Turnkey Contracts in Inter-Firm Strategic Partnerships

Abstract

The intensification of inter-firm rivalry in the global market objectively stimulates the search for new forms of strengthening and expanding positions by business entities. Significant changes have taken place in this area in recent years – companies have started to conclude inter-firm strategic partnership agreements. Within the framework of such agreements firms cooperate in production and sales. One of the interesting areas of inter-firm partnership cooperation has become a modification of the previously practiced turnkey contract terms and conditions. A new area of cooperation is the inclusion in the contract at the customer’s request the terms providing for designing drawings of a new facility, and after delivery of the equipment, its installation and commissioning – maintaining and improving the performance of the new enterprise for several years, and after many years of trouble–free operation transferring ownership of the facility to the customer. In some cases, the customer, having obtained ownership of the new facility, leases it to the contractor for further use in production.