Glossary

Notice to Proceed (NTP)

Also known as: NTP

A notice to proceed is the owner's formal written authorization directing the contractor to begin mobilization and construction, establishing the official start date from which the project schedule, substantial completion date, and liquidated-damages clock are measured.

NTP issuance is normally contingent on a defined set of preconditions being satisfied—construction financing closed, permits issued, insurance and bonds in place, notice-to-proceed conditions in the construction contract cleared—so there is frequently a gap between when the construction contract is executed and when NTP is actually issued. Because the project's contractual completion date and the accrual of liquidated damages run from NTP rather than from contract signing, precisely documenting the NTP date matters for both schedule administration and dispute resolution. Construction lenders track NTP as a key milestone tied to the construction loan's interest reserve calculation and draw schedule, since it marks the point at which meaningful cost, and correspondingly meaningful interest accrual, begins in earnest.