TURNKEY PROJECT

KELLY BUITRAGOZAIRA NIETO PADILLA

UNIVERSIDAD DE IBAGUEINTERNATIONAL BUSINESS I

TURNKEY PROJECT

A turnkey project refers to a project in which clients pay contractors to design and construct new facilities and train personnel.

Example: Industrial companies that specialize in complex production technologies normally use turnkey projects as an entry strategy.

In projects "turnkey" a contractor agrees to deliver every detail of the project to a foreign client, including the training of operating personnel. Upon completion of the contract, the foreign client receives the "key" to a plant ready for its overall performance.

Other services that are always present in

contracts "turnkey", are:The supply of materials and machinery transport thereof.

The completion of civil works.

Installation and assembly, and the set-up and operation of the proposed work.

In certain instances, it is also possible to include staff training and technical assistance.

In the area of international trade as a consequence of technological advances, which better reflects the transformations in this sector is the method "turnkey".

With it disappears the traditional relationship between customer (contractor), engineer and contractor, for become replaced by a single customer-contractor relationship, in which the latter, with their traditional roles, project design assumes.

1. When used in the same project:

Contracts "turnkey" Mixed: When part of the project is traditional and the other is turnkey.

Contracts "turnkey" partial: When hiring traditionally entire project but part outsources turnkey.

Contracts semi "turnkey“: When the contractor holds several contracts being

one turnkey contractor responsible latter coordinating other contracts.

STANDINGS

2. Based on the difference in practice content:

Contracts "turnkey" single or partial:

Contracts "turnkey" complete or classic:

Contracts "turnkey" wide:

a) the merger of the missions of conception and execution of the work in one person.

b) the overall obligation assumed by the contractor to the client to deliver a work fully equipped and in perfect working order.

CHARACTERISTICSThe two essential features of the contracts

"turnkey“

CONTRACT CHARACTERISTICS

It involves holding one single contract made between the client and the contractor.

The contractor assumes the design and execution of the work

Gives the contractor the right to make changes in their plans, at their own cost and risk.

PHASES:

1. Contract preparation: in determining the client's objectives, the contractor is selected and negotiated contract terms with him.

2. Execution of the contract that includes the start of work, the progressive development of the work and its full implementation, operation and acceptance.

In the preparation phase of the contract the engineer's role is limited to advising the client as:

a) the preparation of documents for invitation to tenders.

b) the comparison and selection of offers.

c) in some cases, develop overall project specifications are given where technical conditions required by the customer.

As contracts "turnkey" detailed description of the work takes place during the execution of the contract, in such a situation are certain legal consequences:

Indeterminacy of the object of the contract at the time of awarding the contract, which is to meet standards through

rights granted to the contractor to modify the project provided that it is informed, review or approve such changes, and provided that such amendments do not alter the technical guarantees and good work.

The contractor shall be responsible for any possible gaps and omissions that may vitiate the project and the client's rights.

ADVANTAGES

The advantages of theseprojects is that they are a

great way to earn economicreturns from the asset and

provide the ability to leverage

the skills of technologicalprocesses in countries

whereresearch and development.

DISADVANTAGES

The company is a contractor will not have a long-term business in the foreign country.

  Can create a competitor.

  Competitive advantage is the technology may also be the competitive advantage of current or potential competitors.