Close-Out Profit Leaks Part 3

July 19, 2004

How to Stop the Project Close-Out Profit Leaks!

By: John Zink


Managing the Owner Walk-Through

When you are doing the final walk-through with the owner, be sure to have an extra member of your team there to videotape the meeting.

  • At the beginning of the walk-through, be sure to catch each person present on video & identify them by name if possible.


  • During the walk through, look for the installations your company did and make sure you capture as much of those systems on tape as possible, even if they are not talked about in the walk-through. You want to be able to see how each system looked in its original condition.


  • Be sure that your company representative doing the talking is clear and detailed in his or her explanations of maintenance issues and what the owner needs to do to keep the equipment functioning properly.


  • Give one copy of the video to the owner, one copy to the building maintenance staff and keep a copy for yourself.

Videotaping your walk-through will:

  • Prove that you did do the walk-through.


  • Provide evidence as to who was present at the walk-through.


  • Help to prevent service calls that are actually maintenance issues. You can prove that you told the owner that something had to be done to keep the system running. If it hasn’t been done, it is not covered under warranty.


  • If the building maintenance person leaves, the owner can give a copy of the tape to the new person so that they know what has to be done.


  • If you are providing service to the building, your employee can take a look at the copy of the tape that you kept to see what conditions are onsite and can bring the proper tools and supplies for the job.

Early Start-Up

Sometimes the owner will want to start using some of the equipment you have installed before the job is complete. If the job goes on for six more months, the owner might try to tell you that your warranty starts when the whole project was completed, not six months ago when they started the equipment up. If you allowed this to happen, you just paid for an extra six months of warranty coverage for the owner out of your own pocket.

If an owner wants to start up some of your equipment before the job is complete, you must first issue a letter, (certified, return receipt) detailing that once your equipment is started for the first time OR on a date that you set, their warranty period has begun. If your company does service on the installations you do, detail in the letter that maintenance issues will not be covered under warranty, but can be covered under a service plan. Make sure you include a service agreement with this letter.

By issuing this notice to the owner, even if they do not respond to it, you have given them proper notice about the warranty coverage. If you get a call from the owner nine months after the building has been occupied (15 months after your equipment was started) about a problem with some of the equipment you installed, you can prove that they are out of the warranty period and offer to correct the problem at your normal service call rates.

Check the next article for tips on how to avoid restocking fees and how to avoid post-job charges that can eat away at your profits.


Visit the Facts & Stats Archive for Links to past articles.

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