In this episode, you'll learn everything you need to know about the engineering and construction term " Punchlist," what they are, how to avoid them, and how to structure your contracts to minimize the impact of unfinished work.
In this episode, you'll learn everything you need to know about the engineering and construction term " Punchlist," what they are, how to avoid them, and how to structure your contracts to minimize the impact of unfinished work.
(00:31):
Hey everyone, today, we're going to talk about a common subject that is often misunderstood. And honestly, I don't know how many people actually know this term. The term is called punch-list. Now you may have heard the term punch list in a construction field when you're painting your house and something doesn't get finished. And then you're tell the contractor, Hey, you need to finish this. And they say, Hey, I'll put it on my punch list. Well, this term exists in every discipline of engineering and construction and really in any type of construction. Now, what we're going to do today is we're going to talk about it because it's a very critical term to understand what it is, how to manage them, and then what it means to your project. And then obviously how to protect your project from being impacted from punch list, because they will happen. So let's get started. Now. Punch list is used in all different industries, whether it's an engineering, whether it's in residential construction, doesn't matter.
(01:28):
It's everywhere. And what it is is essentially it's like you're building or you're designing a house. Now I like to use house as an example because everyone can understand it. If you're not in engineering, you get it too. It applies engineering as well. If you're building a house and you're painting it and you tell the painters, Hey, I want you to paint the whole first floor. When they're done, you're going to expect everything to be completed. All the walls will be the same color. The cut-ins are going to look really nice. The trim is going to be white. The ceiling is going to be white, right? So that's what you're expecting. That's your quality definition at the end of the job? Well, if you come back to these guys and they finish up and they tell you, or you look through it and you're like, the wall has the previous color on it.
(02:10):
What'd you guys do? And then you look at the ceiling and the ceiling is not completely white. And you look at the bottom trim and you're like, man, they left drips everywhere on the hardwood floor. All this mess is just happened. And you're saying, man, this job is not done, right? It's not done. But guess what happens? You've just done a quality inspection on your residential property. And now you're actually saying, and you're going to give that feedback to the contractor. You're going to go, Hey contractor, I need you to fix all these things you're going to walk through and you're gonna show them all these things. And they're going to go, if they're a good contractor, they're going to go and say, Hey, we're going to add that to our punch list. We'll get it completed in the next week or two.
(02:48):
And we'll take care of it, right? And then you don't pay them the full amount until they take care of it because that's the agreement. They're going to do a good quality job. Now, this exact same thing, this exact happens in any engineered or construction project, whether you're building a warehouse, building a billion dollar platform, anything, a building, anything, it happens just the same way, except it happens with obviously thousands of different types of pieces of equipment that are being built. Because when you have these major projects being built, everything's coming from somewhere and it's being built at some facility that has their separate group of people. Punch lists actually starts involving your quality. Now, in order to catch these things early, you need to have a system in place that actually would check to make sure you can even get a punch list. So what does that mean?
(03:38):
In our residential example, the person who owned the house was doing a quality check or a final inspection in engineering terms. You're going to have the same thing. Now. You're not normally just going to do a final inspection. If it's something that's critical, you'll have multiple inspection points and whole points along the way, but you'll always have a final inspection, which says, Hey, look, before I take this big piece of kit, this big piece of equipment, that's a 20 megawatt generator or a wind turbine or whatever it might be. We want to do an inspection on it because we want to make sure that it's designed to our specifications. And it meets all of the requirements from a construction standpoint and an engineering standpoint. Now that means that you're going to send your quality team out there. They're going to go through and they're going to do an inspection, just like the house example, where as a homeowner, you're doing an inspection, same thing here, you send out a team of people that are experts in this.
(04:30):
They do their inspections and they say, look, we went and we checked out your let's say wind turbine. And we noticed that, you know, here on this paint job, you're actually a little bit thinner than what's required. And they'll reference the specification. Here is the key in engineering. When you're dealing with this and contractually, your vendors will only design and build to what is contractually their obligation. Why? Because typically they're doing this for thousands of contractors or clients across the world, and each one's going to have a separate set. They usually do industry standard. If you want anything beyond, what's an industry standard, you need to specify it. Otherwise they will assume it's industry standard. And actually they send these specifications and they tell you, when you sign the contract, this is what we're building to. We're going to build to, let's just say it's American specifications or like an ASME, which is American society of mechanical engineering specs.
