Beginning with the End in Mind: How LAWA Digitalized Their Project Closeout to Eliminate One of the Greatest Risks to Project Success
By Brandi Heffner
September 15, 2021
In 2009, Los Angeles World Airports (LAWA) embarked on an ambitious 15-year modernization project at Los Angeles International Airport (LAX), including terminal renovations, new terminal and concourse construction, and runway and taxiway improvements. A US $17B capital project, the effort would comprise both terabytes of digital data and hundreds of binders containing reams of paperwork. How they chose to handle their challenges has defined their journey.
A Different Landscape
For general contractors and the project owners who hire them, what was already a challenging business environment only got more complex and fraught with risk with the onset of the COVID-19 pandemic. Yet this unprecedented turn also created an opportunity to accelerate what has become referred to as a digital transformation across the industry. Faced with the reality of social distancing and other safety protocols, the industry grappled with how to minimize risk to workers, as well as project schedules and costs. Digitalization offered a path to solving for all the above. In fact, alongside new production technologies, state-of-the-art materials, and new business models, digitalization of products and processes is one of the top predicted disruptions to the construction industry over both the near and long term.
Digitalizing project controls processes and data that support them can improve efficiencies, mitigate risk and improve margins. In every phase of the project life cycle, there is great potential. But not all phases are treated equally in a digitalized transformation initiative, and one phase often overlooked is closeout — that phase at the end when the project is officially handed over. Closeout formally ends the construction phase of a capital project and ensures the fulfillment of contractual and legal obligations before final payment is released to the contractor.
For contractors, the benefits of a successful closeout are obvious: they get paid and can move on to the next project. For owners, a successful closeout means they can start realizing the return on their investment instead of continuing to accrue costs.
In this vein, the efforts undertaken by Los Angeles World Airports (LAWA) are a perfect example of an industry compelled to reckon with forces beyond its control; namely, the “usual” challenges of regulation, small margins, highly complex projects, etc. compounded by a global pandemic.
By nimbly “hacking” its own project controls platform, LAWA was able to not only continue its massive renovations at LAX during a global pandemic, but it also realized significant time savings and productivity gains that can now be realized even more as the pandemic starts to wind down. Here’s how they did it.
It’s Not How You Start, It’s How You Finish
When a project is in the throes of construction, closeout is often the last thing on anyone’s mind. Between the constant shifts in crews, equipment and materials, it’s easy to overlook the end goal: not only delivering an on-time, on-budget project, but also a facility that’s ready for use, with complete documentation and everything the owner needs to feel comfortable signing the final check.
Closeout can be broken down into three areas of focus:
- Physical Closeout – finishing the work and validating it has met all completion criteria
- Administrative Closeout – ensuring all documentation has been compiled, verified and approved
- Financial Closeout – completing all contractual paperwork and financial transactions
Physical closeout is something no one can overlook, but the administrative closeout is often ignored until the last minute, thereby putting all the work that came before it — as well as financial closeout — at risk. Haphazard, or even missing, project documentation can pose a major threat to closeout, not only jeopardizing payment for the current project, but also adversely impacting the owner’s likelihood to hire the same contractor for a future project. Given profit margins are often in the single digits and a typical retainage is often 10% percent, cash flow and profitability immediately become a huge concern for contractors.
For owners, the impact of an incomplete or disorganized closeout may be less urgent, but often more costly. Owners need certainty that the project has been completed as agreed. They need to know the facility complies with all regulations and that it’s ready for operation. But more than that, an owner needs the documentation, knowledge and resources required to maintain and operate the facility safely and effectively. The impact of a poor closeout may not become apparent until years after the fact.
As projects get more complex, so do the closeout requirements. Understanding both the vast amount of information involved and the critical nature of documentation, LAWA developed processes and a digitalized platform to compile and organize the data generated during all phases of the project. When the COVID-19 pandemic hit during closeout of its midfield satellite concourse project, LAWA already had the foundation for ensuring closeout could continue, even while implementing the required social distancing and safety protocols.
Effective Project Closeout Offers Post-Build Efficiencies for Owners
While much attention has been paid to Building Information Modeling (BIM) technology, many think of it simply as a way to generate detailed digital 3D models. Useful, yes, but what’s the real impact?
Beyond using BIM for clash detection during the pre-build stage, creating more precise quantity and cost estimates, and modeling “what-if” scenarios to assess the impact of potential modifications, BIM improves collaboration by sharing detailed information in a common data environment, easily accessible during all stages of the product life cycle, including post-build and operations.
Even years later, building owners will be able to rely on the treasure trove of data within their BIM environment, common data environment and digital twin as part of their facilities management strategy. The integration of so much actual data into the model directly supports managing the facility itself, including routine preventive maintenance, and repairs to anything that becomes damaged or malfunctions. When facility staff have access to BIM data — from manufacturer warranties to material longevity to replacement costs — it increases their job efficiencies and helps them proactively control maintenance costs.
