proper archiving of documents Traveling public thinks highway projects are never finished Financial burden placed on the general contractor Reduces number of projects DOT can complete annually Negatively impacts the DOT-Contractor relationship Additional costs to the DOT Difficulty allocating DOT resources to subsequent projects Figure 10. Implications for not closing out projects.
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Current Practices in Closing Out Highway Construction Projects 33 The 20 state DOTs that noted using e-Construction during project closeout were asked to provide information on how e-Construction is used for project closeout. Figure 13 shows three aspects of e-Construction: information and document sharing, electronic document review, and electronic signatures.
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34 Practices for Closing Out Highway Projects from Substantial Completion to Final Payment Factors that Delay Project Closeout To find the current items that impact project closeout negatively and cause project closeout delays, state DOT responses included factors that are barriers to completing project closeout in a timely manner, as shown in Figure 14. The top two responses mentioned by 32 of the state DOTs (80% of the responses)
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Current Practices in Closing Out Highway Construction Projects 35 (45% of the responses) , delayed billing from vendors (33% of the responses)
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36 Practices for Closing Out Highway Projects from Substantial Completion to Final Payment • State DOTs recognize that when projects are not closed out properly and in a timely manner, they are unable to use resources on other projects or responsibilities, and they run the risk that funding sources will de-obligate funds for a project. • The processes and tools used by state DOTs to close out projects vary, but commonalities found include the importance of beginning the closeout process as soon as possible, auditing and documenting for project closeout as the project progresses, openly communicating and understanding the importance of project closeout, stakeholders cooperating and working as a team, and the use of electronic closeout processes making it more efficient.
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