Completion and Start - Up Obligations

Details of how, when, and by whom the plant is to be commissioned are usually set forth in the scope-of-work provisions of the relevant agreements.  Because of the specialty contractor’s in-depth knowledge of the work and role in plant design, that contractor is typically responsible for commissioning the equipment that it supplies.  However, this work may be undertaken by the project developer (with assistance from the specialty contractor) or by the balance-of-plant contractor.  Attention must be given in the agreements to defining the stages of completion, such as the actual delivery of equipment to the project site, the installation of the equipment, and the commissioning, start-up, and performance testing of the plant.  Once these progress milestones are established, completion is generally shown by the contractor’s certifications of, for example, interim completion, substantial mechanical completion, final mechanical completion, and final sign-off.  Each such certification is considered an incremental measure that the project must satisfy to progress to the next measure.  As with other supply- and construction-related agreements, progress payments by the project developer to the contractors (as set forth in the relevant agreements) are normally based, in part, on the milestones described above.

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