Project Management Unit 13

Unit 13 Project Close-out, Termination and Follow-up

Structure:
13.1 Introduction
Objectives
13.2 Project Close-out
13.3 Steps for Closing the Project
Finishing the remaining work
Get client acceptance of the deliverables
Contractual aspects and final accounting
Update and archive all documents
Conduct post-implementation audit of the project
Prepare final project report
Release all resources – materials, equipment, and people
Organising closure meeting
13.4 Project Termination
13.5 Project Follow-up
13.6 Summary
13.8 Terminal Questions
13.9 Answers
13.10 Case Study

13.1 Introduction
In the previous unit, we dealt with project execution, project control process,
and purpose of project execution and control. The unit also discussed about
the key tools and techniques for an effective project control. In this unit, we
will deal with project close-out, steps for closing the project, project
termination, and project follow-up.
The project close-out phase is the last phase of any project. It is often
neglected as the excitement and enthusiasm level of people is low.
Nevertheless, it is an important phase. It brings the project to an orderly
close with lots of benefits to the organisation and also for any future project.
It is to be remembered that no one remembers effective start-up, but
everybody remembers an ineffective closure, Frigenti et al quotes Turner.
This phase covers a number of activities including completing unfinished
activities, getting client acceptance of deliverables, updating and archiving

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documentation, conducting post-implementation audit, preparing the final

report, releasing all the resources, and organising the closing meeting.
Objectives:
After studying this unit, you should be able to:
 recognise the aspect of project close-out
 identify the key steps for closing the project
 state the key reasons of project termination
 describe the project follow-up

13.2 Project Close-out

The project is almost complete! Before it can be
declared finished, however, a number of activities
must take place and several responsibilities must be
fulfilled. Many contractors are guilty of putting too little
emphasis on this final phase in the construction
project life cycle, choosing instead to look beyond
the end of the current project and on to the next project.
The very familiar English saying "last but not least" best illustrates how
important the project closeout phase is. Project Close-out is the final stage
of the project life-cycle and it is mostly ignored by large organisations, in
particular when they operate in multi-project environments. They learn to
switch from one project to another and complete the finishing of each project
as time and resources are costly. Subsequently projects keep deteriorating
and organisations take no counteractive actions, simply for the reason that
they do not have the time to consider what went wrong and what should be
fixed next time. A lesson that is learned can be discussed at project reviews
as part of the closeout phase. Moreover closure also deals with the final
details of the project and presents a normal ending for all procedures, which
includes the delivery of the final product.
The project closeout and termination phase can be thought of as a project
unto itself. Often termed commissioning, this phase must be planned and
programmed, tasks must be assigned, the phase must be executed
effectively and its costs, schedule and quality must be controlled. On large
projects, a specialist team is often engaged to assure that project closeout is

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carried out in the best manner possible. We have chosen to divide the tasks
into two categories: (1) completing the work, which includes the physical
activities that must be accomplished on the site and (2) closing out the
project, involving the multitude of required documents and other paper work
issues, some related obviously to finances but others to certificates, project
records and provision to the owner of the required training, operational
information, spare parts and the like. The two categories overlap and
interact. The presentation in each category is generally in the order in which
the activities occur on the project, although many activities take place
concurrently.
Most frequently project managers identify when to finish a project but they
overlook how to do it. They are so willing to complete a project that they
hardly miss the completion indicators. "Ideally, the project ends when the
project objective has been attained and is ready to hand over to customer".
At the boom and bubbles period, senior management can instruct the
immediate termination of costly projects. A quality example of that is
Bangkok's over investment in construction of sky-scrapers, where most of
them left abandoned without finalising the last floors because of enormous
costs (Tvede, 2001, p267). Those projects that are greatly attached to time
can be terminated earlier than normal finishing point if they miss a critical
deadline, such as an invitation to tender.
Several behavioural grounds for untimely termination is added by Kerzner
(2001, p594) such as "poor morale, human relations or labour productivity".
The aggressive nature of premature termination is also known as 'killing a
project' since it "entails serious career and economic consequences" (Futrel,
Shafer D & Shafer L, 2002, 1078). Assassination a project can be a hard
decision because emotional concerns create satisfaction within an
organisation and a fear of being viewed as quitters blurs managerial
decisions.

