June 21, 2023

Turn Key Projects: Everything You Need to Know

turnkey construction project

If you’re considering a commercial construction project, you might consider turnkey projects. But if the concept is new to you, you’ll likely have questions. Today, we’ll share everything you need to know about turnkey projects, including examples, advantages, disadvantages, and getting started. And you can decide if the turnkey project method is right for your commercial build or renovation project.

What Are Turnkey Construction Projects?

Turnkey projects will vary, of course, based on the build and unique preferences. However, every turnkey project will include these elements in the contract.

Designs: The commercial contractor is responsible for the overarching design process.

Supply Procurement Process: The contractor will manage the selection, scheduling, obtaining, and coordination of materials and supplies for the commercial construction process.

Build Process: The contractor maintains responsibility for starting and completing the build entirely. This includes hiring subcontractors, securing permits, project coordination, and scheduling. All of which is managed at the discretion of the contractor and project. 

Why Are They So Popular Today?

Commercial construction projects are complex, usually with layers of timelines, chains of command, and processes. However, when you officially choose to move forward with a turnkey project, you can essentially remove some of those complex bottlenecks, allowing the contractors to maintain command and control over build-related decisions and timelines. This model of building is popular because it streamlines coordination, communication, and scheduling. One of the industries embracing the turnkey project method the most is real estate and property management. Property owners can effectively build and complete projects quickly, leading to faster tenancy and profits. 

Benefits of Turnkey Commercial Construction Projects

In addition to the streamlined build process with turnkey commercial construction projects, there are other benefits to consider. These advantages make the turnkey model more appealing in a variety of commercial construction projects. 

Price Certainties: With one central contractor coordinating the build, there are reduced pricing unknowns, easier-to-calculate ROI metrics, and improved budgeting efforts. 

Reduced Changes: There is a reduction in inconsistencies and change orders throughout the build when the contractor is responsible for coordinating efforts.

Improved Communication: With fewer points of contact in the chain of command, communication is streamlined and improved.

Reduction in Cost Overruns: There is a better opportunity to manage cost overruns because the contractor is involved in the design process and possesses oversight responsibilities. It’s easier to avoid overspending and delays.

Condensed Timelines: Procurement and design decisions can happen simultaneously, streamlining the overall timeline. Decision-making is quicker, too, with fewer parties involved. 

Risk Reassignment: The designated contractor assumes all the risk and responsibility associated with the commercial construction build, including cost, performance, and scheduling.

Consistent Quality: The designated contractor can establish quality standards and maintain quality control, with direct supervision and oversight of every build element.

Disadvantages to Consider

Of course, there are disadvantages to consider, too. Turnkey projects aren’t going to be an ideal fit for every commercial construction endeavor. And working with the wrong-fit contractor can significantly dampen your timelines and results. Be mindful of these potential setbacks as you review your commercial construction options.

Turnkey only works well with a strong scope definition.

For any turnkey project to work well, there must first be a fully established, well-defined project scope. Before engineering and design can begin, there needs to be a clear definition and understanding of the completed project. 

Without trust in the contractor, turnkey projects can be tumultuous.

Project owners need to have unflinching trust in their designated contractors since the contractors will assume responsibility for making decisions and managing the build. You’ll need to be mindful of choosing a high-valued, expert partner, like Jerdon Construction, to realize your vision for the project, understand your budget, and keep to your commercial construction goals.

There are potential cost disadvantages you and your teams should consider.

Budget discussions happen first and usually allocate funding for unpredictable changes or nuances throughout the build. This can include costs of materials and impacts of inflation. Preliminary budget estimates will tend to be larger because of these additional considerations. It’s like paying for changes you may or may not need, even if it’s more cost-effective to do so.

Examples of Turnkey Construction Projects

The main distinction between traditional design builds and turnkey projects is who maintains control. Project owners may want to be involved in every step of the process, in which case turnkey methods are not ideal. However, if the idea of handing over the reins to a trusted professional to execute your commercial construction vision, turnkey can be a great solution. Here are turnkey construction examples where such methods make the most sense.

A commercial property owner hires a reputable contractor to flip a commercial retail building quickly after renovation. 

In this instance, the property owner won’t necessarily want to be involved in the design and engineering phases. And the ultimate goal is to turn the property quickly for listing and sale. In this instance, working with a reputable contractor with a turnkey project method is a great fit solution.

A commercial property owner hires a turnkey contractor to remodel a former restaurant into a commercial office space for quick tenancy. 

A contractor who understands the owner’s vision for a new office space can make the decisions regarding the build, design, and layout in a turnkey operation. And letting the experienced contractor make the decisions will improve the efficiency and timeline of the build.

A commercial property owner wants to renovate and redesign a commercial building into a storage facility with rentable units.

In instances when owners seek to rebuild or renovate existing industrial or commercial spaces, a turnkey construction partner can be great. Because the contractor will have experience in transforming properties, they’ll be swift in making necessary decisions that you might take time to deliberate otherwise.

A commercial property owner wants to transform an industrial complex into a strip mall of retail spaces. 

This is another scenario in which a turnkey project partnership is a great-fit solution. An experienced contractor in designing, building, and renovating malls and retail spaces can make quick work of your project.

Common Questions About Turnkey Projects

You might have additional questions about turnkey projects. Explore these FAQs for additional clarification and insights on how best to move forward with your commercial construction plans.

What are the differences between EPC and turnkey methods?

With a turnkey project, the contractor controls the complete scope of the project, including initial designs and engineering, construction, and commissioning. EPC contracting, in contrast, may or may not cover the entire scope of the project. 

What are the differences between turnkey projects and design-build projects?

Again, with the turnkey project, the contractor controls the scope of work. In a design-build partnership, however, you, as the owner, assume responsibility for controlling the process, assigning approvals, controlling contractors, and managing the budget throughout the build.

What are the five basic concepts of project management in turnkey-related projects?

The Project Management Institute says the five concepts are: initial stage and conception, planning, execution, performance, and closing stages.

Talk to Jerdon Construction About Your Project

Whether you’re exploring options for a turnkey commercial construction project or a design-build project, there’s one contractor trusted by everyone in the Lehigh Valley. Jerdon Construction specializes in all kinds of high-value, high-profile, and high-quality commercial projects, including remodels, renovations, and new construction builds. Connect with our team to discuss your project and ask questions about which build methods are right for you. We can guide your efforts from start to finish, ensuring whatever method you choose, your project is completed flawlessly.