The official document that authorizes construction work to begin is known as the Notice to Proceed (NTP). This written communication serves as the formal trigger that transforms a signed contract into an active project with a binding timeline. It is the definitive administrative step that grants a contractor legal permission to mobilize personnel and resources onto the job site to commence physical construction activities.
The Official Document That Starts Construction
The Notice to Proceed (NTP) is a mandatory, formal authorization issued by the project owner or the owner’s authorized agent, such as an architect or construction manager. Directed to the General Contractor (GC), it signals that all necessary preconditions have been satisfied, allowing the contractor to start work under the executed agreement. The NTP is the official directive that activates the contract’s performance phase.
Issuance of the NTP confirms the owner is ready for the project and has met their pre-performance obligations. The General Contractor cannot begin site work or charge the owner for costs until this notice is formally received. This mechanism ensures that neither party prematurely starts work before all legal and financial requirements are in place.
Legal Significance of the Notice to Proceed
The date specified within the Notice to Proceed establishes the official start date for the entire project timeline. This date is the contractual point from which the agreed-upon duration for completion, often stated in calendar days or working days, begins to count down. The contractor is legally obligated to adhere to this schedule and work toward the stipulated substantial completion date.
The NTP’s start date triggers the contractor’s performance period and liability for timely completion. Should the project extend beyond the contractually obligated completion date, the contractor may become subject to financial penalties, such as liquidated damages. The NTP provides the baseline for measuring subsequent delays and assessing claims for time extensions.
Before the Notice to Proceed is issued, the owner is generally not liable for any costs the contractor might incur. The NTP legally shifts the financial risk and responsibility for performance to the contractor, making it a powerful risk management tool for the owner. It solidifies the project timeline, which impacts the financial flow, including the scheduling of progress payments and the management of project financing.
Key Information Contained Within the Document
A properly drafted Notice to Proceed must contain several mandatory elements to ensure clarity and legal enforceability. It begins by referencing the specific, fully executed contract documents, including the contract number and the date of its execution. This link ensures the NTP is understood to be operating under the terms and conditions previously agreed upon by both parties.
The most important detail is the authorized start date, which is the specific day the contractor is permitted to mobilize and begin work. The document also stipulates the total contract time, such as “270 calendar days,” and may reference the projected date of substantial completion. Additionally, the NTP confirms the total contract sum and may include details regarding any initial mobilization payments.
Finally, the Notice to Proceed requires formal signatures from the authorized representatives of the project owner and the General Contractor to formalize the agreement. Including this information prevents ambiguity, aligns stakeholders on the project’s timeline, and provides a clear point of reference for all future schedule and financial discussions.
Essential Steps Preceding the Notice to Proceed
The issuance of the Notice to Proceed is contingent upon the successful completion of several administrative and legal prerequisites.
The owner must ensure that all necessary governmental permits, especially the building permit, have been officially obtained. Failure to secure these regulatory approvals would make any construction work illegal.
The contractor must fulfill pre-performance obligations by securing and submitting proof of required insurance coverage and bonding. This includes providing performance bonds, which guarantee the contractor will complete the work, and payment bonds, which protect subcontractors and suppliers. The owner must review and approve these documents to confirm the contractor is financially prepared to assume the project’s risks.
A formal pre-construction meeting is often held with the owner, contractor, and design team to finalize logistics and communication protocols. Only after the contract has been executed, financial securities are in place, and regulatory permissions are secured can the owner issue the Notice to Proceed and trigger the start of the construction clock.
Distinguishing the NTP from Other Pre-Construction Paperwork
The Notice to Proceed must be clearly differentiated from other preliminary documents that signal intent but do not authorize physical work.
A common source of confusion is the Letter of Intent (LOI), which is often issued during the negotiation phase. The LOI merely expresses the owner’s serious intention to award a contract to a specific contractor, allowing the contractor to begin preliminary activities, such as engaging key suppliers. However, it does not authorize site mobilization or full-scale construction.
Another distinct document is the Authorization to Proceed (ATP). This can be a limited directive that authorizes only specific, restricted activities. An ATP might be used to permit the contractor to purchase long-lead items or perform site testing at their own risk. Crucially, it does not start the official contract performance clock. Only the Notice to Proceed serves as the comprehensive legal authorization to commence construction activities and initiate the contractual schedule for project completion.