13.3 Steps for Closing the Project

To make sure that the project is completed and finished in a proper manner,
a sequential process should be followed. Therefore, the steps involved in
the sequential process in the project closure include the following
subsections:

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13.3.1 Finishing the remaining work

As the project nears completion, the project manager tends to relax and
keeps out of meeting, out of sight, and out of focus. The team members
follow the lead and relax as well. As a result, commitment to the project gets
affected. Figure 13.1 depicts the graph of commitment to project vs. action
of project manager and team members given by Philips.

Team member
action

Commitment to
project

Project manager
action

Fig. 13.1: Graph of Commitment to Project vs. Action of Project

Manager and Team Members
Source: Mishra Rajendra (2012), Project Management: Excel Books, New Delhi

Further, there is a tendency for the members to do the work directly related
to meet time and quality standard, while leaving a number of small work
outstanding.
Besides, many issues crop up during the various stages of a project and
some of them remain unresolved. For proper closure of the project, such
tasks and issues are to be listed and a network may be drawn to complete
them.

13.3.2 Get client acceptance of the deliverables

The first task of a project manager is to prepare a
checklist of all activities which must be completed
before we seek acceptance of the deliverables.
A typical list may include the following:
 Unfinished non-critical work
 The project tasks based on the WBS
 The deliverables
 Quality standard attained
 Installation, testing, and validation of equipment/process

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 Documentation manuals
 Operating procedures
 Training of users
 Compliance of provision of drawing and specification
 Outstanding issues to be resolved
In formal acceptance, each activity is to be checked with reference to the
performance specifications jointly by the project team representative and the
authorised representative of the client and accepted. Once an agreement is
reached on all activities, the project manager may proceed with other tasks
leading to the final close-out meeting.
13.2.3 Contractual aspects and final accounting
All contractual commitment to clients, vendors, and
suppliers are settled. Also, the final project accounting is
carried out. The final accounting includes totalling the cost
and revenues, producing the final cost evaluations and
reports, paying all accounts, and closing the project’s book.
13.3.4 Update and archive all documents
A project generates substantial volumes of documents, and it is essential
that these are collated and filed for future use. However, this task is
monotonous and least exciting.
Why project documentation?
 Reference for future changes in deliverables such as features to be
added/deleted
 Historical record for estimating the duration and cost on future projects,
activities, and tasks
 Training resource for new project managers/existing managers
 Input for performance evaluation by the functional managers of the
project team members
 Basis for settling any future questions/disputes that may arise from the
project
 Basis for any future team to identify, control, audit, and account for
historical project information

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Contents of project documentation

The contents of project documentation may include:
 Originating documents (business case, project proposal)
 Definition and planning schedules and documents
 Performance and information documents (cost reports, performance
evaluation reports, audits, minutes of meetings)
 Contractual documents
 General correspondence (memos, letters, electronics communications,
faxes)
 Accounting and cost information
 Change control documents (Variation in orders, change control register)
 Technical documents (specifications, drawings)
 Procurement documents (purchase orders, quotations, brochures)
The documentation can be stored in various media (Video, photographic,
electronic, and paper).
13.3.5 Conduct post-implementation audit of the project
Valuable experience and information are gained during
the various phases of a project. The Post-
Implementation Review (PIR) is to reflect on the events
that took place in the course of the project and identify
what went well, what did not, and then ask why and
consider what might have been done differently to
improve the performance.
Why post-implementation audit?
 To learn from experience to evolve better management practices
 To assess the actual benefit of the project against plan
Evaluate what?
Wysocki suggests, following six important questions to be answered during
the review:
 Was the project goal achieved?
 Was the project work done on time, within budget, and according to
specifications?
 Was the client satisfied with the project result?
 Was the business value realised? The value may be in terms of return
on investment, market share, etc.

