What is a turnkey contract?
The turnkey contract specifies that the contractor is responsible for the integral management of the project. This includes obtaining permits, managing materials, hiring subcontractors, supervising construction and delivering the completed project. This type of contract is common in construction projects, but can also be applied in other sectors such as engineering and manufacturing.
Advantages of turnkey projects
Risk reduction for the customer
One of the main advantages of the turnkey projects is the reduction of risk for the customer. By delegating all responsibilities to a single company, the customer does not have to deal with multiple contractors and suppliers. This minimizes the risks associated with coordination and communication between different parties.reducing the possibility of delays and quality problems.
Cost control and budgeting
The turnkey contracts usually include a turnkey budget agreed at the start of the project. This means that the contractor assumes the risk of any cost overruns, providing the client with greater certainty as to the total cost of the project. This cost control is especially beneficial on large, complex projects where budget variations can be significant.
Comprehensive project management
The turnkey project management involves comprehensive supervision by the contractor, ensuring that all phases of the project are carried out in an efficient and coordinated manner. This comprehensive management includes everything from initial design to construction and final handover, providing a complete and seamless solution for the client.
Common applications of turnkey projects
Turnkey construction
In the construction sector, a turnkey construction project is particularly useful for real estate and commercial developments. The turnkey construction company is responsible for all aspects of the project, including architectural design, permitting, physical construction and delivery of the building ready for occupancy or use.
Turnkey real estate
In the real estate sector, the turnkey service refers to projects where developers deliver fully completed properties to buyers. This includes all interior and exterior finishes, electrical and plumbing installations, and any other features necessary to make the property ready for immediate occupancy.
Considerations when choosing a turnkey contract
Contractor evaluation
When considering a turnkey project contractIt is crucial to evaluate the experience and reputation of the contracting company. It is important to ensure that the company has a proven track record of delivering projects on time and on budget, as well as the ability to handle the scale and complexity of the specific project.
Clarity in the contract
A critical aspect in the turnkey contracts is the clarity and precision of the contract. It should clearly specify the scope of work, deadlines, budget and any other relevant conditions. This will help to avoid misunderstandings and disputes during project execution.
Long-term benefits
Opt for a turnkey work can offer long-term benefits to the customer, such as quality assurance and minimization of future operating costs. By having a single point of contact and accountability, ensures greater consistency in quality and easier maintenance of the finished project.