Starting a construction project is exciting, but before the actual work can begin on site, there's an essential step that needs to be taken: receiving a Notice to Proceed. This is especially crucial for all the different teams and individuals hired for the project. Even though a project schedule might kick off from the moment the contract is signed, the physical work doesn't start until this notice is given by the hiring party.
A Notice to Proceed is an official document given to the contractor, permitting them to begin the work outlined in the contract starting from a certain date. This document marks the official commencement of the project.
A Notice to Proceed is essentially a green light, signalling that it's time to start work under a construction contract. This crucial communication can come from any party that has engaged another party for work on the project. This includes situations like a project owner giving the go signal to a contractor, or a general contractor instructing a subcontractor to begin their tasks.
Read on to learn about the importance of a Notice to Proceed document in construction, when it should be issued, how to write one, plus we have included a Notice to Proceed sample template to get you started.
A Notice to Proceed is a straightforward way to ensure everyone is on the same page from day one. Here are just some of the ways a Notice to Proceed document achieves this:
Construction contracts often require a written notice for various reasons such as changes to the project, different site conditions than expected, additional work, or other unforeseen events that could affect the time and cost of the project. The Notice to Proceed is key to following the contract's terms, allowing the contractor to ask for more time and money if needed and to protect their rights in case any unexpected issues pop up.
Documentation plays a big role in keeping everyone on the same page regarding deadlines, rights, and understanding. This can be a lifesaver in avoiding disputes over payments. Without a written Notice to Proceed, misunderstandings can easily arise, leading to the dreaded he-said/she-said situations about key project dates. A Notice to Proceed creates a clear connection to the contract that can be enforced legally if necessary.
Communicating effectively also saves a lot of time and resources. By following a Notice to Proceed process, it ensures that no contractor or subcontractor starts working on their own accord without official authorisation. This is beneficial for contractors as it confirms that they should only start incurring costs and working on the project after receiving the notice.
Delays are all too common in construction projects and often come with a hefty price tag, affecting contractors at all levels. It's standard practice for construction contracts to include clauses about liquidated damages if the project gets delayed.
When delays happen, it often leads to a blame game among parties, with each side arguing about when they were actually supposed to start working. A Notice to Proceed sets a clear and definite start date for the work, cutting through any confusion or dispute.
Once the construction contract is fully signed and in effect, it's time to issue a written Notice to Proceed to the contractor.
Before this, a Notice of Award is typically released by the project owner. This serves as a formal declaration that the contractor has been chosen for the project. The Notice to Proceed often follows or is issued simultaneously with the Notice of Award, authorising the contractor to begin initial preparations for the project. This includes ordering materials and formally engaging with subcontractors and vendors.
For contractors, receiving the NTP is a key step, acting as a safeguard before they commit resources and start contractual agreements.
Writing a Notice to Proceed requires attention to detail to ensure clarity and compliance with the project's contract. Although the structure of an NTP can differ based on the project specifics and the contractual agreement, there are several key elements you'll typically need to include:
This should cover the project's name, location, and a concise overview of what the project entails.
Mention the contract's identification number, the date it was signed, and the names of the parties involved.
Clearly state the exact date the contractor is expected to commence work.
Indicate how long the project is expected to take, usually noted in either calendar days or working days, starting from the specified start date.
Include details about the total contract value and any information regarding initial payments or funds for getting the project off the ground.
The document should be officially signed by the party issuing the NTP and acknowledged by the contractor to indicate agreement.
These components ensure that the Notice to Proceed serves its purpose effectively, providing all parties with a clear understanding of when the project work begins and the terms that govern its execution.
Check out our Notice to Proceed sample template below.