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 What lessons were learned about your project management

methodology?
 What worked? What did not?

Methodology
Post implementation review may be carried in two stages – a lesson learnt
review immediately after completion of the project when project team has
actual events of the project fresh in their minds and post-implementation
review some months after project has been in operation when the benefits
can be more accurately assessed.
Further, a PIR can be conducted as a formal audit or as a workshop
involving the project participants. The participants may include project
sponsor, members of the team (including suppliers and subcontractors), and
future project manager. For an honest review, it is imperative to create a
climate of trust and fearlessness. Here, the aim is not to find fault or
apportion blame. Finger pointing and reprimanding serve no purpose. Focus
should be on what has gone wrong and why; and not who has done wrong.
Knutson suggests the following points while conducting a PIR:
 Establish clear and explicit ground rules about openness and
communications. For example, each person will speak for himself. Every
one need not agree to the other’s view, participants will listen to the
others respectfully.
 Focus of the review is on what happened and not on perception.
 Concentrate on extracting lessons for future, rather than establishing
blame for what has happened in the past.
The results of PIR should be communicated to everyone who needs to know
what happened. A copy of the report should be archived.
Activity
Prepare a project closure checklist for the project of constructing a new
educational wing for primary section of a school.
13.3.6 Prepare final project report
The final Project Report (PR) should be written by the project manager
himself. The PR should present project evolution, its success, its
management, any outstanding and team recommendation.

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Frigenti et al quotes Meredith and Mantel on the intents of the project final
report as, “The final report is not another evaluation, rather it is the history of
the project. It is the chronicle of the life and times of the project, a
compendium of what went right and what did not, who served the project in
what capacity, what was done to create the substance, and how it was
managed”. The contents of the final report presented by various authors
differ widely. Based on these, the suggested contents of a final PR are given
below:
 Evolution of project: Narrate the various activities undertaken from
project selection, planning, execution, control, and termination phase;
problem faced, what went well, what did not, and why.
 Overall success of the project: Some typical criteria to measure the
overall success of the project are given below:
o Business objectives: Restate the business objectives as given in
the business case including any changes incorporated later.
Comment on how far these objectives have been or likely to be met.
o Project efficiency: State the actual cost, resource, and schedule
against the plan as shown in the table 13.1:
Table 13.1: Project Efficiency Chart
Cost (Lacs of Rs.) Human Resource (Man days) Schedule (days)

Original
baseline

Actual

Variance

 Closure statement: State the circumstances under which the project is

being closed as one of the following:
o The project has been successfully completed.
o The project has been terminated prior to the completion. In this case,
describe the reason for termination.
 Outstanding issues and deliverables: List any issues or key
deliverables not yet accepted. For each, give:
o The nature of the issue and reason of non-acceptance
o Proposed resolution (include date, person responsible)

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 Managing of projects: How the project’s different phases were

managed? Specifically, comment on the following aspects:
o Quality of decision making (fact based, timeliness, etc)
o Use of tools/techniques in selection, planning, and control phase
o Use of best practices

