EPC contracts—handover, testing and commissioning
Produced in partnership with Clyde & Co
EPC contracts—handover, testing and commissioning

The following Construction guidance note Produced in partnership with Clyde & Co provides comprehensive and up to date legal information covering:

  • EPC contracts—handover, testing and commissioning
  • Handover under an EPC contract
  • Testing of an EPC contract
  • Commissioning an EPC contract

The concept of 'handover' under an EPC contract is of fundamental importance. It determines when the main obligations and duties of the EPC contractor come to an end and when the EPC contractor's potential exposure to delay damages ceases. It also delineates when the employer takes possession of (and usually responsibility for) the site and, often, when the facility is able to commence its commercial operations.

Closely related to the concept of handover are those of testing and commissioning. The existence of such requirements under an EPC contract will, however, depend very much on the type of facility being constructed. If the facility involves infrastructure (be it a road or bridge) it is less likely that detailed testing and commissioning provisions will be required. On the other hand, if the facility includes complex mechanical and electrical equipment, testing and commissioning will be a necessity.

In respect of power plants and multifaceted structures such as hospitals these concepts are therefore of great significance. Indeed, the more innovative and sophisticated the machinery or plant, the more there is a need for detailed testing and commissioning provisions.

Handover under an EPC contract

'Handover' signifies when the works have been completed in accordance with the contract and, as set out above, is the point at which the main obligations of the EPC contractor in relation to

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