Projects Advisors
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03

Handover & Transition

The narrowest seam, and the one that determines the next three decades.

Knowledge held against knowledge needed, across handoverThe party that built the asset holds the knowledge, and its obligation ends at handover. The party that must operate it needs that knowledge from handover onward. The curves cross at exactly the wrong moment.ConstructionOperationKnowledge held by the builderKnowledge the operator needsHandover — the seam
Knowledge leaves at precisely the moment it is first needed. That crossing is the seam.
01Inception02Delivery03Handover04Operations

Handover is treated as a completeness exercise. Documents are indexed, certificates are signed, keys change hands. The 2017 FIDIC forms strengthened what that requires: as-built records, operation and maintenance manuals and training moved out of the contractor’s-documents clauses into Sub-Clause 10.1, making their supply an express condition of taking over, with the Engineer required to issue a Notice of No-objection on the records and the manuals. A Defects Notification Period of one year, unless the contract says otherwise, then begins.

There appears to be a way past it. Victoria Tyson of Howard Kennedy reads the redrafted Sub-Clause 10.3 as allowing deemed taking over, where tests on completion have been interfered with, even without those documents. That is one practitioner’s reading rather than settled law, and it may never be tested. It is worth knowing before relying on the clause.

All of that is necessary and none of it is sufficient. A contract can compel the delivery of documents. It cannot compel the transfer of understanding, and understanding is what operations actually needs.

The gap is rarely anyone’s fault. It is structural: the party that holds the knowledge has no remaining obligation at precisely the moment the party that needs it arrives. Nobody is behaving badly. The incentives simply stop.

The discipline that addresses this has a name — operational readiness. In process industries it is mature and well resourced, because a plant that cannot be run on the day it is finished is obviously a failure. In building, property and civil infrastructure programmes it is applied inconsistently, and when it is applied it usually begins far too late to change what is being produced. Operational readiness run as a commissioning activity is a checklist. Run from inception, it is a specification.

What typically goes wrong

  1. 01

    Everything required is delivered, and nothing needed is transferred.

  2. 02

    As-built information records what was drawn rather than what was installed.

  3. 03

    Late changes are documented commercially but never reflected in the operating record.

  4. 04

    The operating team is assembled after the handover it should have specified.

  5. 05

    Operational readiness is treated as a commissioning task at the end rather than a requirement set at the beginning.

  6. 06

    The Defects Notification Period expires before anyone has operated the asset through a full cycle of conditions.

Questions worth asking

  • ?

    Could a competent stranger operate this asset from the information we have been given?

  • ?

    What did we accept because it was on the list, rather than because it was usable?

  • ?

    Which decisions were made during construction that we cannot now reconstruct?

  • ?

    What will we discover in month eighteen that somebody knew in month six?

The seam that follows

Between handover and operations, the asset stops being a project and becomes a liability with a revenue line attached.