 Lessons learnt and recommendations: A number of insight and

innovative methods have been adopted in tackling the various problems.
These should be recorded for posterity. Specifically, the following
aspects are to be covered:
o What worked well and why?
o Recommend methods, processes, procedures, best practices, and
tools which can be gainfully used in the future.
o Identify the areas where time, money, or resources could have been
better utilised.
 Acknowledgement: Acknowledge all the individuals who have made
special contributions to the project.
13.3.7 Release all resources – materials, equipment, and people
On completion of the project, all resources – materials, equipments, and
people – are to be released from the project. Equipment and materials are
simply released to stores or suppliers. But release of people needs special
attention. People have made significant contribution to completing the
project. This should be kept in mind while reassigning assignments to them.
Usually they can be returned in any of the following manner:
 They may be absorbed in the client’s organisation
 They may be reassigned jobs in the organisation and department from
which they were borrowed
 They can be simply let off
Early communication about reassignment of people is helpful. In any case,
the project manager should ensure that the people are released in a fair and
proper manner.
13.3.8 Organising closure meeting
Once the project manager is satisfied that the project is complete in all
respects, he or she fixes a date in consultation with other stakeholders to
organise the closure meeting. The primary objectives of this meeting are:
 Get formal agreement of the sponsor

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 Recognise the specific individuals and the team for making valuable
contribution
 Acknowledge the contribution made by all
 Formally close the project
A typical Agenda for the closure meeting is given below:
 Welcome by project manager
 Summary of the project including major achievement, business benefits,
major obstacles faced, impact of project on stakeholders, and lessons
learnt.
 Outstanding issues: Review outstanding issues, indicate persons who
will resolve the issues.
 Post-implementation review: Indicate the terms of reference, persons
accountable, team members, and time table.
 Recognition of team members: Recognise the specific contributions
made by individuals and team and present awards to them.
 Formal acceptance: Get formal acceptance of the sponsor by signing
the certificate of acceptance.
 Acknowledgement and formally closing the project: Thank the
customer, sponsor, stakeholders, and team for their effort and
contributions to achieve a success. Declare the project as closed.
After the closure meeting
 Finalise the project closure report
 Prepare a communication enclosing the approved closure report to the
sponsor, project team, and stakeholders, confirming the decision to
close the project
 Feedback any suggested process improvement to the relevant project
office and/or process support group

Self Assessment Questions

1. The ______________ phase is the last phase of any project..
2. A PIR can be conducted as a formal audit or as a workshop involving
the project _________________
3. On completion of the project, all resources – materials, equipments,
and people are to be released from the project. (True/False)
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4. The final Project Report (PR) should be written by a professional.

(True/False)
5. The project manager should ensure that the people are released in a
fair and proper manner. (True/False)

13.4 Project Termination

Project termination is one of the most serious decisions of a project
management team and its control board. The decision of project termination
affects all the stakeholders of the project and can put some negative impact
on the organisation’s growth. So it is important to critically evaluate all the
aspects before taking the decision. The project manager and his or her team
members will feel that they personally failed. It can also put a negative
impact on the team member’s motivation level and their productivity.
The following are the key reasons to terminate a project:
 Technological reasons
 Results of project requirements or specifications are not clear or
impractical
 Fundamental change in project requirements or specifications, so that
the underlying contract cannot be changed accordingly
 Lack of project planning, especially risk management
 The planned result or product of the project turn into obsolete, is not any
longer needed
 Sufficient human resources, tools, or material are not accessible
 The increase in project cost leads lower profit than expected
 The parent organisation do not exist longer
 The change in strategy of parent organisation, leads towards the project
does not support the new strategy
 Essential conditions disappear
 Lack of management support
 Insufficient customer support

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Activity
You are a project manager in an IT company working on a project of
developing new software to stop hacking. Because of technical and
competitive reasons your project looses its significance to a large extent.
Will you terminate the project or continue with it. Justify your answer with
suitable reasons.

Strategy to avoid the negative impact of project termination

The following are the key strategies that should be followed to avoid the
negative impact of project termination decision:
 There should be a clear strategy for project termination, and it should be
communicated to all the stakeholders
 The criteria of project success and termination should be clear and
communicated to every stakeholders
 High level management attention, even for smaller projects, and in times
when everything seems to be on track
 There should be periodical review meetings with the control board
before taking the decision
 There should be open discussions with the control board about the
problems and possible solutions or alternatives, including termination
 There should be a clear commitment of control board and high level
management towards the project management team in order to enable
the team to follow the project closure procedures
 Upon successful termination, the project manager and his or her team
should be appreciated for regular project closure

Self Assessment Questions

6. The decision of project termination affects all the ____________ of the
project and can put some negative impact on the organisation’s growth.
7. There should be a clear ___________ for project termination, and it
should be communicated to all the stakeholders.
8. There should be periodical __________ with the control board before
taking the decision.

