Punch-List Management Strategies
1. Getting the install 100% right the first time.
From the original questioner:
Our contract says that we are entitled to the builder's definitive punch list within a week, but we rarely get it. We try to get builders to sign the punch list resulting from the job walk they do with our project manager. Committing them to this being the definitive punch list. However, half of them don't show up for the punch walk, and the other half won't sign the punch list (don't want to foreclose their option to find more punch). We then fax in our punch list and give them 48 hours to add to it. Once we complete our list, we submit the final bill. Of course, when you submit the final invoice, the builder's accounting department kicks it back because "The superintendent says the punch-out isn't done". It's tough to beat this racket.
From contributor R:
The people that do the punch out are usually paid to find something wrong. They will look until they find enough to justify their job. You will probably never get to the point that your first punch is zero. All sub contractors complain about multiple punch lists that just keep growing and growing. I have one PM that wanted to throw me off the job, tear out the counters and get someone else to redo it. He will not give me a punch list, just claims everything is unacceptable. There are no specs at all on the project so he has no legal leg to stand on. I know of people that will leave an obvious mistake or two for the inspector to find, hoping that he won't look to hard after he finds the big ones. Sometime it even works. Long story short, plan on two to three trips for every job and build the cost into the bid.
From contributor Z:
Could you structure this into your contract? Could there be language to the effect that your price includes one punch list and that all subsequent punch lists will be performed at 1% increase in cost? While we are talking about construction language it might be a good time to note that the onus for change-orders should not be on the subcontractor. It is the General Contractor who includes markup for management. Change-orders should be processed as a purchase-order by the GC rather than a supplication by the cabinet shop.
From contributor O:
Either do as contributor R suggests and build the costs for two or three extra trips out into the bid structure, and I suppose an internal correction that covers the cost of the delay of payment, or explicitly allow for one hit list trip free, and a specific call out fee for additional trips. Figure an amount that would cover travel to and from, as well as compensation for interrupting your schedule, and charge that for each additional callback for items that could have been put on the original hit list if they made a proper diligent inspection.
From contributor M:
This opens a can of worms! This is my top ten list but there are many tactics for getting good results at the end of any project. This is only a summary.
1. You must know your clients expectations and how picky they are. This will allow you to prepare for the punch list in advance.
2. Prior to installation prepare a punch-out kit for each project. Include all necessary items to make any kind of repair to the product you’re supplying. Including extra hardware (hinges, slides, pulls, ect.) and finished ends, touch up stain, color-rite calk, something to repair nail holes or cover screw heads.
3. Don't hesitate and make your own punch list right after your installers are done and prior to the final owner walk through. This is best done by the P.M. or sale person. They know the details of the project better then the installer and give the finished project a fresh set of eyes. Don't expect the installer to generate his own punch list but he should communicate any and all issues that need to be resolved including the details so they can be addressed ASAP.
4. It is a good idea to call the client prior to doing your own punch list and encourage them to met you at the job and give you their input but try to show up early so you can fix any obvious defects prior to their arrival.
5. The person assigned to do the punch list should bring the punch-out kit and some tools to make corrections. Why not if you’re going to make the trip anyways? This is also important because it is less likely to be seen prior to or during the final walk thru. If taking measurements be sure to measure twice and sometimes send extra parts in case the installer needs to fab something in the field.
6. Assign someone at the shop to complete any necessary items needed as soon as possible and group them together for delivery right away. If something needs to be ordered don't delay and consider paying extra for rush charges and express delivery.
7. Don't assign the sub's another install until they finished the last. That includes the punch items. Even consider paying them an extra trip charge. This might be cheaper in the long run. I sometime send a shop employee to do this especially if a punch item is caused by them. It is also a good break for them to get out of the shop routine and see the final product. I find this a good time for training as well. It might prevent a recurring problem.
