Runoff and Buyoff

Runoff is the demonstration that equipment does what the specification says. Buyoff is the customer signing to say they accept it. They normally happen twice: once at the supplier's works before shipment, and again on site after installation.

The two-stage structure exists because moving a line breaks things. Works runoff proves the equipment functions before it is dismantled and shipped; site runoff proves it still functions after reassembly, on the customer's utilities, with the customer's parts. Passing the first is no guarantee of the second, and the gap between them is where schedule risk concentrates.

Buyoff matters commercially because it usually releases money and starts clocks. A payment milestone is frequently tied to works buyoff, and the warranty period commonly starts at final buyoff rather than at delivery. On a project with a long commissioning phase, that difference can be a year of warranty exposure that was never priced.

The clause worth finding in any specification is the one listing what must be demonstrated. A runoff that requires only functional operation is a different exercise from one requiring a sustained rate trial and a capability study with the customer's engineer present for a week. Both get called runoff, and they are not the same cost.

The two stages, and what each usually requires

  • Works runoff: at the supplier's facility, on the supplier's utilities, often with sample parts rather than production material.
  • Works buyoff: customer sign-off releasing shipment, and frequently a payment milestone.
  • Site runoff: after installation, on the customer's utilities, with production material and production operators.
  • Final buyoff: formal acceptance. Commonly the event that starts the warranty period rather than delivery.
  • Punch list: outstanding items agreed at buyoff, with dates. What is on it and who closes it is worth pinning down.

Frequently Asked Questions

What is the difference between runoff and buyoff?
Runoff is the demonstration: the equipment runs and its performance is measured against the specification. Buyoff is the customer's formal written acceptance of that demonstration. Runoff can succeed without buyoff being granted if items remain outstanding.
When does the warranty actually start?
It depends entirely on the contract, and the difference is real money. Delivery, works buyoff, site buyoff and final acceptance are all used. On a project with a long commissioning period, warranty starting at final acceptance can mean a year more exposure than warranty starting at delivery.
Can buyoff be granted with outstanding items?
Usually yes, through a punch list: agreed outstanding items with owners and dates. The thing to establish is whether payment is released at buyoff or withheld until the punch list closes, because those are very different cash positions.

Acceptance and warranty terms change the number. See them surfaced.

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