Punch List Win-Win-Win Strategies
Have you ever completed a project with a zero-item punch list? Shouldn’t you? If everything in your contract was performed properly, there would certainly not be a punch list!
You can easily imagine how many frustrating punch lists I have encountered on our own projects, as well as with my consulting clients throughout all 50 states and most of Canada. What amazes me the most is the indifference and defensive attitude of the contractors who receive them and the lack of praise for the management teams in the companies that don’t. Isn’t that a realistic score card for your management team?
A punch list is a very negative message up the chain of command that describes whatever your employees did wrong. The owner, inspector, architect, engineer, general contractor, construction manager and even some of the other trades may have input into your deficiency list.
Basically, what that punch list is telling you is, “You must fix all this before we can pay you for your contract.” The owner can also withhold the construction manager’s or the general contractor’s final payment until your work is completed and inspected.
Your rapid response to a punch list creates this win-win-win scenario:
- You are the biggest winner because you got your final check. You gained positive customer relations with the general contractor or construction manager for future project consideration. Your rapid response also opened the door for your service work on that owner’s project.
- The next winner is your customer (the general contractor or construction manager), who eliminates those frustration calls from the owner to “Get this job done!”
- Last comes the owner, who is pleased to have a first-class, quality installation and a reliable service company to maintain it properly.
- 1. How long did it take to clean up all of
your punch lists in 2006?
2. How long did you wait for your final payment after you were finished on each of those projects?
Zero Punch List Strategies
Naturally, your very best strategy is a zero punch list. When you furnish and install everything included in your contract, you will receive a check for final payment rather than a negative punch list.
1. You should hold a kick-off meeting with your estimator, purchasing agent, project manager, expeditor and jobsite foreman to familiarize every involved party with the requirements of your contract.
- Create a “by who and by when” checklist.
- Value-engineer the entire project.
3. Your project manager or traveling superintendent should review the quality, progress and safety on each site at least once each week. He or she should attend the weekly jobsite meetings and update your as-built drawings.
4. Your jobsite foreman and project manager should do a pre-punch inspection before the completion of that project to clean up any items that might need your attention.
If and when you do receive a punch list, you should immediately give the sender a call, assuring him of your concern and prompt response. Always establish a definite schedule for completion of each individual item, since some may require ordering new parts or materials.
Your jobsite foreman should analyze each item on this punch list to determine how and why it happened to avoid the same mistakes on the next project. You can utilize his recommendation to repair or replace faulty workmanship, but I highly recommend sending your service tech or another craftsman to do the work.
Typically, your foreman is up to his butt in alligators starting his next project when your punch list arrives. It is unfair to expect him to have the time and patience to travel to his last project to clean up any miscellaneous items and stay ahead of the other trades on his new assignment.
Because of the urgency to complete every item on that punch list, you may have to consider other options depending on your size, workload and diversification:
1. You can pull craftsmen and foremen from other projects that are ahead of schedule.
2. You may have to pay some overtime, which would be a financial plus when you consider how much money is being withheld to all parties.
3. You could hire another contractor and sub this punch list work on a cost-plus or contract basis. When your project is out of your normal working radius, you should also negotiate whatever warranty work or maintenance that is included in your contract.
4. If you are using our Green & Gold mentoring program, you can hand your punch list to that Gold mentor. He and his buddies can jump right in and solve your dilemma.
5. Push your panic button! Let everyone know this is an emergency situation and that everyone must do whatever it takes to uphold the firm’s reputation.
Your distress call will certainly lessen the possibility of future negative punch lists. But there is definitely more that you should consider:
- You should cost-code your entire effort to clean up that punch list and get your final payment. Include your accountant’s loss of cash flow and credit rating, as well as your lost productivity on your present projects.
- For each management team member - jobsite foreman, project manager, traveling superintendent, etc. - who was delinquent in his or her performance on that job, record in the performance files (score cards) how much each contributed to your loss of profit and productivity.
Keep in mind our recommendation for your foreman and project manager to conduct a pre-punch inspection with ample time to clean up all of those items before your foreman leaves the project. Some of my clients call this a “deficiency list” and do not document those items in that foreman’s performance file.
We may not always get a nice “thank-you for a job well done” letter at the end of each project, but a final check instead of a negative punch list sends the very same message.