8. If the client is a drama queen. You need to make every effort to get the job done to perfection the first time and do it quick. This might require upper management or the owner to be involved with the project. Check and double check everything. Rehearse the project in your head and on paper. Of course it's not always going to work out perfect. But you can be prepared for worst case scenarios. Have a couple back up plans ready if thing start to get out of hand. If you see something is not going as planned make the necessary corrections ASAP and keep the client in the loop.
9. Be pro-active. As the owner of my company I am guilty of standing back and looking at the job and admiring how good it looks but not testing every door and drawer, checking for every shelf, ect. and as soon as I get back to the shop there is a message that the door is not adjusted, a shelf is missing, a drawer is sticky. Typically these items can be fixed in a few minutes if I would have just taken the time to check during my site visit. If the project has a long duration try to make it a habit to create an ongoing punch list and be sure older items are being addressed in a timely manner. I carry a small tool bag with me to every job and if I see that an installer needs something from it (calk, stain, cleaner, rag, etc.) I give it to him and then replace it when I get back to the shop.
10. Be critical of your work don't wait and see if the client catches your mistakes. My guys had a bad saying "looks good from my house". I now enforce a rule that it is unacceptable to use those comments on a job. My attitude is that we are the professionals we know our product better then the client so why should I wait for a punch list if I can prevent it all together.
By all means I am not saying all of our projects have no punch list but they are very minimal and usually corrected in a timely manner. If you know it is wrong fix it and fix it fast. I can say a punch list has never delayed a payment before.
On another note: it is not always worth pointing fingers at who is a fault or creating change orders over small things as it is to just get the job done and done right. In the commercial world a $100 change order at the end of a project can hold up everyone’s finial draw (I’m talking about 10’s of thousands of dollars in some cases) for weeks or months to get approved. Is worth $100 to hold up this kind of money?
From the original questioner:
Great response contributor M! Quite a few ideas we can readily incorporate. Your point about not assigning subs to another job until they wrap up is a good one. I frequently end up "cleaning up" after my subcontract installers because I've moved them on to another job and I need to get the punch addressed quickly.
Do you have detailed standards for your contract installers that clearly set forth what their punch responsibilities are? Our most common problem is when anything is "out of spec" on a job (a wall not plumb, an opening not sheet rocked and floated to the proper dimension), that's an open invitation for the installer to leave the work half complete and dump it back in my lap.
From contributor D:
One thing that I've contemplated doing if we were just a tiny bit larger is the role of a "closer". This would be a well qualified, well tooled, well supplied, and probably well compensated individual whose sole purpose is to punch out projects by any means necessary. This would free up the regular installers that do the bulk of the work to move on to the next project, which is good for them, good for the next client, and good for the bottom line. In our situation, this individual would also do field measuring, pre-fab check (our process of checking a job one last time before fabrication), pre-install check (our process of checking a job to make sure it's ready for installation), and punch listing. More than likely, he would also get the tasks of warranty calls, small project installs, and any other loose ends the come up.
In my opinion, you'll never achieve the ideal of single punch lists, client or contractor sign-offs, etc, etc., at least not on every project. By implementing this "closer", it allows your projects to keep moving, it provides a single source of responsibility, and it provides you with a definitive line item on your financial statement. It would not be a license for everyone to take advantage of you. It is more to protect your own profitability than anything else.
From contributor M:
"Do you have detailed standards for your contract installers that clearly set forth what their punch responsibilities are?" I do but it's not so much about spelling it out as much as it is enforcing the fact that the project has to be completed. I explain to the sub the importance of the punch list and completing the project. I think any good sub will understand this and will complete and punch list as long as you have a good understanding of what is needed and provide that to them.
"Our most common problem is when anything is "out of spec" on a job (a wall not plumb, an opening not sheet rocked and floated to the proper dimension), that's an open invitation for the installer to leave the work half complete and dump it back in my lap." I agree this is a project killer. The right installer can handle anything but others find excuses and walk. As much as I hate it I usually get involved and walk the job with the installer (hold his hand) and explain a solution for each problem. Sometimes I will assign another installer to the job to help or take over.
