What are the Requirements for Seller “Turnover” of Contract Products to the Buyer?

 

Unfortunately for more times than I can count, the term “turnover” [or "handover"] has become commonly used to describe a process for the Seller to transfer contract products to the Buyer.     Unless “turnover’ is defined in the Contract or clarified via Request For Information, the term is subject to arbitrary interpretation by Buyer and Seller.  

In Contracts that are part of my rail transit project experience, “turnover” is not defined but it may be analogous to requirements for Substantial Completion (SC) and to Final Completion (FC).  SC is the earliest date the Seller’s product meets its intended use by the Buyer.   FC is latest date for the Seller meeting all requirements for Buyer’s final acceptance of the Seller’s work.

Substantial Completion is a contractual milestone that consists Buyer acknowledging Seller completion of work minus punchlist (minor repairs and touch ups) and the completed work is suitable for intended use and operation by the Buyer.  Seller’s deliverables for SC includes Buyer’s review and acceptance of reports on all test and inspections, punchlist, closure of permits, issuance of certificate for occupancy/code compliance, completed submittals, and on resolution of Quality - Non Conformance Reports and Observations.  

Final Completion is a contract milestone that consists of Buyer acknowledging Seller completion of all construction and all technical and contractual deliverables.   Technical deliverables include Certificate of Construction Completion, Certificate of Construction Compliance, as-built drawings, O&M Manuals, warranty, training, software, spare parts, asset management.    Contractual deliverables include final change orders, final payment, waiver of liens, confirmation of all payments for vendors and subcontractors, and reports on certified payroll and other reports for use of disadvantages and small businesses. 

While not associated with “turnover”, Construction Completion is a contract milestone that consists of Buyer acknowledging Seller completion of the punchlist.  This also includes directing the Seller to submit its invoice request for final payment on the balance of the 100% EVM in the payment schedule previously approved by the Buyer. 

TIP:    Project participants need to use only terms that are clearly defined in the Contract, and diligently avoid creating ambiguity by introducing terms outside of the Contract.  

TIP:   Contract milestones dates, definitions and processes for Notice by Seller to Buyer on completing the work to meet the milestone are described in Provisions Related to Time.

TIP:   Contract payment definitions, deliverables and processes for Request by Seller to Buyer for payments are described in Provisions Related to Payments.  

TIP:   Requirements for technical deliverables are described in specifications that make up the technical portion of the Contract. 

TIP:   Requirements for deliverables content, format and timeframes for Seller’s submission and Buyer’s review are described in the Division 1 [general] specifications.  

TIP:   The Buyer’s Project Management Plan may be useful in establishing the activities, sequencing and timeframes for coordinating Seller’s delivery of spare parts and software.