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5Â Â The project closeout process incorporates completion of the physical construction work, finishing outstanding and defective work, collecting, reviewing, and approving of project infor- mation and documentation, reconciling financial information, and making and receiving final payments. Although project closeout might only entail a very small portion of actual construc- tion work, closing out highway construction projects for state departments of transportation (DOTs) is a complex and vital process that is a part of project delivery for highway construc- tion projects. Because of its importance, project closeout and the people performing the associ- ated processes need to focus on collecting and reviewing the details of projects so that proper documentation and information is collected and shared throughout the duration of design and construction and in turn is used to close out a project in a consistent and timely manner. However, the complexities associated with highway projects are not lost on the project closeout phase. Challenges associated with project closeout include interacting with multiple internal DOT divisions, working with external stakeholders, reconciling multiple funding sources, changing of project personnel, migrating paper-based documents to electronic files, competing responsibilities of staff, and a plethora of other influences attributed to the specifics of a project (Johnson etÂ al. 2017; U.S. DOT 2015). Closing out highway construction projects can take many months or even years. When delays during project closeout occur and the project is not closed out in a timely manner, DOTs are negatively impacted. Resources in terms of people, materials, and equip- ment are tied up in projects longer than expected, meaning that DOTs are unable to assign these resources to other projects and responsibilities. The relationship between the DOT and their contractors is negatively affected as well due to delays in making final payments and the inability to release contractors from bonding obligations timely, which affects the contractorâs other work. Furthermore, more funds may be needed for closeout when delays occur due to extra labor needed for the additional time to close out a project as well as any interest payments associated with payments made late due to the delays. While project closeout of highway projects invokes many challenges, DOTs have developed procedures to help their project closeout processes be more consistent and efficient. The use of e-Construction for project delivery has made its way into the project closeout process, making the documentation portion of project closeout more efficient and easier, as documents are now collected electronically in real time as the project progresses, which are then readily available and accessible by the project team (FHWA 2017a). The use of formally developed processes and checklists for project closeout that focus on process improvements has also impacted the DOT in positive ways when closing out projects. Therefore, the purpose of this project is to inves- tigate the current state of practice within state DOTs regarding their project closeout processes and practices, focusing on the project closeout duration, documentation requirements, delays C H A P T E R 1 Introduction
6 Practices for Closing Out Highway Projects from Substantial Completion to Final Payment and implications of not closing out projects in a timely manner, and the practices that DOTs use that have helped make project closeout more successful. Synthesis Scope, Goals, and Objectives This synthesis investigated project closeout processes and procedures to complete highway construction projects that state DOTs use. TableÂ 1 shows the areas investigated for highway construction closeout at state DOTs along with associated sample questions asked of DOTs for clarification of these topics. Details for each project closeout topic are provided throughout the remaining chapters of this report. The objectives of this synthesis were to â¢ Report durations from substantial completion to final contractor payment and final closeout; â¢ Identify the required closeout documentation; â¢ Document financial implications of not closing out a project; â¢ Review policies, processes, tools, and metrics agencies used to minimize the duration required to close out a project; â¢ Recognize major factors influencing the delay of project closeout, including internal processes and external stakeholder influences; and â¢ Describe current practices of project closeout as reported by DOTs. Synthesis Methodology Information collected and reported for this synthesis is a result of the following research tasks: â¢ Performed literature review on project closeout and associated processes and procedures; â¢ Surveyed state DOTs on their project closeout practices; and â¢ Conducted case examples of project closeout by select DOTs. Topic Sample Questions Asked Project closeout duration â¢ What is the goal in days for closing out a project? â¢ What is the actual number of days for closing out a project? â¢ How was the project closeout duration goal set at your DOT? Project closeout documentation â¢ What are the documents required for construction and financial closeout? â¢ What documents are more challenging to obtain for project closeout? Implication of not closing out a project â¢ What are the impacts to state DOTs when a highway project is not closed out in a timely manner? â¢ What are the impacts to stakeholders when a highway project is not closed out in a timely manner? Policies, processes, metrics, and tools for project closeout â¢ What are the policies and processes used for project closeout? â¢ What tools and technologies do DOTs use for project closeout? â¢ What metrics do DOTs use to track project closeout performance? Factors that delay project closeout â¢ What internal and external factors tend to delay the project closeout process at DOTs? â¢ What processes during project closeout tend to delay closeout more than others? DOT project closeout practices â¢ What current practices do state DOTs use that have made their closeout processes more efficient? â¢ What examples are there of successful project closeout practices employed by DOTs? Table 1. Project closeout topic areas.
Introduction 7Â Â First, a comprehensive literature review that explored the current practices in closing out highway construction projects was conducted. The literature review focused on collecting and reviewing DOT project closeout documents and reports, which included construction manuals, administration and operation procedures, and other project closeout-specific docu- ments such as checklists and the forms used by DOTs during project closeout. In addition, previous studies and articles associated with project closeout that covered different aspects of project closeout were explored, including the documentation requirements, delays associated with project closeout and the implications of such delays, and the practices that are used that lead to successful project closeout. Next, a questionnaire was developed and used to survey state DOTs. The purpose of the survey was to gather information on current nationwide practices of closing out highway construction projects and to identify state DOTs with knowledge and experience that warrant further investi- gation. Also, the questionnaire allowed state DOT respondents to supply document links, refer- ences to websites, or attachments that offered specific DOT information on construction project closeout and financial project closeout. Distribution of the survey questionnaire occurred electronically to voting members of the AASHTO Committee on Funding and Finance, which includes representatives from all 50Â state DOTs. After several invitations and reminders to participate in the survey were sent, 40 completed questionnaires were obtained (an 80% response rate). The responses were then tabulated, evaluated, and supplemented with follow-up telephone calls and e-mails as needed for clarification. Finally, case examples were conducted to gather specific information on highway construc- tion project closeout. Eight case examples were conducted with the state DOTs of Connecticut, Florida, Georgia, Iowa, Minnesota, Ohio, Oregon, and Texas. These state DOTs acknowledged using a formal project closeout process and indicated a willingness to participate further in the study. The case examples include documented information from DOT staff and DOT project closeout documents and reports, and they provide application examples for highway construc- tion project closeout. Synthesis Organization This synthesis report contains five chapters covering the following topics: ChapterÂ 1: Introduction to the subject area, covering the scope, objectives, and study methodology. ChapterÂ 2: Literature review of construction and financial closeout as applied to highway construction projects. ChapterÂ 3: Current practices in the construction and financial closeout of highway con- struction projects. ChapterÂ 4: Case examples conducted with the eight state DOTs of Connecticut, Florida, Georgia, Iowa, Minnesota, Ohio, Oregon, and Texas. ChapterÂ 5: Key findings, current practices, and future research to address gaps found in the synthesis. AppendixÂ A includes the survey questionnaire used to collect data in ChapterÂ 3. AppendixÂ B is the aggregated results of the survey questionnaire data. AppendixÂ C includes the interview questionnaire used for the case examples. The report also offers a list of acronyms and abbreviations and their respective definitions, a glossary of terms, and a references and bibliography list.