Acceleration of a construction programme

When considering 'acceleration' of a construction programme to make up time, ensure the decision doesn't slow down payment. By Kevin Joyce, senior associate, Pinsent Mason.

The issue

When progress on a programme has been slow or hindered a contractor may choose to claw-back time to achieve the completion date by acceleration.

The implication

Before deciding to employ 'acceleration' and increase the intensity of work, ensure there is a clear instruction from the client to ramp-up progress. The Court's position is unclear in relation to the recovery of acceleration costs without the clients blessing, so tread carefully. It is be wise to keep records in proof of all additional costs.

Given the uncertainties of the construction process, progress is often different to planned intention. If progress is slow, 'acceleration' is often considered as an option by which the project team can claw-back time that has been lost and not rely solely on the hope that things will improve later on in the project and result in completion on time.

What is 'acceleration'?

Acceleration is where the contractor takes steps, despite a change to the works, to achieve the original completion date or to achieve an earlier completion date than would otherwise be the case. It is an increase in the intensity of the work being carried out with the aim of bringing the job in on time. It should not be confused with mitigation, which is simply re-allocation of existing assets in order to minimise cost and delay under the changed conditions on the site.

If the contractor has accelerated, it will want to recover additional costs incurred in adopting increased working hours, additional site facilities or bringing in extra equipment or other resources to speed up the work.

In circumstances where the employer expressly instructs the contractor to accelerate and where the need to accelerate does not arise from the contractor's own delay, then the right to recover acceleration costs is often relatively straightforward.

More difficult, but probably more common, is the situation where there is no clear instruction to accelerate. This sort of situation may arise where for example the contractor thinks he has a valid claim for an extension of time but the employer (or his project manager or contract administrator) refuses or fails to grant an extension of time and the contractor, rather than risk being wrong and having to pay liquidated damages, decides to accelerate to make up the delay.

On the other hand, the employer may want the contractor to accelerate, not just to achieve an earlier completion date but to make up delays so that the original completion date can be met.

The contract terms

The NEC3, GC/Works and JCT05 contracts contain structured procedures enabling the parties to accelerate to achieve completion before the completion date specified in the contract based on a quotation and acceptance procedure.

However, these forms only provide for acceleration to achieve an earlier completion and not acceleration to make up delay and achieve the existing completion date. If the employer so requires, he will have to reach a side agreement with the contractor.

Constructive acceleration

What happens where the employer refuses to grant an extension of time and the contractor considers it is obliged to accelerate in order to hit the original completion date?

This is what is known as 'constructive acceleration', a principal recognised in the United States and Australia. In these jurisdictions, if a contractor can prove that a delaying event was one for which it ought to have been awarded an extension of time and the certifier under the contract refuses to grant an extension of time either promptly or at all, a contractor may be permitted to claim acceleration costs on the basis of an implied instruction to pay the contractor to accelerate, overcome delays and finish the project by the contractual completion date.

In the UK, however, the Courts do not as openly accept the principle of 'constructive acceleration'. The conventional position is that the parties have included provisions for extensions of time in the contract and if the employer fails to grant an appropriate extension, the dispute resolution provisions should be used to correct such failure.

In reality, however, there will often be significant commercial pressures on the contractor if it continues at its normal rate of progress and becomes liable to pay liquidated damages while the project manager or engineer makes up its mind as to the contractor's entitlements and/or the parties follow the dispute resolution procedures in the contract. These commercial pressures often outweigh the risk of accelerating to bring the job to a timely conclusion in the hope that some allowance for acceleration costs will be made in the final account.

While the Courts have suggested that there are certain limited circumstances where the contractor may be able to recover its acceleration costs (see for example Ascon Contracting Limited v Alfred McAlpine Construction Isle of Man Limited and Motherwell Bridge v Micafil Vacuum Technik), the position remains unclear.

Best practice

The best advice for a contractor remains to attempt to resolve extension of time claims promptly and/or obtain from the employer a written instruction to accelerate before undertaking such works. Where that is not possible, the contractor should set out clearly before accelerating, the basis of the steps he is going to take and why it is that he considers he is effectively being instructed to accelerate. He will also need to maintain accurate and complete records to prove the additional costs he has incurred.

From the employer's point of view, the contractor's entitlements to an extension of time should be addressed promptly and agreement sought in relation to the value of acceleration if possible. If acceleration is not intended, care needs to be taken with written and oral communication to avoid arguments from the contractor that it has been so instructed.