| Course | GM594 Project Closing, Ethics, and Professional Responsibilities |
|---|---|
| Unit | Unit 7 |
| Paper type | Contract closeout memo |
| Length | About 810 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | MS in Management |
| Updated | October 2026 |
Free sample paper for GM594 Unit 7
Release 209,220, Hold 18,800: A Unit 7 Contract Closeout Memo for a 911 Center's Backup Power
[Student Name]
Purdue University Global
GM594: Project Closing, Ethics, and Professional Responsibilities
Unit 7 Contract Closeout Memo
[Instructor Name]
[Date]
The emergency communications district, its contractors and every figure are composite and illustrative; the contract documents cited are real.
Memo
To: Finance Committee, Ridgeline Emergency Communications District From: Projects Manager Date: December 16 Subject: Closeout of the general contract for the backup power and cooling upgrade
Recommendation
Release $209,220 of retainage to the general contractor upon receipt of the two outstanding subcontractor lien waivers. Hold $18,800 until the eleven open punch items are complete. Reject the electrical subcontractor's claim of $38,600.
Contract Summary
The stipulated sum was $2,184,000. Approved change orders total $96,200, for an adjusted contract sum of $2,280,200. Payments to date are $2,052,180, and retainage held at 10 percent is $228,020.
Release Conditions
Under the AIA general conditions used for this contract, final payment is contingent on evidence that the contractor has paid its subcontractors and suppliers and completed the work (American Institute of Architects, 2017). The district's specifications list seven conditions.
Final lien waiver from the general contractor. Received December 12. Satisfied.
Final lien waivers from all six subcontractors. Four received. The fuel system and painting subcontractors' waivers are outstanding; the contractor expects both this week. Not satisfied.
Final inspections. The electrical inspection and the fire marshal's approval of the fuel tank are on file. Satisfied.
As-built drawings. Delivered December 10, except one alarm wiring sheet, which is on the punch list. Satisfied.
Operating and maintenance manuals. Delivered and accepted by the technical services manager. Satisfied.
Warranty certificates. Delivered for the generator, transfer switch, power supply and cooling units. Satisfied.
Punch list complete. Eleven items open, including the alarm wiring sheet, a missing bollard at the fuel tank and touch-up painting. Not satisfied.
Five of seven conditions are met, and the two that are not can each be covered by a specific hold rather than by keeping the whole retainage.
Why Hold $18,800
The architect estimates the eleven open punch items at about $9,400. The memo recommends holding twice that amount, $18,800, which gives the district enough to complete the work with another contractor if this one does not return, at the higher prices a small separate job usually carries. The release of the remaining $209,220 is conditioned on the two lien waivers, because paying before they arrive would leave the district exposed to liens by unpaid subcontractors.
The Subcontractor's Claim
The electrical subcontractor has claimed $38,600 for repeating the transfer and load bank tests after the first transfer test failed, covering load bank rental and two technicians for three days. The claim should be rejected. The first test failed because the subcontractor set the transfer switch's start delay at 6 seconds instead of the 1 second shown in the approved settings. The repeated tests were needed to show that the corrected work met the contract. Under the general conditions, the contractor must correct work that fails to conform to the contract documents and bear the cost of doing so, including the cost of additional testing (American Institute of Architects, 2017). The subcontractor's claim is, in substance, a claim for correcting its own work.
The Project Management Institute treats claims administration as part of closing procurement, and recommends that disputed claims be settled or formally rejected before the contract is closed, so that they do not linger as open obligations (Project Management Institute, 2021).
Effect on the Project Budget
Releasing the full retainage in two steps brings payments to the general contractor to the adjusted contract sum of $2,280,200, the figure already reported in the final project report. Rejecting the claim keeps the project's overrun at $131,400. If the committee instead paid the claim, the overrun would rise to $170,000 and would need a further draw on the capital reserve. Harold Kerzner notes that contract closure should reconcile every payment against the final contract value and record any disputed amounts explicitly, so the project's financial record is complete when the team disbands (Kerzner, 2022).
Obligations That Outlive Final Payment
Final payment does not end every obligation. The following survive.
Warranties. Five years on the generator engine, three on the cooling compressors and one on workmanship, with the start-date dispute between substantial completion and acceptance still to be settled before the final $18,800 is released.
The correction period. For one year after substantial completion, the contractor must correct work found not to conform to the contract.
Lien rights. Until the statutory period runs out, any unpaid lower-tier supplier could file a lien, which the waivers are meant to prevent.
The alarm wiring as-built sheet, which remains on the punch list.
The technical services manager holds the warranty register and will track each obligation after the contract closes.
