What is Project Closure? Administrative Closure, Realities, Concerns, Final Report & Meetings

  • Post last modified:4 May 2023
  • Reading time:73 mins read
  • Post category:Project Management

What is Project Closure?

A project manager is generally responsible for announcing a formal closure of the project and then delivering a report on the overall success of the project to the project sponsor and other stakeholders. A project is considered to be closed once the client approves all its deliverables.

However, all projects are not closed under normal conditions. In such a case, it is necessary to assess whether there is any salvage value and understand why a particular project was not successful.

Table of Content

After the project is closed, the project manager should perform a project evaluation to assess and provide feedback to each team member on his/her performance in the project. Moreover, project evaluation provides insight into lessons learned and best practices that can be adopted in the organization for future projects.


Project Administrative Closure Situations

Generally, the closure of a project or its termination is done under normal circumstances when all the desired goals and objectives of the project are fulfilled. The scope of the project is achieved within the given budget and quality and schedule.

In such a case, the project sponsor is highly elated and the project is closed with a celebration, awards, and recognition. Under the normal closure of a project, more projects are offered by the client in the future to the organization. However, sometimes, a project is also brought to an end under various adverse situations. Some of these situations are:

Premature

Sometimes changes in the client’s requirements and the inability of the organization to meet those requirements can lead to calling off the project before normal closure.

Perpetual

Some projects are considered to be taken on a “life or their own” and are known as either runaway or perpetual projects. Such projects are the result of delays or scope or a MOV that was not defined clearly during the initial stage of the project. Further, attempts are made by the project sponsor to add various functionalities to the product; thereby, there will be an increase in the time duration and resources for the closure of the project. Also, the budget gets affected.

Failed

Sometimes a project fails due to a lack of focus on the people, techniques, and processes of the organization. Although the importance of the project is defined in MOV, the budget and the schedule fail when costs become higher than the benefits of the project.

Changed Priorities

At times a project can be terminated because of a change in priorities. The finance and resources of one project may be transferred to the other project that has a high priority. Such a change generally occurs when the importance of a project is not identified properly during the initial phase of the project. Therefore, in the long run, the priority changes, and the crucial project are assigned the resources. As a result, the running project is either closed or put on hold.


Realities of Project Closure

As mentioned earlier, when a project is closed under normal circumstances, it is followed by rewards and recognition. However, it is actually, not the case. Even under normal situations, the project manager and the team members may have to face the following realities:

The concern of Team Members for Their Future Employment

It has been found that as soon as a project is about to close the team members are worried about their next task. Generally, the team members are taken from different departments of the organization. And post the project’s completion, the team members will shift from one project to another. In other words, they will move back to their previous tasks.

Generally, irrespective of paying attention to the project closure, the team members start focusing on what they will do next. Therefore, the team members seek priority in their careers; instead of project closure. As a result, the team members will not focus on the tasks to be performed to close the project; thereby, project closure becomes a challenging task.

Bugs Still Persist

During the testing phase, not all bugs or defects in the product are closed. Although testing is an essential and crucial process in a project, all bugs may not be identified. After the release of the product or post-system implementation, certain bugs are identified. Such a situation becomes stressful for all project stakeholders. Until all the defects or bugs are closed, customer satisfaction in association with the product is an issue.

Lack of Resources

Although all the resources required by the project are identified at the initial stage, sometimes resources and time become a concern during project closure. In such a situation, the project manager may find that the required resources for addressing the challenge or issue of the project are not available. Therefore, such a situation becomes irritating for the manager and becomes more aggressive when the management takes a call to cut or manage the budget of the project.

A lot of Documentation

Generally, every project requires a lot of documentation at various levels such as project stages, systems, training, and users. While planning for the project, the time required to write documents is included in the project plan.

Sometimes, the task of creating documents is done at the end of the project. As and when the project closure approaches, documentation becomes important. A lot of time is consumed in the completion of documentation, which becomes a challenge in the project closure.

Mismatch Between Deadlines and the Actual Progress

Many a time a project does not complete within the planned schedule due to various reasons such as inadequate project management, high risk associated with the implementation of the project, and over-estimation. Every project needs some amount of resources and time for completion. Any sort of misjudgment done while planning results in a difference between the planned and actual project performance.

Increased Level of Stress of Team Members

When deadlines are not met, an alarm is raised for various project stakeholders. The managers of various departments are stressed about whether or not the project will result in profits or will be able to gain customer satisfaction. The cause of worry for the sponsor and customer is whether the project will be delivered on time.

In addition, the project stakeholders are also stressed about whether or not the project will be successful and therefore the blame will lie on the stakeholders. The tense work environment reduces the chances of completion of the project.