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9. The ___________ of project success and termination should be clear

and communicated to every stakeholder.
10. In case the project has to be terminated, there should be a clear
commitment of control board and high level management towards the
project management team in order to enable the team to
____________ the project closure procedures.

13.5 Project Follow-up

Traditionally, this stage is considered as a part of project completion phase
but now it is considered as a separate phase of project life cycle. This is
particularly so in very political environments, and/or where project benefits
have relatively low visibility and meaning to stakeholders (staff, customers,
investors, etc), especially if the project also has very high costs.
For example, ICT (Information and Communications Technology) projects
often are like this – low visibility of benefits but very high costs, and also
very high stress and risk levels too.
After delivery or completion of the project, the staff performance has to be
evaluated. The tasks involved in this phase are:
 Documenting the lessons learnt from the project
 Analysing project feedback
 Preparing project execution report
 Analysing the problems encountered during the project
Self Assessment Questions
11. Traditionally project follow-up stage is considered as a part of project
______________ phase.
12. After delivery or completion of the project, the ___________ has to be
evaluated.
13. ____________________ projects often have low visibility of benefits
but very high costs, and also very high stress and risk levels too.

13.6 Summary
Let us recapitulate the important concepts discussed in this unit:
 The project closeout and termination phase can be thought of as a
project unto itself. Often termed commissioning, this phase must be

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planned and programmed, tasks must be assigned, the phase must be

executed effectively and its costs, schedule and quality must be
controlled.
 The closing phase covers a number of activities including completing
unfinished activities, getting client’s acceptance of deliverables, updating
and archiving documentation, completing post implementation audit,
preparing final report, releasing all resources, and organising closing
meeting.
 Updating and archiving documents provides a wealth of information/data
for making changes in deliverables, managing future projects, organising
training, performance evaluation, and setting any future disputes.
 Post-implementation audit is helpful for learning from experience to
evolve better management practices and to assess the actual benefits
against the plan.
 Besides many things, over all reports contains innovative ideas to deal
with complex issues which will be helpful for posterity.
 Finally, closure meeting give the opportunity to recognise the good
efforts put in by individuals and team. This helps in motivating the team
members and allows them to part in a positive frame of mind.

13.7 Glossary
Completion: Project objectives have been achieved.
Convenience: It is a situation where there exists no longer requirement to
achieve project objective due to reasons including changing market
conditions, steep rise in project cost, constrained critical resources, new
technology, opportunity cost, etc.
Default: The project fails to achieve the franchised objective due to
unsatisfactory performance, poor quality, violation of contract, legal
violation, etc.
Post-Implementation Review (PIR): It is the reflection on the events that
took place in the course of the project and identifies what went well and
what did not and then ask why and considers what should have been done.

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13.8 Terminal Questions

1. Briefly discuss the steps to close the project.
2. Discuss the methodology of conducting a post-implementation review.
3. Discuss the major contents of the project’s final report.
4. Discuss the primary objectives of closure meeting.
5. What could be the reasons for project termination?
6. Write a note on project follow up.