As far as contributor D’s comment - "one thing that I've contemplated doing if we were just a tiny bit larger is the role of a "closer". I agree but don't let this backfire on you. If the core installers figure this out they will take advantage of the closer. They will leave everything for the closer and you will get less and less from the installer.
From contributor A:
Wow, good ideas, I already am the pre-fab checker, I am so anal about everything being just right. We have our installers make a list, sometimes they forget simple things. We get a call and fix it. We really should make it a point to visit with customer at their house at the very end, and sell them some extra stuff like soft close hinges. My father was the first to experiment and sold a set at the end.
From contributor U:
Send an initial install crew and then a second one with the punch list and additions from the first. What is crucial is the first does the majority of the install and the second does the clean up and gives you insight as to what is going on through a paper trail. Also, the paper trail of the first crew can give you ideas of what is billable and what is not.
I would look at my contracts carefully and re-write to make sure everyone is of the understanding that extra shelves, new backs, and etc. are all at an additional cost and so is excessive standing around. If it is in writing and justified and not excessive, you can re-coupe a new van or machine yearly.
From the original questioner:
Contributor U, I'm interested in what kind of luck you have collecting on charges to builders for kind of install inefficiencies you mention. Our experience has been that we can bill builders for these added expenses, but they ignore the invoices. Their position is always, "if I didn't approve the change order in advance, I'm not paying it." Billing is easy; getting it collected is hard. What's your secret?
From contributor U:
Contract/estimates must read per plans/specs and per approved shop drawings. Don't deliver the extra shelf until you have given an estimate for the extra expense do not offer any thing extra – do not do anything extra. That means when the plumbing is in the wrong place the installer calls the office and the office calls the builder - this alleviates the replaced back crap. You need to make sure that your installer or anyone else in your organization does not promise base shoe or anything that is not part of the contract.
One of the hardest things to learn is that a contract spells out a certain set of parameters that you must perform and the other party must reciprocate. Once you have done it let the other party initiate a change order or other contract for additional work. This is why it is so important to get everything in writing, shop drawings approved, etc.
As we grow and track our expenses, we can see a lot of money can be kept by listening to the other party and making notes as to what they said. The biggest mistake we make is wanting to help and offering before they finish their sentences and offer to pay us by getting a cost from us. Believe it or not we must train ourselves to stop offering to help and solve problems and let the contractor or customer do it themselves.
We often fill our heads full of trash and that the job super is yelling get it done and such- is he going to sign for the extra? If it's not on the prints or approved shop drawings point it out. Make it a point in the future that all extras filter through the office before they are done in the shop or field.
From contributor U:
One thing I forgot - the initial installer needs to stand back ten feet in each room that is complete and look for adjustments that need to be made and do it then and now. If scribe moulding needs to go on do it, get the crown and toe kick all of it and have a customer or super see progress through room completion. Once a customer sees a chink in the armor it is all over they will find more until they have worn you slick.
We did a job with 70 feet of wall cabinets and not one door was adjusted. Our punch list was absolute hell. It all revolved around the initial impression that we left on day one with the doors. The list was so bad we had seams that were being compared in the tops from one end of the building to the next.
Initial impressions are imperative. We have never left a job without the doors adjusted (at least not to my knowledge) since. Consequently they fought us tooth and nail for the extras- all because of those stupid doors.
From contributor Z:
Contributor U makes a good point about adjusting doors as you go. We had a project several years ago at which the installers set the cabinets with the plan to adjust all the doors and the end. As it turned out there was a scheduling conflict with the flooring guy. The installers were pulled off the project and the Swedish finish was applied. Nobody could walk on the floor for a couple of days but this did not keep the owner (a chief surgeon at the local hospital) from standing at the threshold and getting angrier and angrier. Like contributor L's project, this fellow purchased a micrometer to measure door gaps with and it took a month until he was satisfied. Adjusting doors as you go seems like a fairly simple policy to insist upon.
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