What are turnkey contracts and non-turnkey contracts in project management

1. What are turnkey contracts and non-turnkey contracts in project management?

2. Turnkey and non-turnkey are two types of contracts that are agreed upon by the client and a consultant. For example, take the case of a pharmaceutical company. Now the company decides to expand and open a new manufacturing facility. Either it can outsource the new project to the turnkey contractor or a non-turnkey contractor. Now, let’s see what’s the difference between them.

3. Turnkey Contractor - A turnkey contractor will be in charge of conception to completion of the project. Generally, the budget is fixed at the beginning itself and it won’t change. Also, the design and engineering concepts, execution, procurement, construction, commissioning; all is carried out by the turnkey contractors. Once the project is completed, it is handed over to the client. So, no hassles or headaches for the client.

4. Non- Turnkey Contractor - Now the whole work is carried out by the turnkey contractors but the roles and responsibilities are shared between them. The billing is also done differently depending upon the work completed. All the work is done in coordination between the client and the consultant and decisions taken accordingly.

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