13.9 Answers

Self Assessment Questions

1. Project close-out
2. Participants
3. True
4. False
5. True
6. Stakeholders
7. Strategy
8. Review meetings
9. Criteria
10. Follow
11. Completion
12. Staff performance
13. ICT (Information and Communications Technology)

Terminal Questions
1. It includes completing unfinished activities, getting client acceptance of
deliverables, updating and archiving documentation, conducting post
implementation audit, etc. For more details, refer to section 13.3.
2. Post-implementation review may be carried immediately after the
completion of the project. For more details, refer to section 13.3.5.
3. It should present project evolution, its success, its management, any
outstanding, and team recommendation. For more details, refer to
section 13.3.6.
4. The key objectives include getting formal agreement of the sponsor,
recognising specific individuals and the team for making valuable
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contribution, acknowledging the contribution made by all, and formally

closing the project. For more details, refer to section 13.3.8.
5. A project can be terminated because of technology failure, internal
conflicts, lack of management, customer support, etc. For more details,
refer to section 13.4.
6. A project follow-up is initiated to get the feedback of the project team
and to make a review of the project. For more details, refer to section
13.5.

13.10 Case Study

Reliance Petro Jamnagar Refinery Ahead of Schedule

For the June quarter, Reliance Petroleum Ltd. has overshot its budget by
Rs.1,390 crore for setting up the Greenfield refinery at Jamnagar.
The refinery project is expected to be completed ahead of the December
deadline. It has achieved 94% overall progress in implementing the project,
the company said in a BSE statement.

Reliance Petroleum is setting up the export-oriented refinery with a capacity

to process 580,000 barrels a day of crude. It is also setting up a 900,000
tonnes a year polypropylene plant.
Reliance Petroleum in the statement said, “As on June 30, the company has
utilised Rs. 25,515 crore for the project against a projected utilisation of
funds of Rs. 24,125 crore. The variation is mainly due to payments in
advance under project contracts for continued, efficient, and speedy
implementation of the project.”
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The company added that the project engineering, procurement, and

contracting activities have been completed for the refinery.

Pre-commissioning Activities
Construction activities are progressing rapidly to meet the pre-
commissioning requirements. Planning for project start-up is completed.
The statement said the pre-commissioning activities are proceeding at a fast
pace with necessary infrastructure facilities already under commissioning.
The company has mobilised sufficient resources to sustain the pre-
commissioning and commissioning activities on fast track.
The quarter witnessed a close-out of procurement and contracting activities
for equipment and bulk materials.
Deliveries of equipment are nearly complete. Deliveries of bulk materials
including pipes, fittings, electrical, and instrumentation bulks matched the
pace of equipment deliveries and their installation at site. Focus has now
shifted towards achieving a rapid close-out on this front, the statement
added.
1. Why Reliance Petroleum Ltd. has overshot its budget?
Hint: Reliance Petroleum Ltd. has overshot its budget in order to set a
new refinery and it makes advance payments for project under
contracts.
2. Why are the pre-commissioning activities are proceeding at a fast pace?
Hint: Pre-commissioning activities are proceeding at a fast pace since
necessary infrastructure facilities are already under commissioning and
equipment delivery is nearly complete.
Source:
http://www.thehindubusinessline.in/2008/07/23/stories/2008072351730200.html

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References:
 Clements/Gido, Effective Project Management, Publication: Thomson.
 Gray, C. F. and Larson, E. W. Project Management, Publication: Tata
McGraw Hill.
 Lock, D. Project Management, Ninth Edition, Publication: Gower.
 Nagarajan, K. Project Management, Third Edition, Publication: New Age
International.
 Chandra, P. Projects-Planning, Selection, Financing, Implementation,
and Review, Sixth Edition, Publication: Tata McGraw Hill.
 Rao, P.C.K. Project Management and Control, Publication: Sultan
Chand & Sons.
 Desai, V. Project Management, Second Revised Edition, Publication:
Himalaya Publishing House.

E-References:
 www.projectsmart.co.uk. retrieved on 14/02/2012
 www.projectmanagement.com. retrieved on 14/02/2012
 www.pmearth.com. retrieved on 15/02/2012
 www.sify.com/finance/reliance-petroleum-jamnagar-project-ahead-of
schedule-news-equity-jehboqicafe.html

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