Notice to Proceed (NTP)

A Notice to Proceed (NTP) is the official written order issued by the engineer-in-charge or project authority to the contractor, authorising and directing it to commence physical work on a contract from a specified date. The NTP is issued after the formal contract agreement is signed, the performance bank guarantee is submitted, and all preconditions for work commencement are satisfied. It starts the contract period for purposes of calculating the completion deadline and liquidated damages.

What is a Notice to Proceed in government procurement?

In works and services contracts under CPWD, MoRTH, Railways, and most state PWDs, the contract timeline is measured from the date of the NTP, not from the date of the LOA or the date of the contract agreement signing. This distinction is significant: a contractor who signs the contract agreement on Day 0 but receives the NTP two weeks later has those two weeks subtracted from the risk calendar. The completion deadline is counted from the NTP date.

Before issuing the NTP, the project authority typically ensures that: the contractor has submitted the performance bank guarantee, the formal contract agreement is signed, insurance policies are in place, the site has been handed over (or is ready for handover), and any required permits or approvals for commencement are obtained. In road and highway projects, the forest clearance, land acquisition, and utility diversion are often preconditions for the NTP in the relevant stretch.

The NTP may be issued for the entire project scope at once, or it may be issued in parts (partial NTPs) where different sections or phases are authorised to commence at different times. This is common in linear infrastructure (roads, pipelines, power lines) where site access is achieved progressively.

The NTP date is the baseline for all time-linked contract provisions: the scheduled completion date, any milestone payments, the defect liability period commencement, and the escalation base date (in price-adjustable contracts).

Why it matters for bidders

The NTP is the starting gun for a contractor. From the NTP date, every day counts toward the completion deadline, and every day of delay beyond that deadline risks liquidated damages. Contractors should mobilise key resources, site staff, equipment, materials, in anticipation of the NTP so that work can begin on the day of receipt rather than days later.

Contractors should also track whether the preconditions for the NTP are being met by the employer. If the government has not handed over the site or obtained necessary permits, the NTP should not be accepted on a date when work cannot actually begin. Accepting an NTP with an unrealistic start date creates legal complications when seeking an extension of time.

In practice, contractors sometimes accept an NTP even before the site is fully ready, trusting that the employer will grant an extension for the time lost waiting for site access. This approach carries risk, the extension is not automatic and requires formal application and approval.

Example

A civil contractor signs the agreement for a government office building on 1 March. The performance bank guarantee is submitted on 5 March. The PWD engineer-in-charge inspects the site, confirms utilities are disconnected and the site is clear, and issues the NTP on 10 March, directing work to commence from 10 March. The contract period is 18 months from the NTP date, making the scheduled completion date 9 September of the following year. All time-based provisions of the contract are measured from 10 March.