Float Ownership in Lump-Sum Turnkey EPC Projects and Offshore and Mega-Infrastructure Projects

This is the second blog post in a series on float ownership. The first post addressed what float is, why it matters, main approaches to float ownership, practical considerations, common approaches in the U.S. and other countries, and recommendations. This second post discusses float ownership for lump-sum turnkey engineering, procurement, and construction (EPC) projects and offshore and mega-infrastructure projects, and the next post will cover collaborative NEC projects and contractor-driven fast-track projects. Subsequent posts will address these topics:

• Float and concurrent delay analysis
• Typical float-related provisions in EPC contracts
• Float ownership provisions in AIA contracts
• Float ownership provisions in the AGC/ConsensusDocs 200 – Standard Owner/Constructor Agreement (2023)
• Float ownership provisions in FIDIC Red Book 2017 contracts
• Float ownership under industry delay analysis standard practices

Lump-Sum Turnkey EPC Projects
Contractual float ownership provisions vary based on the project type. Lump-sum turnkey (LSTK) EPC projects in the energy and power industry typically employ project-owned float ownership. The shared float commonly adopted in project-financed EPC contracts reflects how stakeholders structure risk, finance, and completion certainty in such projects.

If a project owns the float, then float is a shared project resource. Thus, owner-caused delay first consumes available float, and a contractor only receives an extension of time (EOT) if the delay exceeds available float. Completion date certainty is prioritized over the contractor’s internal schedule flexibility. This approach is typical under EPC forms like the FIDIC Silver Book, although neither the 1999 nor 2017 editions expressly declare float to be project-owned, and the allocation of float under these forms remains a subject of debate among practitioners.

Project-financed power and energy projects usually include the following key features:

1. The debt drawdown schedule is tied to completion.
2. Revenue only begins at the commercial operation date.
3. Debt service coverage ratios depend on the start of operations.
4. There is liquidated damages (LD) backstop delay risk.

Lenders want a fixed, bankable completion date, predictable LD exposure, and minimal extension risk. If contractors owned the float, owner-caused delays could trigger EOTs even if completion were still achievable by the contract completion date. This introduces timing uncertainty and destabilizes debt modeling. Project-owned float protects the financing model.

In LSTK EPC projects, the contractor prices total execution risk in its lump-sum price. The contractor controls sequencing, manages subcontractors, and accepts performance risk. If the contractor owned float, it would effectively retain contingency, use float strategically to avoid LD exposure, and shift schedule protection away from the owner. In LSTK contracts, the commercial premise is that the contractor prices its contingency into the lump sum. Therefore, float is treated as a project buffer, not contractor property.

Under English law commonly used in energy EPC projects outside the U.S., the prevention principle provides that if owner delay prevents completion and no EOT mechanism cures it, time can become at large. This means that the contractual completion date falls away, LDs become unenforceable, and only “reasonable time” applies. Multiplex Construction (UK) Ltd. vs. Honeywell Control Systems Ltd. is a leading, modern English case that illustrates how the prevention principle interacts with EOT clauses.

The prevention principle does not apply if a contract contains a workable EOT mechanism that allows a contractor to obtain time relief for employer-caused delay. This is the critical point for float ownership and EPC contract drafting. Because there was a contractual EOT mechanism in the Multiplex case, prevention did not destroy the completion date, LDs remained enforceable, and time did not become at large.

Thus, a properly drafted EOT clause neutralizes the prevention principle. Courts still examine whether the clause applies to the relevant delaying event, whether notice conditions were met, and whether the clause is workable in practice.

Offshore and Mega-Infrastructure Projects
On offshore and mega-infrastructure projects, such as offshore wind, LNG, subsea pipelines, FPSOs, nuclear, and metro systems, contracts often contain a detailed float allocation clause rather than simply stating that the project owns the float. On these projects, float is not just scheduling flexibility—it is a critical risk buffer tied to financing, interfaces, weather windows, and marine logistics.

