Turnkey vs Labour Contract: Which is Right for Your Project?

Choosing the right contract structure is one of the most important decisions in construction. The two most common options in Pakistan are turnkey (supply and install) contracts and labour-only contracts. Each has distinct advantages and risks.

Turnkey Contracts

In a turnkey contract, the contractor supplies both materials and labour. The client pays a single price for a defined scope of work. This simplifies procurement and transfers material risk to the contractor — but requires careful BOQ preparation and contract drafting to prevent disputes.

Labour-Only Contracts

In a labour-only contract, the client purchases all materials directly and pays the contractor only for labour. This gives the client full control over material quality and procurement — but requires active management of purchasing, delivery, and storage.

Cost Comparison

Labour-only contracts are typically 10–20% cheaper than turnkey for clients who can manage procurement effectively. However, the management burden is significant, and inexperienced clients often lose this saving through poor purchasing decisions.

Which to Choose

For clients with construction experience and time to manage procurement: labour-only. For clients who want simplicity and are willing to pay a premium for it: turnkey with a well-drafted BOQ-based contract. Build Axis can manage either structure on your behalf.