In project management, what does the term 'Notice to Proceed' signify?

The term 'Notice to Proceed' is a critical component in project management, particularly in construction projects. It signifies formal approval from the project owner or client to the contractor to commence work on the project. This document indicates that all prerequisites and conditions are satisfied, such as securing financing, obtaining necessary permits, and finalizing contracts.

Receiving a Notice to Proceed is pivotal for contractors as it marks the official start date of their obligations under the contract. It often includes the timeline for project commencement and any specific conditions that must be met before work can begin. This notice is essential for planning and resources allocation, as it sets the stage for the entire project timeline and workflow.

Understanding the significance of the Notice to Proceed helps project managers uphold the project's schedule and ensures that all parties are aligned before actual work starts on-site.