Irrespective of the fact whether or not a project closes in a normal fashion or prematurely, a standard process is followed for the project closure. It is expected from the team to wind up the project in the most logical manner after performing a series of steps. From the administrator’s perspective, this process ensures that all the loopholes are tied together for closure.


Project Sponsor Acceptance

During the closure of a project, the acceptance of the project sponsor for the project is achieved. Generally, it is a myth that if a project is delivered, installed, or released, it will be accepted by the project sponsor or customer. As the acceptance of a project is based on the completion of the scope of the project and its quality objectives, it becomes the responsibility of the project manager to ensure that all the deliverables of the project are completed as per the defined specifications.

Various elements such as documentation, training, and ongoing support should not be added later on in the project, instead should be included at the early stage of the project. Any negotiations regarding what should and should not be part of the project should not be done at the later stage of the project as it can result in a situation where the client holds the payment for the project.

There are generally two types of project sponsors: short-sighted and knowledgeable. Short-sighted sponsors consider a project as a short-term buyer-seller relationship wherein the main goal of taking the project is to earn maximum profits. Sometimes, such a relationship turns out to be adversarial provided the project sponsor tries to re-negotiate the scope of the project as well as the project cost during closure.

On the other hand, knowledge sponsors feel that they play a crucial role in the result of the project. Therefore, they will actively participate in the project and will interrogate tough questions while conducting a project review. However, their goal is not to embarrass the team or a manager; instead, they are focused on the successful closure of the project.

Irrespective of the type of project sponsor, the team should realize that a project will be accepted only if the acceptance criteria are mentioned during the initial stage of a project. Also, the completion of documentation or all deliverables of the project at the specified time is essential.

Also, the content to be covered in project deliverables should be mentioned as it is an important factor in project scope management. Also, the details of the two elements namely, project scope and system requirements should be exact and complete. Moreover, a clear definition of the project scope will ensure that all stakeholders have the same expectations instead of assuming what will or will not be delivered at the project closure.


Final Project Report

Generally, a final project report is created by the project manager and the team members, which is to be delivered to the project sponsor and other stakeholders of the project. The goal of creating the report is to ensure that the project has been completed with the defined outlined business case and specifications mentioned in the plan.

Such a report puts the sponsor in a confident position. Apart from the report, a presentation is given by any team member or project manager to the project sponsor and stakeholders.

Before the presentation, the report is given to all stakeholders so that feedback can be received, which helps in identifying loopholes in the project.

The final project report includes the background history of the project and various other items such as:

  • Summary of the project (Description of the project, MOV of the project, scope, schedule, budget, and quality objectives of the project)

  • Comparison of planned result with the actual one (Original history of the approved changes in the project, original deadlines vs. the planned scheduled deadline, planned budget vs. the actual budget, test plans and test results, etc.)

  • Outstanding issues (Expected date of completion of the project, any further support required)

  • Project documentation list (User manuals, system specifications, training materials, and maintenance documentation)

Benefits of Final Project Meeting and Presentation

If a project manager has been able to seek the confidence of the project sponsor, the final meeting and presentation have to be arranged.

The benefits of conducting a final meeting are:

  • Sending a Message to the Board That the Project is Closed: The project manager formally announces the closure of the project in front of key stakeholders available in the meeting. This provides a sense of closure to all stakeholders.

  • Transferring the Product or the System: Although the implementation of the product or system at the client’s end is completed, a formal transfer of the product to the organization is done in this meeting.

  • Acknowledging the Contribution Made by Various Authorities and Members in the Project: A project manager acknowledges the hard work, dedication, and devotion of the team members and other key stakeholders in closing the project on time.

  • Receiving the Formal Signoff: Lastly, the project sponsor or customer formally accepts the product by giving the formal signoff. The final report is signed by them along with some contractual documents.

Closing the Project

After the acceptance is received for the project from the sponsor or customer, various administrative closure processes are to be formed. The preparation of documents needed at the time of closure is quite challenging. This is because at that time the team members look forward to the next assignment and they may lose interest at this stage.

However, administrative closure is crucial because, after releasing the project, the project manager and the team must wrap up every minute detail of the project, which is cumbersome.

The administrative closure of a project is important as it helps to:

  • ensure that all deliverables are completed.

  • take formal acceptance from the project sponsor and the client.

  • schedule review of the team members involved in the project as well as the project.

  • close all the project accounts.

  • plan a celebration on the successful closure of the project.

Why is Closure Important?

Projects, by definition, have a beginning and an end. Without a formal closure process, projects can drag on as stakeholders strive to include ‘just a few more requirements’. These unbudgeted add ones can create serious consequences like significant impacts on schedules and budgets; sponsor interest wanes and the team loses motivation and focus.

Any significant changes at this stage of a project should be treated as a second release and a new project. These changes have to be tightly controlled by the project manager. Hence the following are the formal processes that are to be necessarily carried out during the close-out phase of the project.