(05:28):
This is what we're building to. So we're going to use this as our baseline. And that means all the specifications within that, which has all the details of what that's made up up. What's the thickness of the paint coating. How do we want the certain types of flanges connections? All that stuff is going to go into a specification. And the quality group will inspect it and say, yep, you met it or no, you actually didn't and you didn't meet here. Or you missed a spot here. Here's not really done really well. Or this is not done to spec. That's when the punchlist comes in. Now you have somebody that's inspected. They come in and they say, look, you need to put us on a punch list, which means you need to take care of it. Cause I can't take this wind turbine with all of these things that are wrong, that you just gave me.
(06:11):
Ah, that's what happened. My boss won't like that. My company is not going to like that because it's not going to work as well. So they go back and I say, put it on a punch list. And now you may get a hundred or 200 items on there that need to be taken care of. And that becomes your punch list. Now, why is this important in the grand scheme of a project? Number one, three things that we need to be aware of when we're dealing with punches. One is all construction projects will have something on their punch list. I don't think I've ever done a project where you've just never had something come up. It's basically impossible. Think about all the times. You've asked somebody to do something complex and they've done it absolutely perfect to the way you wanted it. It's rare. It's extremely rare.
(06:56):
So you will have things come up and those things like all things take time. So you're going to have to have somebody go out there and fix it. So one of the things as a project manager, as a project lead to think about is can the construction doesn't end until all those things get cleaned up. So you have the execution of your contract with that contractor, which they're going to tell you, Hey, it takes about three months to do, but if you find a hundred things that are wrong with it, then you're adding yourself another month just to get it fixed, right? That's just schedule planning. So this is why I always harp on this, but you have to have contingency within your schedule within your budget, because you don't know if these things are going to come up, you can manage them with a great quality system, but you won't be able to know how they come up.
(07:40):
If you just do one final inspection, then you need to add a little bit more contingency into your roadmap to cover this, because this is a, this is just a known risk that could happen. The other thing I want to talk about is the only way you can have a punch list and have a contractual conversation that you're not going to be the one that's covering it is you need to make clear what is done. So if you build something for me, I need to know exactly what done means. So let's just use the house example. Cause it's a common example, right? If I tell somebody to go paint the walls and I don't make it clear to them, what good is or what done is then technically they could come back and say, well, we painted it all. And you're going to be like, well, you have drips, you have trams, you miss stuff.
(08:24):
And you can get into this conversation of like, well, you know, we, we did a coat and you know, that's all we agree to. And that's all we, we said in the contract, right? Same with engineering contractors. We need to be very specific with them. We need to tell them, Hey, look, I want this done to this level. This is the testing I'm going to do on it. It needs to pass this. And when it passes these requirements, then it's complete and it will be signed off at a hundred percent. That is what is done in engineering because you have to do these things, especially with the rigor and the details of the examinations that need to happen. Because usually it's somebody's is on the line. When they're using these types of pieces of equipment, that's two critical things. And the last thing is contractually, make sure in your contract, when you're doing this, the way to catch this always is in the beginning.
(09:07):
When you're first engaging with the fabricator construction shop, wherever it might be, catch this stuff in the beginning, make sure your quality processes in place. So number one, it avoids having a huge list at the end. That's the first thing have a quality process in place. But number two is make sure you have some correct language on how to manage these issues when they do come up, what's the expectations for them to complete it. What's the cost. So say you disagree on some things and they're saying, well, you never told me that. And you're like, well, it should be obvious that that's the way you're going to complete it. That's just common industry, best practice. So what happens then? Do you pay the full rate that you were paying before? Do you pay a discounted rate? Usually what we would try and do is negotiate a discounted rate because you know, you're going to have some things come up that might be rework and you're not going to be able to catch everything.
(09:57):
Especially when you're doing major, major projects, you're going to miss some things. And having that planned out is the best way to approach it. So you're not trying to create a contract that's 900 pages because that can happen to be honest with you. All right. I hope that helped with punches items. I wanted to make that super clear for people that either aren't familiar with it or are looking to see how they can prevent punches items from becoming an issue with their project. If you have any questions for me, you can always send me an
(10:24):
Email podcast@theomarproject.com And I'd love to potentially answer them on the show. See you on the next episode of the Omar project. Thanks for listening. I hope you enjoyed the episode. If you'd like to hear more, you can join at www.theomarproject.com. That's O M A R. We have a lot more information on project management, technical skills on the leadership. And also you can hear from more of the top experts in the field.