Project closeout (closure)

Introduction:

The project is a “temporary endeavor undertaken to create a unique product, service, or result.” (Project Management Institute., 2013, p3). Therefore, any project should be closed whether it is completed or terminated (Sanghera, 2010, p378). However, in all cases the project closure should be documented probably as mentioned by Sanghera, (2009, p330) to formally close the project.

Reasons to close a project:

The first logical reason to close the project is when the project is completed. Furthermore, the closure process could be performed for a portion of the project like phases, zones …etc. In the other hand, project closure could be performed due to project termination (not completed project) as stated by Sanghera, (2010, p377) and as per the following:

• Project management plan is not approved.
• No more resources to complete the project.
• There is no market need for the project anymore.
• The contractor is way behind the schedule.
• Public or environmental issues stopped the project.

Differences between closing and terminating a project:

Both completed projects and terminated projects will perform the Project closeout procedure. However, the procedure itself vary from completed project to terminated project as per the following:

Completed Project closure process:

• Verify the scope, and all deliverables have been provided and accepted.
• Perform testing and commissioning.
• Secure project warranties, certificate of, maintenance manuals, and local authority’s approvals.
• Release the final payments, retentions, and get client final acceptance.

Terminated Project closure process:

• Measure the executed works.
• Evaluate the losses for both parties (client and contractor).
• Handover the uncompleted works to the client.
• Could involve penalties, or despites resolving.

Administrative and Contract Closure

Administrative Closure is the process of closing the whole project. Reference to Project Management Institute., (2013, p4) closing the project involves satisfy completion, transfer the project’s products, services, or results to the next phase, collect project or phase records, gather lessons learned and archive project information for future use by the organization.

Contract closure refers to close the procurement part of the contract. Sanghera, (2010, pp375, 376) refers to two activities when performing closure. “Close the in-house activities of the project, and Close the procurement part of the project.” Furthermore, Kerzner, (2009, p862) referred to contract closure to be performed by contract administrator to verify that the work produced are acceptable to the buyer. He recommend to perform the contract closure prior to the administrative closure.

My experience:

I was involved on a project where the company did not have the required resources to execute the project within the planned duration. Accordingly, the project recorded unrecoverable delays. And as a result, the client terminated the contract as per the contract general condition conditions.

Another example of terminating a project due to public and environmental issues, Ahmed Feteha (2011) wrote the story of a “Canadian fertilizer company Agrium signed a deal with the Egyptian government to build a factory for the manufacture of ammonia-based fertilizers in Ras El-Bar.” This project was terminated due to the citizen’s fear of the pollution results from the factory. Although, the contract was going perfect, and on schedule, but the external factors forced the government to terminate the project.

Conclusion:

Project need to be closed. Whether it is successfully completed, terminated, or affected by external factors. The closing process could vary depend on the closure situation. However, in all cases the project closure process should be documented to formally close the project.

References:

AHMED FETEHA, 14 Nov 2011, 2011-last update, Five years on, Damietta’s Agrium controversy reignites [Homepage of Ahram Online], [Online]. Available: http://english.ahram.org.eg/~/NewsContent/3/12/26480/Business/Economy/Five-years-on,-Damiettas-Agrium-controversy-reigni.aspx [Feb 25, 2014].

PROJECT MANAGEMENT INSTITUTE., (2013). A guide to the project management body of knowledge (PMBOK® guide). Newtown Square, Pennsylvania: Project Management Institute, Inc.

KERZNER, H., (2009). Project management [electronic book] : a systems approach to planning, scheduling, and controlling / Harold Kerzner. Hoboken, NJ : John Wiley & Sons, 2009; 10th ed.

SANGHERA, P., (2010). PMP in depth, second edition : project management professional study guide for the PMP exam / Paul Sanghera. Australia ; Course Technology/Cengage Learning, 2010; 2nd ed.

Sanghera, P. (2009) 90 days to success as a project manager, University of Liverpool [Online]. Available from: http://www.liv.ac.uk/library/ohecampus/search/ebooks.htm (Accessed: 26 April 2014).