The Project Closeout Phase is the last in the project lifecycle. Closeout begins when the user accepts the project deliverables and the project oversight authority concludes that the project has met the goals established.

Hence, Project closeout is carried out for the following key work process to be finalized and closed the project:

Closing Out the Financial Accounts

It is, all financial transactions are closed under the project name, and under this project code declared as no more transactions are required to be done. The project is financially closed. However, any extension of the project will be carried out at a later stage and will be taken under another project code, where the financial transactions can be carried out.

Example: Project name: Installation of Nano Car Project. Project Code: based on plant and owner specific however to understand consider it as N321020. Hence once the project is closed for financial accounts no more transactions are carried out under the project title and the code.

Turnover of the Project Deliverables to Operation

The equipment along with respective systems is to be handed over to the operation team lead or owner. These are handed over one by one system which includes equipment and relevant accessories and acknowledge by the operation team.

Example: Project Name: Coal-fired power plant execution project. Handing over systems to the operation team by the project team are Boiler system, Turbine system, Generator system, DM water system, etc. These are handed over after all necessary inspections & commissioning are carried out.

Redistributing Resources

Once the project is formally under the closing process, slowly the staff relived who have completed their assigned task in all respect including documentation and billing process. Equipment like Crane, Hydra, and others are released once their work is over during the ending process of the project or in-between once the task related to them are over. These resources would be deputed by management on another project which is under the same campus or maybe at another site.

Completing, Collecting, and Archiving Project Records

It is very useful to collect all communication, planning, and scheduling of the project with actual updating based on site conditions. To be collected in appropriate indexing for records, analysis, and future records.

Example: Project Name: Coal-fired power plant execution project. System: Boiler: All, installation sequences, processes, correspondence with various agencies, and guidelines are to be recorded in adequate indexing. Similarly, it is to be done for other systems of the coal-fired power plant.

Documenting the Successes of the Project

Documentation for the System which is completed with commissioning and final boxed up are to be handed over to the operation team as well as the documentation center, which includes all discipline (like civil, mechanical. Electrical, instrumentation, and other utilities). These are submitted by the project team to the operation team and finally, these are kept in the documentation center after review and acknowledgment by the operation team.

Example: Project Name: Urea plant commissioning project. Documents to be handed over: loop-wise site drawings and isometrics, Calibration certificates of equipment, NDT Testing reports, hydro test report, lines supports and installation, and final box-up report.

Documenting Lessons Learned

During the execution of a project there all many odd situations arrived, due to which projects are going through the schedule variance and cost variance against the planned one. Example: Projects Name: Fertilizer Plants in India- Period -1988 onwards. There is some equipment which is imported. This equipment delivery (a few of them) may be delayed due to different reasons. Like Licensing process of importing is delayed comparing the planned schedule.

The cost of the equipment is enhanced once the dollar value V/s Rupee value is devaluated due to escalation in Dollar value. (It happened practically when three fertilizer projects during -1988 were sanctioned and dollar value during the execution stage in 1991-92 escalated by 30-40 % at that time. The dollar value was hiked by one dollar equivalent to almost 35 Rs instead of Rs 20. These become the learning lessons for the next project about schedule and cost variance.

Planning for Post-Implementation Review

It is a very important aspect to review each activity execution schedule V/s planned schedule will give an insight into schedule deviations (such as delay or early completion) of activity. This will become the basis for new project execution and a revised planned schedule concerning each activity. Wherever the planned schedule of activity remains unaltered during execution indicates the best planning schedule for that activity in the total schedule.


Project Closure Process

Project closeout is the period of construction that provides the systematic transition of the project to the owner until the cessation of all construction activity on the project site (except for any work associated with the correction period, discussed later). Project closeout can be as short as a week for very small projects to as long as three months or more for large, complex projects. The closeout transition has a two-phase process: the pre-substantial completion phase and the post-substantial completion phase.

As the phase names imply, the pivotal point between the two phases is the date of substantial completion. Therefore, depending on the project, the project closeout process should be scheduled based on the scheduled date of substantial completion. The date of substantial completion is very critical regarding project closeout.

Substantial completion is defined as General Conditions of the Contract for Construction, as the stage in the progress of the Work when the Work or designated portion thereof is sufficiently complete following the Contract Documents so that the Owner can occupy or utilize the Work for its intended use.

As the above provision alludes, substantial completion is not limited to a single date multiple dates of substantial completion may be issued for various portions of the work. However, it is the final substantial completion date that is of significance to project closeout.

Contractually, the date of substantial completion establishes the point when the contract time ends. If the date of substantial completion is beyond the contract time, then the contractor may be subject to liquidated damages or penalties if provisions for those are in the contract. Conversely, if the contractor achieves sub-spatial completion before the end of the contract time, the contractor may receive a bonus if a penalty/bonus clause exists in the contract.