Offshore project clauses often address total, activity, and terminal float, shared vs. exclusive float, how float is consumed, impact of delay concurrency, schedule update requirements, marine/weather contingency treatment, interface milestone float, acceleration interaction, prevention principle protection, and LD preservation language.

Unlike building projects, offshore and mega-infrastructure works often involve multiple prime contractors, marine spreads, fabrication yards in different countries, grid connection milestones, and seasonal weather windows. Float often sits between packages, at marine campaign interfaces, and around commissioning sequences. If float ownership is unclear, disputes may arise over who may consume float first, whether one contractor can “use up” shared float, and whether owner interface delay triggers EOT. A detailed clause prevents cross-package conflict.

Marine weather windows make float economically critical. Offshore works depend on monsoon seasons, hurricane seasons, North Sea winter restrictions, and transport vessel availability windows. If float is misallocated, a delay that pushes work into another weather season can add months to a project completion date. Vessel demobilization and remobilization costs can escalate massively. Insurance and financing covenants may be triggered. Therefore, contracts often distinguish activity float, terminal float, seasonal float, and marine campaign float. Simply stating that a project owns the float is too blunt for this environment.

Mega-energy projects are usually financed. The commercial operation date drives revenue start, tax incentives, power purchase obligations, and debt service commencement. Sponsors and lenders need certainty on which delays consume buffer, clear rules on when EOT is triggered, and protection against LD collapse. A detailed float clause preserves enforceability of LDs, manages prevention risk, and protects the financial model.

On mega-power projects, multiple contractors usually compete for float. On offshore projects, there may be a turbine generator supplier, a foundations contractor, a cable installer, an onshore grid contractor, and a commissioning integrator. If float is not clearly allocated, then each contractor may argue the float was theirs. Concurrency disputes multiply, and the owner risks double recovery or unfair exposure. Detailed clauses typically state that total float is a project-wide resource, no contractor has exclusive entitlement to float, float is consumed on a “first impact” basis, and EOT only arises when the contract completion date is threatened.

Without a detailed clause, contractors may build hidden float into their schedules, the owner may assume visible float is shared, and experts may later argue over “available float.” In mega-arbitrations, this issue becomes extremely technical. Detailed drafting of float ownership clauses clarifies: 1) if float is to be measured from accepted baseline only or if float may be recalculated from accepted schedule updates or rebaseline schedules as progress is achieved and delays are incurred, 2) that schedule updates cannot artificially create entitlement, and 3) the float calculation methodology. This detail reduces expert manipulation.

Under English law that commonly governs offshore projects, the reasoning in Multiplex confirms that a functioning EOT clause preserves LDs. But in offshore projects, interface delays are common, and owner-caused delay may consume shared float. A detailed float clause ensures that “prevention” is cured through an EOT mechanism, time does not become at large, and the LD regime remains intact.

Concurrent delay on offshore projects is rarely binary. A project may experience weather delay, owner design delay, contractor fabrication delay, transport vessel breakdown, regulatory inspection delay, and other delays. Detailed float clauses often clarify whether float absorbs concurrency, whether EOT is reduced for concurrent contractor delay, and whether compensation is barred in concurrency. This detail reduces arbitral discretion later. Energy arbitrations often involve massive schedule models of 50,000+ activities, competing expert methodologies, and debates about “available float” vs. “contingency.” Because of past disputes, industry practice has evolved toward precise float definitions, clear allocation rules, express statements that float is not owned by any party unless stated, and defined terminal float treatment. Lessons learned from past disputes drive more granular clauses.

Mega-offshore projects involve contractors-all-risks insurance, which is a project-specific construction insurance policy that covers physical loss or damage to works during construction, together with certain third-party liabilities. In addition, these projects often involve delay-in-startup (DSU) insurance and marine liability coverage. DSU insurers scrutinize schedule structure, float allocation, and critical path integrity. A detailed float ownership clause supports insurability. However, insurers evaluate schedule robustness and critical paths—they do not usually require specific float allocation clauses.

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