References
American Institute of Architects. (2017). AIA document A201-2017: General conditions of the contract for construction.
Kerzner, H. (2022). Project management: A systems approach to planning, scheduling, and controlling (13th ed.). Wiley.
Project Management Institute. (2021). A guide to the project management body of knowledge (PMBOK guide) (7th ed.).
What the GM594 Unit 7 assignment asks for
GM594 Unit 7 asks you to write a memo closing out a construction or procurement contract. Open with the recommendation in a few lines, including amounts. Summarize the contract: original sum, approved changes, adjusted sum, payments to date and retainage. List the release conditions from the contract documents and say which are met. Explain any amount held and how you sized it, and condition releases on documents still outstanding, such as lien waivers. Address any disputed claim on its contract merits, with the clause that governs it. Show the effect of your recommendation on the project budget. Close with the obligations that survive final payment, such as warranties, correction periods and lien rights, and who will track them. Expect about five pages in memo form, citing the contract's general conditions and project management sources in APA 7.
How this GM594 Unit 7 example is built
The memo from the projects manager to the finance committee, dated December 16, recommends a conditioned release, a hold and a rejection. The contract summary runs from the $2,184,000 stipulated sum through $96,200 of changes to $228,020 retained. Seven conditions follow under the AIA general conditions: the contractor's waiver, four of six subcontractor waivers, inspections, as-builts except one sheet, manuals, warranty certificates and an open punch list, and the highlighted sentence explains why a partial release is safe. The $18,800 hold is twice the architect's $9,400 estimate. The $38,600 claim is rejected because the subcontractor's 6-second start delay caused the failure, citing the contract's correction of work provisions and the PMBOK guide on claims. Paying it would raise the overrun to $170,000, citing Kerzner on reconciliation. Warranties, the correction period, lien rights and the as-built sheet survive.
Reading the GM594 Unit 7 grading rubric
GM594 instructors grade this memo on accurate figures, conditions tied to the contract and a reasoned treatment of disputes. A recommendation with amounts in the opening earns early credit. The contract summary should reconcile from original sum to retainage. Release conditions should come from the contract documents, with each one's status. A hold sized with a reason, and releases conditioned on outstanding documents, show care for the owner's exposure. A disputed claim should be decided on the clause that governs it, not on goodwill. Showing the budget effect connects the memo to the final report. Listing obligations that survive final payment, with an owner, prevents rights from being forgotten. Citations in APA 7 cover the AIA A201 conditions on final payment and correction of work, PMI on claims and Kerzner on reconciliation.
GM594 Unit 7 help: mistakes that cost points
Many GM594 Unit 7 memos release all retainage once most work is done, without checking lien waivers or the punch list. Others hold everything over one dispute, which can breach payment terms. A common gap is the claim: deciding it on relationships rather than on the contract's allocation of risk invites later challenge. Some writers treat final payment as the end of every obligation. Lead with the recommendation, reconcile the contract figures, list conditions from the documents, size any hold with a reason, condition releases on missing paperwork, decide claims on their clauses, show the budget effect and list surviving obligations.
Get a GM594 Unit 7 example written to your instructions
Closeout memos turn on contract terms, so include the agreement or its key clauses, the payment record, any open claims and the Unit 7 prompt and rubric. Release recommendations, calculated holdbacks, a decision on each dispute and a register of surviving obligations make up the memo. Free for the first sample; 24-48h. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
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GM594 Unit 7 questions, answered
Why hold twice the estimated punch list cost?
Because estimates of small repairs usually run low, and the owner may need to hire someone else if the contractor does not return. Many owners and contract forms use a multiple of the estimate, often one and a half to two times. The sample explains its choice of two and ties release of the remaining 18,800 to completed punch items.
Where can I find a free GM594 Unit 7 sample paper?
This page carries a full GM594 Unit 7 contract closeout memo settling a 911 district's general contract, with a retainage release, a sized hold, a rejected claim and APA 7 references.
Why reject the subcontractor's claim?
The first transfer test failed because the subcontractor set the start delay at 6 seconds instead of 1. The repeated tests proved its corrected work, and the general conditions put the cost of correcting nonconforming work, including retesting, on the contractor.
Why hold twice the punch list estimate?
Small repairs often cost more than estimated, especially if another contractor must be hired to finish them. Holding $18,800 against a $9,400 estimate covers that risk without withholding the rest of the retainage.
Which obligations survive final payment?
Warranties on the engine, compressors and workmanship, the one-year correction period, lien rights until the statutory period ends and the outstanding as-built sheet for the alarm wiring, all tracked by the technical services manager.