The contractor is required to notify the Stakeholder / Engineer in charge when the contractor believes that substantial completion has been, or will be, achieved. The Engineer In charge will then inspect to verify that the work has reached substantial completion.

If the Engineer In charge concurs with the contractor’s assessment, then they will prepare and distribute a Certificate of Substantial Completion that establishes the specific date, as well as other items, such as insurance and maintenance responsibilities, and a list of incomplete items. At this point, the owner assumes responsibility for the work (unless otherwise stated in the Certificate of Substantial Completion) and is permitted to occupy the said project.

Pre- Substantial Completion Phase

The pre-substantial completion phase is the period of buildup to the eventual transition of the project from the contractor to the owner. During this phase, the contractor retains full control of activities on the project site specify the individual tasks that must be accomplished and the items that must be submitted by the contractor before establishing the date of substantial completion. The initiation of this phase should be started on a date appropriate to the project that ensures sufficient time to complete required tasks.

Post Substantial Completion Phase

Once the date of substantial completion has been certified by the Engineer, the project enters the next phase of closeout, which will take the project to completion. At this point, most of the closeout activities have been accomplished. The owner has occupied or is permitted to occupy the building and typically assumes responsibility for its operation, maintenance, security, and insurance unless stated otherwise in the certificate of substantial completion.

The date of substantial completion also signifies the beginning of the correction period, which is typical as per the document. During the correction period, the contractor is required to correct any deficiencies discovered. The periods indicated in project warranties also begin at this time.

Indicative Diagram of the Project Closeout Process

The closeout process starts on the date of the closeout meeting, which is based on the contractor’s scheduled substantial completion date. The majority of the closeout tasks occur within the Pre-Substantial Completion Phase. The owner assumes responsibility for the project after substantial completion, but the contractor is required to complete punch list items within the Post-Substantial Completion Phase.

The scheduled substantial completion and the actual substantial completion may or may not be on the same date. In essence, the closeout meeting is to make sure that everyone involved with the project—owner, engineer, consultants, contractor, and subcontractors—knows the details and timing of closeout activities to assure a smooth transition.


Project Close-out activities

The closeout meeting agenda should cover all requirements in the contract documents associated with the full completion of the project. Activities include the following:

Starting, Testing & Adjusting Systems

During this phase of the closeout process, the contractor and its subcontractors need to startup all building systems and make any adjustments necessary to ensure proper operation. This may be part of a commissioning process if specified in the contract documents. The contractor should notify the engineer when tests and system startups are scheduled so the appropriate design consultants can be present.

Any tests required by the contract documents and not performed during the regular course of construction should be accomplished at this time. If a test is associated with a system startup, then the test should be accomplished following the startup by the manufacturer’s instructions. Tests should be conducted in sufficient time to allow performance of the test, analysis of results, preparation of reports, and distribution of reports before the date of substantial completion.

Demonstration & Training

The owner must be capable of operating and main- training the building once the owner occupies it; therefore, the owner should be properly trained. Demonstration and training can include anything from operating motor-operated roller shades to the complete heating, ventilating, and air conditioning system. The demonstration and training should be provided for owner’s personnel who will have direct responsibility for the management of the facility and should be conducted by qualified trainers. Division 01 of specifications should establish requirements for demonstration and training.

Punch List

The Contractor shall prepare and submit to the Engineer a comprehensive list of items to be completed or corrected before final payment. Failure to include an item on such list does not alter the responsibility of the Contractor to complete all Work following the Contract Documents. Although contractors are assigned the task of preparing the punch list, Engineer frequently assumes responsibility for the preparation.

Reasons why engineers pre-pare punch lists vary from lack of detail in a contractor-prepared punch list to engineer desire for greater control in the process. Regardless of the reason, the punch- list is the contractor’s “to-do list” that must be fully accomplished before completion. The General Conditions require the contractor to notify the engineer when the project is ready for substantial Completion. The engineer and its consultants conduct an inspection that adds to the contractor’s punch list.

If the Engineer determines that substantial completion has been achieved; the punch list becomes an attachment to the Certificate of Substantial Completion. Example: For a Complex Building project there are minor jobs left out or need alteration or finishing. Like: Proper earthing connection, Back side plasters, and cleaning of the waste.

Operation and Maintenance Data

Operation and Maintenance (O&M) data are a compilation of documents that usually consist of manufacturers’ printed manuals and instructions that explain how to operate and maintain the systems, equipment, and finishes installed on a project, and typically include manufacturers’ warranties. O&M data should be submitted by the contractor and approved by the engineer before demonstration and training are conducted so the data can be used as training materials.

