What is acceleration?
The term acceleration refers to action taken to speed up the progress of works so they will be completed earlier than planned or so that more work can be completed without extending the original completion date. Typically, the increased rate of progress will be achieved by the contractor using any combination of acceleration methods including, but not limited to, increased resources on site (e.g. more manpower), a more intensive pattern of work (e.g. adding night shifts), use of different working methods or revised sequencing.
Employing such methods can give rise to increased costs. While an employer is not usually expected to bear costs associated with acceleration measures taken of the contractor’s own volition, a contractor typically expects additional costs incurred due to employer-driven acceleration to be paid by the employer.
Express or implied?
Employer-driven acceleration may be express or implied. Express acceleration can arise in the following ways:
- By agreement between the employer and the contractor to accelerate, as contemplated by some standard form contracts such as JCT, ICC or NEC4.
- Express instruction by the employer (where permitted under the relevant construction contract) that obliges the contractor to complete certain works earlier than programmed.
- Following any delay or disruption that is at the employer’s risk, the employer might instruct the contractor to complete the project by the original completion date, and not an extended completion date.
Circumstances may arise where a contractor has been delayed and is entitled to an extension of time but none is awarded. In such circumstances, the contractor may feel obliged to accelerate to avoid liability for liquidated damages. The contractor may try to argue that the employer’s failure to grant an extension of time amounted to an implied instruction to accelerate (also known as ‘constructive acceleration’). No authority for implied acceleration exists under English law, although such additional cost might be recoverable as a variation or a claim in damages instead.
Key considerations on express acceleration
It will be in all parties’ best interests to formally document terms ahead of implementing any acceleration measures, normally by way of an acceleration agreement, a variation/change, or an employer’s instruction to accelerate.
The parties should first seek to agree any pre-existing claims for an extension of time, and loss and expense. The next step is then to follow any express contractual mechanisms allowing the parties to agree the terms of acceleration (or variation) and/or permitting the employer to instruct acceleration.
Ideally, a formal acceleration agreement will be entered into, which sets out matters such as the scope of the acceleration measures, any adjustment to the programme, and the contractor’s entitlement to additional payment by reference to each acceleration measure. Where there are time constraints, however, it is not unknown for parties to initially agree an entitlement to acceleration costs in principle only. This allows the contractor to begin implementing its acceleration measures with the value of related costs to be determined later. If this approach is adopted, the parties should, at a minimum, agree the method and any rates for valuing acceleration costs to minimise the risk of future disputes.
* This is an updated version of an article originally published as part of the ‘Legal Terms Explained’ series of Construction Law.
For further information, please contact:
James Doe, Partner, Herbert Smith Freehills
james.doe@hsf.com