For owners such as LAWA — those who manage large campuses of multiple buildings — how BIM data is structured takes on paramount importance. Most closeout packages and checklists are developed from a contractor’s perspective: the need to compile contracts, change orders, as-built drawings, etc. on a building-by-building or project-by-project basis.
However, owners need the ability to roll up all the data into a more holistic view: by campus or facilities portfolio. Instead of each contractor handing off a “bundle” of the minimum amount of information to get paid, owners need a federated BIM environment with metadata, allowing them to aggregate each building’s model into a campus-wide view.
LAWA adopted this approach early in its LAX modernization project, leveraging best-of-breed technologies from multiple vendors. When confronted with the realities of COVID-19, they were ready the cBIM team already in action, had moved to “hack” its platform to switch from paper-based closeout procedures to remotely managing closeout via digitalization, eliminating the risk for document control specialists doing onsite visits.
A typical closeout checklist includes 12 required sections that must be signed off by the project manager before closeout is complete and payment can be made. In a paper-based system, closeout documentation would be delivered as numerous boxes of paperwork, which would end up stacked in a warehouse and not easily used by owners once the facility had gone into operation. With an integrated project data controls platform, like the one put into use by LAWA, the information is not only at an owner’s fingertips, but it can also easily be rolled up into a federated model, enabling the holistic view of an entire campus, regardless of when each building was constructed or renovated.
For LAWA, some of the benefits have already become clear. Traditionally the steps leading to project turnover can take up to a year. Time saved by entering data into LAWA’s BIM solution during the project — instead of at the end — speeds up the closeout and activation process by months.
For example, on the West Gates at Bradley project alone, the punch list included tens of thousands of items that had to be completed before closeout. The team was able to track and complete the vast majority of items — going from nearly 50,000 to less than 500 — in just eight months.
Since maintenance crews are brought in earlier in the construction phase, they understand the equipment and operations prior to the project turnover. And for LAWA, efficiencies are also gained since its BIM and asset management solutions use the same QR codes. Using BIM to capture detailed data throughout the project life cycle and then digitalizing the closeout process streamlines the transfer of information to facilities and maintenance at turnover. This approach ensures complete and accurate documentation in a standardized format that has been verified through the project closeout process.
Best Practices for Digitalizing Project Closeout
While all contractors and owners look forward to completion day, the final process of getting there is something no one enjoys. The closeout phase is rarely resourced adequately, often because the most highly skilled people have already left the project, contributing to both a brain drain and skills shortage. Closeout can turn into a critical failure point without the right tools in place to manage all aspects — operational, administrative and financial — of the effort.
A comprehensive closeout checklist is straightforward, with all contractors and owners having such a checklist in their back pocket, so we don’t need to address such a list in this paper. But with the advent of digitalization and BIM technologies, the checklist and process can be accomplished in a more effective way.
Like any other airport or large campus renovating or developing additional facilities with the support of numerous design and construction services providers, LAWA’s challenge has always been to create a complete as-built record of every facility on its campuses. Such a lofty goal requires rethinking the documentation collection, validation and delivery process, leading to a platform with the capability to:
- Manage a contractually binding owner’s standard
- Check and validate deliverables throughout the project design and construction phases
- Provide a single source of easily accessed, usable as-built information that’s continually updated
- Reduce risk of repeated as-built efforts and cost for the same location
- Maintain as-built data in its native file format for easy re-use
By their very nature, the above requirements demand a digitalized solution specifically built for the project controls life cycle, and LAWA had already adopted these requirements in building its project controls platform.
However, such a platform is only effective if it gets used daily from the very first phase of the project. As an owner, LAWA was able to drive adoption by requiring all design and construction service providers — even those who normally compete with each other — to be on a single platform. By starting with the end in mind — that is, a successful closeout — LAWA and its service providers now collaborate on a project controls platform that delivers benefits to both sides of what can otherwise turn into a contentious relationship.
While COVID-19 protocols may have accelerated LAWA’s ongoing digitalization of processes and documentation, it’s a direction the organization was already well prepared to take.
In the post-COVID-19 environment, the needs for remote collaboration and digitalized closeout are here to stay. Beyond the immediate benefits mentioned above, a digitalized closeout more closely aligns the interests of contractors, owners and any other project stakeholders.
While certainly at the cutting edge, LAWA is not alone in embracing digitalization. The construction industry overall is slowly but surely moving toward widespread adoption because the benefits are undisputable. While “digital transformation” may mean different things to different people, digitalization in construction is a highly beneficial disruptive trend. Greater access to more complete information leads to better data-driven decision making, both during construction and long after the project has been closed out.
When you’re ready, contact InEight for a demo of our integrated construction management software and see how we can streamline your processes and help you get the most out of your connected project data.
InEight gratefully acknowledges Los Angeles World Airports (LAWA) and Frank Peters, cBIM Program Manager, LAWA, in the creation of this article.
 The Next Normal in Construction: How Disruption is Reshaping the World’s Largest Ecosystem. McKinsey & Company, June 2020.