The format of the O&M data should be specified in Division 01 of the specifications. The format commonly submitted is a bound hardcopy, but electronic documents saved on CD- ROM or other media are rapidly becoming the norm. Example: Plant Machinery Erected and commissioned. The documents for its operation and procedure for maintenance are taken in detail during the commissioning of machinery.

Record Documents

These are“As-built” documents, record documents are those documents submitted and turned over to the owner as a record of the construction during the closeout process. The term “as-built” is not appropriate for these documents as it gives the connotation that the documents indicate work as it was installed. The reality is that the documents convey the installation to the best of the contractor’s knowledge since much of the information is provided by subcontractors.

Record documents may consist of marked-up copies of the drawings and specifications, a complete set of submittals, all addenda and contract modifications, reports, and any other documents required by the contract documents. Specifications should identify the required record documents and the format. Like O&M data, record documents are increasingly being submitted in electronic form for ease of storage and retrieval.

Commissioning

If commissioning is required, whether it be systems and equipment commissioning or total project commissioning, then the activities for the commissioning process should begin during this phase of the project close-out. Commissioning is typically conducted by a third party (i.e. commissioning authority) hired by the owner. The purpose of conducting commissioning during this phase is to determine if the building is ready for occupancy and identify deficiencies that may be added.

The project’s punch list. Commissioning activities may be integrated with starting, testing, and adjusting, as well as demonstration and training. Commissioning may also assist in verifying the accuracy and completeness of O&M data.

AHJ Approval

One of the key elements in determining substantial completion is the approval of the project by authorities having jurisdiction (AHJ). The approval usually comes in the form of a certificate of occupancy for occupied buildings or a certificate of completion or equivalent for unoccupied structures or shell buildings. Without approval by the AHJ, the owner may not “occupy or utilize the Work for its intended use,” thus, the definition of substantial completion has not been met.

Other Activities- Transfer of Utilities

Other tasks that may be required before substantial completion may include the transfer of utilities to the owner, delivery of keys and cores to the owner, removal of temporary facilities, and general cleaning of the work. The contract documents may specify other tasks that must be accomplished for the engineer to certify substantial completion.

Additionally, the contractor may request payment for work completed and release of retain age; however, a sufficient amount of money (either retain age, money for uncompleted work, or a combination of both) should be held by the owner to cover the cost of completing and Correcting the remaining work if the contractor fails to do so.

Final Acceptance

The contractor’s main task during this phase of the project is to complete or correct the items identified on the punch list. Since the owner typically assumes responsibility for the security of the project at substantial completion, the contractor may have to schedule access with the owner.

Since the period for correction and completion of items on the punch list overlaps the correction period stated in the General Conditions, there may be a need to specify how deficiencies discovered between substantial completion and completion are handled—they may be added to the punch list to be corrected before completion, or added as corrective work associated with the correction period.

Once all the items on the punch list are completed, the contractor must notify the engineer that the project is ready for the final inspection. This notification is required to be in written form and should be accompanied by a copy of the contractor’s final application for payment Upon receipt of the Contractor’s written notice that the Work is ready for final inspection and acceptance and upon receipt of a final Application for Payment, the Engineer will promptly make such inspection.

The Engineer, after receiving the written notification from the contractor, will inspect the project to verify that all punch list items have been addressed. Additionally, the engineer should ensure that any remaining closeouts (e.g. extra materials, O&M manuals, record documents, etc.) have been submitted.

Final Payment

Upon completion of the final inspection and verification that the project is complete, the Engineer certifies the contractor’s application for payment. However, before the payment application can be prepared and submitted by the contractor. Outstanding proposal requests and change order requests need to be incorporated into a final change order.

Any claims in which a disagreement exists can remain open to be handled later through mediation, arbitration, or in court. Also included in the final change order are any final adjustments to allowances. Outstanding authorizations for allowances are determined and any unused funds are added to the change order as a credit to the owner. Finally, the final change order may also adjust the contract time through requests for extension.

If time extensions are approved, they must be included before any application of a penalty/bonus or liquidated damages clause. If penalties or liquidated damages are to be assessed, they need to be deducted from the final application for payment before certification by the Engineer. After certifying the final application for payment, the Engineer will forward the certified application to the owner, who, in turn, makes payment within the period required by the contract documents. When the contractor accepts the payment, then completion is deemed achieved.


360-Degree Closure of a Project

Besides the closure activity individually to be completed, It is a very important aspect for the overall -360 degree closure of the project. This is due to the financial transactions cannot be done; project liability from the project team is finalized. All necessary documentation is finalized. No item, document, or drawings consultancy is pending from any agency or contractor. Hence following formal documentary clearance with the authorized signatory is completed:

Administrative Closure

Administrative closure is the process of preparing closure documentation of the product or process deliverables to the customer as well as taking other administrative actions to ensure that the project and its assets are redistributed. Delivering closure documentation does not mean getting approval and acceptance signatures on the deliverable.

