Dispute resolution

Back to basics: acceleration of construction projects

Published on 14th Apr 2022

The series on dispute resolution issues for construction projects considers the implications of contractors speeding up work

Acceleration is the act of the contractor speeding up the carrying out of the works so that the works will be completed earlier than contractually required. The completion date against which the contractor is accelerating may be the original date for completion or the completion date as adjusted under the contract during the course of the works, for example by the award of an extension of time or by agreement. 

What is not acceleration?

Acceleration is a term that is often used but not correctly applied. It is therefore important to identify what is not acceleration. 

A contractor may wish to speed up its work if the works are delayed for a reason for which it is responsible. In such circumstances, the contractor has no entitlement to an extension of time and may be exposed to a claim for liquidated or general damages for delay. However, the contractor's decision to attempt to recover a delay it has caused is not acceleration; the contractor is still trying to complete the works by the contractual completion date and not earlier. 

Similarly, if the contract requires the contractor to proceed regularly and diligently and the  contractor fails to do so, the contract may entitle the employer or contract administrator to give notice, or instruct the contractor, to comply with its obligation to proceed regularly and diligently at the contractor's own cost. Whilst these may colloquially be referred to as notices or instructions to accelerate, they are not acceleration claims as the contractor remains obliged to complete the works by the contractual completion date. 

A contractor’s general duty to mitigate its loss when it suffers delay and disruption or incurs additional cost due to a delay caused by the employer is also distinct and separate to an acceleration claim. The general duty to mitigate does not require the contractor to incur additional costs.

How does acceleration arise?

Acceleration typically arises in two ways on a construction project:

  • Express acceleration. The employer instructs the contractor to complete the works before the completion date. Typically, this arises where the employer is responsible for the delaying event but requires the works to be completed by the original completion date e.g. due to obligations under an agreement for lease or a potential sale and purchase of the building.
  • Implied or constructive acceleration. The contractor has been delayed and is entitled to an extension of time but the extension of time has not been awarded. The contractor therefore accelerates to avoid paying liquidated damages. In these circumstances, the contractor is trying to complete the works before the date that it should have to complete the works if the extension of time had been properly awarded. The SCL Delay and Disruption Protocol 2nd Edition recommends that before implementing acceleration measures in such circumstances, the contractor should first take steps to have the dispute as to its entitlement to the extension of time resolved in accordance with the contract dispute resolution provisions and should provide notice of the intended acceleration measures to the employer or contract administrator. 

Consequences of acceleration

The contractor will generally expect to be paid the additional costs it incurs in completing the works sooner than contractually required, for example, additional labour costs, additional plant and material costs, supervision and management costs and costs associated with rescheduling the works, perhaps less productively. 

The contractor will also need to update its programme to allow for accelerated completion.

If delaying events occur after the agreement to accelerate which would entitle the contractor to an extension of time, it is likely that the contractor will also be entitled to any such extension. 

Before agreeing to accelerate, parties may need to consider:

  • agreeing or settling responsibility and entitlement for earlier delays to establish the current completion date against which accelerative measures are to be taken;
  • whether suppliers and sub-contractors and the professional teams can also meet the revised programme;
  • how the contractor will be paid for the acceleration measures i.e. on a lump sum or reimbursable basis?;
  • what records need to be kept of the acceleration measures deployed; and 
  • the contractual requirements in relation to such acceleration measures and, if there are none, whether they wish to enter into an acceleration agreement to document the measures and consequences agreed.


 

Share
Interested in hearing more from Osborne Clarke?

* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

Connect with one of our experts

Interested in hearing more from Osborne Clarke?

Related articles