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In the United States construction industry, contract agreements are usually written to allow the owner to withhold (retain) the final payment to the general contractor as "retainage". The contractor is bound by the contract to complete a list of contract items, called a punch list, in order to receive final payment from the owner. The designer (typically a licensed Professional Architect or Engineer), is usually also incorporated into the contract as the owner's design representative and agent, to verify that completed contract work has complied with the design.
In most contracts, the General Conditions to the Contract for Construction requires the Contractor, when he believes it to be so, to declare the construction project to have reached "substantial completion" and request a "pre-final" inspection. According to the General Conditions (AIA A201 Section 9.8.2), the Contractor prepares and submits to the Architect a comprehensive list of items to be completed or corrected. This snag list, generated by the Contractor is known as the punch list. Upon receipt of the Contractor's list, the Architect then inspects the work to determine if the Work is "substantially complete." Final contractor payment is made when the punch list of items are completed to meet the project design required by the contract, or some other mutually agreed resolution for each item is reached. Examples of punch list items include damaged building components (e.g. repair broken window, replace stained wallboard, repair cracked paving, etc.), or problems with the final installation of building materials or equipment (e.g. reinstall peeling carpet, replace missing roof shingles, fire and pressure test boiler, obtain elevator use permit, activate security system, etc.).
The phrase takes its name from the historical process of punching a hole in the margin of the document, next to one of the items on the list. This indicated that the work was completed for that particular construction task. Two copies of the list were punched at the same time to provide an identical record for the architect and contractor.
Punch List Software
Starting in 2013 when mobile software became popular on construction sites, many construction teams started using software to manage their punch lists. Today there are a variety of punch list software out there, ranging from simple mobile apps to more comprehensive web and mobile platforms. Many construction teams have found that they are able to deliver better quality construction when they use the construction punch list software. Some examples of construction punch list software are Closeout developed by Bridgit Inc and BIM 360 Field.