It involves a series of steps to ensure the product meets the customer’s requirements that were defined in the Project Requirements document and approved by the customer. The Post Implementation Evaluation Report (PIER) is produced in the Administrative Closure. Other areas included in administrative closure are archiving facilities and personnel reassignment.

Example: Nano car first ramp-up production to be checked and confirmed for total customer satisfaction. The project phase of production is over. However, any changes in the process are subsequently carried out.

Post-Implementation Project Review

A Post Implementation Evaluation Report (PIER) documents the successes and failures of the project. It also provides valuable historical information on the planned and actual budget and schedule. Other selected metrics on the project may be collected using documented procedures. The report also contains recommendations for future projects of similar size and scope. Information within the PIER should include, but not be limited to, the following items:

  • Project Sign-off: All the agencies who are involved in the system are going to sign the relevant documents for clearance of the project with all necessary documentation review.

  • Project Cost Management: Necessary documents are to be cleared for final payment for all agencies after receiving their work completion certificate.

  • Project Quality Management: Contractors should submit all inspection reports with summary reports system-wise or as prescribed by the owner’s project inspection team.

  • Project disaster recovery plan: In case of laparoscopic failure of a unit or plant, a safe recovery plan is to be finalized during the end of the project stage in coordination with agencies, engineering consultants, and the owner’s operation team with the project team. This document is signed by authority from the agency, project team, and operation team for a final agreement.

Project Documentation

All documentation that has information about the project (including design documents, schematics, and technical manuals) that has not already been turned over to the operations and maintenance organizations must be completed and forwarded to the Project Manager. After the PIER document has been prepared, the project information is archived. Historic project data is an important source of information to help improve future projects. The archived information will vary from project to project. Typically, the following project data is archived:

Project Notebooks, Correspondence, Meeting notes Status reports, Contract files, Technical Documents, Files, programs, tools, etc. placed under the use of, Configuration Management. Any other pertinent information to the project. All hard copy records should be stored following the State of Arkansas record retention guidelines.

Many of the technical documents and automated versions will be turned over to Agency personnel responsible for the maintenance and operation of the system. Summaries of Technical information should be stored electronically for historical reference to facilitate later Review.

Financial Closure

Financial closure is the process of completing and terminating the financial and budgetary aspects of the project being performed. Financial closure includes both (external) contract closure and (internal) project account closure. The following sections describe some of the actions that must be taken to ensure financial closeout:

Project Account Closure

Project account closure is an internal process that formalizes the termination of a project for the staff within the agency. Without setting definitive dates and providing a formal process for closure, projects tend to live past their scheduled completion date. For instance, if a termination date is not set for a project, the project might continue indefinitely, allowing personnel to apply resources and labor against it. If this were to happen, a project would not be a project any longer, but could potentially turn into a program without a defined end date. Projects by definition have limited budgets and life- spans, so it is necessary to terminate them at some point.

Setting a Completion Date

Often projects have a completion date imposed upon them at their inception, which by nature makes that date the termination date for the project. The completion date for a project is the date that all project-related activities needed to produce the product should be completed. Beyond this date, there should be no need to apply labor or resources against the project because it will have been delivered or turned over to operations. Any further work done on the product beyond this date should be considered an operations and maintenance cost.

Closing Account Charge Codes

Most projects have account numbers associated with them that allow the financial departments to track labor hours and resource procurement. These labor charge codes will need to be deactivated so that no person may continue to charge time against the project or use the project charge codes to purchase materials, etc. Closure of the charge accounts should be formalized via a written request that the Project Manager turns over to the managing financial organization.

Contract Closure

Contract closure is the process of terminating contracts that outside organizations or businesses have with the agency as part of the project being performed. These contracts may be vehicles for providing technical support, consulting, or any number of services supplied during the project that the agency decided not to perform itself.

Contracts can be brought to closure for a variety of reasons, including contract completion, early termination, or failure to perform. Contract closure is a typical but important part of project management. It is a simple process, but close attention should be paid so that no room is left for the liability of the agency.

Collect Documentation

To close a contract, it is important to collect all of the pertinent documentation for review. This will include all of the original contracts and supporting documentation such as schedules, contract changes, and performance reports. This documentation needs to be reviewed thoroughly to ensure that there are no unrealized contract issues that could open up legal liability. For specific methods of contract closure please refer questions to the Contract Management Division.

The Financial Audit

The project audit is intended to determine where, in measurable terms, the actual costs of the project may have overrun or under-run and determine the cause of the variation. It is also an investigation into the ethical and financial responsibility of the staff involved with the project.

Because many state projects are funded through State taxes and appropriations, all of the project members must be held accountable to the highest degree of fiscal responsibility. Furthermore, the financial evaluation also provides an opportunity for project managers and agencies to learn where they can improve financially on the implementation of similar future projects.

