Constructive Acceleration - How to resolve?

Whilst Constructive Acceleration is an established concept in the US most other contracts does not recognise or deal with this term. Constructive acceleration occurs in the absence of employer-directed acceleration. The employer’s refusal to grant an acceleration order or extension of time (EoT) for excusable delay will result in an acceleration effort by the contractor in order to complete the project on the contractual completion date.

How does this happen?

• The delay is a result of causes that would entitle the contractor to time extension under the contract.
• The contractor requests time extension for the delay in a timely manner, in accordance with the contract.
• The employer fails or refuses to grant a time extension to the contractor.
• The employer requires the contractor to complete the work in accordance with the original schedule or indicates an intention to penalize the contractor for failing to complete the work in accordance with the original contract schedule
• The contractor then endeavours to accelerate by working additional hours, by committing additional resources, or by other means
• The contractor incurs additional expense in carrying out these acceleration efforts.

Considering there is no express authority in the contract to accelerate, then no entitlement arises to claim extra costs for acceleration. And, the refusal to grant an EOT cannot amount to a “deemed” instruction to accelerate. In addition, the Contractor would argue that he is forced to take acceleration measures to avoid the imposition of liquidated damages in the face of what potentially might have become an unachievable contract time for completion. Clearly an untenable situation.

The Predicament
In circumstances where an employer disputes liability for delay and denies entitlement to EOT and acceleration costs, finding evidence of intention to contract will be challenging. Accordingly, there seems little space for constructive acceleration by ‘implied’ instruction, absent an acceleration clause.

Notwithstanding the ability to establish an Employer’s breach of contract resulting in an entitlement to claim damages, the dilemma Contractors’ face is whether to accelerate the works in the first place and leave the cost recovery process to follow.

Ordinarily contractors plan works to maximise efficiency, whereas acceleration measures tend to result in a reduction in workforce productivity and higher overall construction costs.

What to do?

• It is often argued that the Contractor should simply continue with the Works knowing that he is entitled to an EOT and that he will recover any prolongation costs and any Liquidated damages wrongfully deducted when the matter is reviewed by the appropriate tribunal.
• Or, the Contractor advises the Employer that any efforts undertaken by the Contractor to accelerate performance are not voluntary, especially when there is the perception of acceleration but an instruction has not been received. The Contractor submits an acceleration work plan together with the accompanying cost estimate. The acceleration plan and cost estimate will need to be directed to the Employer, bearing in mind that the Contract Administrator / Engineer is unlikely, under the terms of the contract, to have authority to instruct acceleration or agree payment for such acceleration.
• Or the alternative, which is to progress the matter to dispute resolution may, for some Contractors, be regarded as commercially disadvantageous given the timeframe associated with some of those provisions, e.g. those related to FIDIC contracts outlined below, and the potential ramifications of getting it wrong.

Good luck!