Celebration of Success

One step of the Closeout Phase is the customer’s acceptance of the system. This is a critical step, as the customer decides when the project is completed. Acceptance is based upon the success criteria defined in the very early concept and planning stages of the project. This acceptance may be very informal or may be very formal, depending on the defined criteria. There are many ways to reward people for a job well done.

The reward might be an informal after-work gathering or a lunchtime pizza celebration. Organization management may also want to express recognition of a successful team effort by praising the team at a key meeting or a large gathering of staff. Team members are proud to have executive management state appreciation, and such recognition sets the stage for future successful work.


Project Closure Report

A Project Closeout Report documents the completion of closeout tasks and project performance. The report provides a historical summary of the project’s deliverables and baseline activities throughout the project. Additionally, the project closeout report identifies variances from the baseline plan, lessons learned, and disposition of project resources. The project closeout report is intended to provide a concise evaluation of the project.

The project manager typically has the responsibility of preparing the report. The project manager gets input from the entire project team, the customers, and other major stakeholders. People performing different functions on the project will have different outlooks on the successes and failures of the project and possible solutions. The Project Closeout Transition Checklist is used to guide the development of the report. Lessons learned sessions and the User Acceptance Report are also used.

Establishing the date for a future post-implementation review of the deliverable is the final element of the closeout report. This data must be coordinated and agreed to by the organization and project manager. Typically, the project manager or project sponsor will conduct a project implementation review after the deliverable has been in service for some time adequate for evaluation of the product or service’s successful integration into the business. Typically, a six-month period is adequate.

Instructions

General Information

Basic information that identifies the project.

  • Project Title – The proper name used to identify this project.

  • Project Working title – The working name or acronym used to identify the project. If an acronym is used, define the specific meaning of each letter.

  • Proponent Secretary – The Secretary to whom the proponent agency is assigned or the Secretary that is sponsoring an enterprise project.

  • Proponent Agency – The agency that will be responsible for the management of the project.

  • Prepared by – the person(s) preparing this document.

  • Date/Control Number – The date the report is finalized and the change or configuration item control number assigned.

Project Deliverables

List all product or service deliverables in the first column. In the second column record the date that each deliverable listed in the first column was accepted. Describe any contingencies or conditions related to the acceptance of the deliverables listed in the first column.

Performance Baseline

Evaluate how the project performed against each of the performance goals established in the Project Performance Plan. Copy the first two columns from the Project Performance Plan. In the third column, record the results of the measurement of performance prescribed in the Project Performance Plan.

Cost (Budget) Baseline

State the actual cost of the project and compare it to the planned cost baseline. In the Variance column, record the difference between planned and actual costs. Provide the reason for the variance in the Explanation column. Include in the explanation information on any approved changes to the cost baseline and their impact on the project. Document and explain all cost and funding variances, including approved changes to the cost baseline.

Schedule Baseline

Compare the initially approved schedule baseline against the actual completion dates. Extract the WBS Elements, Start Dates, and Finish Dates from the baseline schedule and record them in the WBS Element, Planned Start Date, and Planned Finish Date Columns. Record the Actual Start Date and Actual Finish Date for each WBS element in the columns with those headings. In the Explanation for Change column, provide a brief reason for any difference(s) and describe the impact on the project.

Scope

Document any changes to the project scope and describe the impact of each change on performance, cost, or schedule baselines in the appropriate column.

Operations and Maintenance

Describe the plan for operation and maintenance of the product, goods, or service delivered by the project. State the estimated annual cost to operate and maintain the product, good, or service. If the estimated cost differs from the original cost estimate in the project proposal, identify where and why the estimated cost differs.

Project Resources

List the resources used by the project in the first column. In the second column, identify to whom the resource was transferred. In the next column, indicate when the resource was transferred. Account for all project resources specified in the Resource Plan and utilized by the project.

Project Documentation

Identify all project documentation materials stored in the project library or other repository. Identify the type of media used and the disposition of the project documentation (see Communications Plan).

Lessons Learned

Identify lessons learned for feedback to the Commonwealth Project Management process. Lessons learned are identified as problems (or issues). Provide a brief discussion of the problem that identifies its nature, source, and impact. Site any references that provide additional detail. References may include project reports, plans, issue logs, change management documents, and general literature or guidance used that comes from another source. Record the corrective actions taken and results in the last column.

Dates for Post-Implementation Review and Report

Identify the date for completing the post-implementation report and the person responsible for this action.

Approval

The person(s) making the report authenticates its contents by signing as appropriate.

Templates

General Information Template

Provide basic information about the project including:

  • Project Title– The proper name used to identify this project;

  • Project Working Title– The working name or acronym that will be used for the project;

  • Proponent Secretary– The Secretary to whom the proponent agency is assigned or the Secretary that is sponsoring an enterprise project;

  • Proponent Agency– The agency that will be responsible for the management of the project;

  • Prepared by– The person(s) preparing this document;

  • Date/Control Number– The date the report is finalized and the change or configuration item control number assigned.

Project Deliverables Template

List all Project Deliverables and the date each was accepted by the user. Identify any contingencies or conditions related to the acceptance.

Performance Baseline Template

Document how the project performed against each Performance Goal established in the Project Performance Plan.

Cost (Budget) Baseline Template

State the Planned Cost and Funding for the project, as approved in the Initial Cost Baseline and the Project Charter. State the Actual Cost and Funding at completion. Document and explain all cost and funding variances, including approved changes to the cost baseline.

Schedule Baseline Template

Compare the initially approved schedule baseline against the actual completion dates. Enter the planned start and finish dates from the initial schedule baseline. Document all actual start, and finish dates, and explain any schedule variances, including approved changes to the schedule baseline.

Scope Template

Document any changes to the Project Scope and their impact on Performance, Cost, or Schedule Baselines.

Operations and Maintenance Template

Describe the plan for operation and maintenance of the product, good, or service delivered by the project. State the projected annual cost to operate and maintain the product, good, or service. Identify where and why this projection of cost differs (if it differs) from the Project Proposal. If the operation and maintenance plan is not in place, what is the target date for the plan and what is the impact of not having operations and maintenance for the product, goods, or services in place?

Project Resources Template

List the Resources specified in the Resource Plan and used by the project. Identify to whom each resource was transferred and when it was transferred. Account for all project resources utilized by the project.

Project Documentation Template

Identify all project documentation materials stored in the project library or other repository. Identify the type of media used and the disposition of the project documentation (see Communications Plan).

Lessons Learned Template

Identify Lessons Learned for feedback to the Commonwealth Project Management process. Lessons Learned should be stated in terms of Problems (or issues) and Corrective Actions are taken. Provide a brief discussion of the problem that identifies its nature, source, and impact. Site any references that provide additional detail. References may include project reports, plans, issue logs, change management documents, and general literature or guidance used that comes from another source.

Dates for Post-Implementation Review and Report Template

Identify the date for completing the post-implementation report and the person responsible for this action.

Approvals Template


Project Termination

Project success means that the project has met its cost, schedule, and technical performance objectives and has been integrated into the customer’s organization to contribute to the customer’s mission. Project failure means that the project has failed to meet its cost, schedule, and technical performance objectives, or it does not fit in the organization’s future.

Project Termination Reasons :

  • The project results have been delivered to the customer
  • The project has overrun its cost and schedule objectives
  • The project owner’s strategy has changed
  • The project’s champion has been lost
  • Environmental changes that affect the project
  • Advances in the state of the art hoped for in the project have not been realized
  • The project’s priority is not high enough to survive in the competition

Projects are terminated due to two reasons: Emotional and Intellectual. Emotional reasons are started by the staff or client. The staff and client at the planning stage of the project realized that the project goals or objectives may not be achieved; hence it is the right stage to terminate or not go ahead with the project. There is a chart indicating the basic reasons for project termination.

Termination Strategies

During termination, some senior managers will replace the project manager with an individual who is skilled at closing out projects. He then will conduct reviews to determine the status of the work packages In addition he has to:

  • Ensure that all project deliverable end products have been provided to the project owner.
  • Review the status of all contracts
  • Work with the project team in developing and distributing a closeout plan
  • Maintain ongoing surveillance of the closeout activities
  • Notify relevant stakeholders of the termination
  • Ensure that all financial matters on the project have been satisfactorily terminated
  • Assist members of the project team to find other work in the organization
  • Prepare the project history, particularly a ”lesson learned” report
  • Conduct a post-completion audit of the project to identify strengths and weaknesses in the management
Article Source
  • Buttrick, R. 2000. The Interactive Project Workout. London: Prentice Hall/Financial Times.

  • Gray, C. F. and E. W. Larson. 2000. Project Management: The Managerial Process. Boston: Irwin McGraw-Hill.

  • Keil, M. 1995. Pulling the Plug: Software Project Management and the Problem of Project Escalation. MIS Quarterly (December): 421– 447.

  • Meredith, J. R. and S. J. Mantel, Jr. 2000. Project Management: A Managerial Approach. New York: John Wiley & Sons.

  • Nicholas, J. M. 1990. Managing Business and Engineering Projects: Concepts and Implementation. Upper Saddle River, NJ: Prentice Hall.

  • Project Management Institute (PMI) 2008. A Guide to the Project Management Body of Knowledge (PMBOK® Guide). Newtown Square, PA: PMI Publishing.

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