- Voluntary acceleration
- Directed acceleration
- Delay with time extension
- Delay without time extension
- Accelerated performance without delay
- Constructive acceleration
- Effect of owner’s directive to accelerate
- Contractor’s proper contractual procedure
As discussed in Chapter 17, a contractor cannot assume with impunity that the contract completion date will necessarily be extended simply because a properly supported claim for a time extension has been filed with the owner. This is true even when the owner’s project representatives have informally indicated their personal belief that an extension will be granted if it is later determined to be necessary for the contractor to avoid being assessed liquidated damages. The proper and prudent position for the contractor to take if the owner denies or simply fails to act on a properly supported claim for a time extension is to protest the lack of action or the denial in writing and then advise the owner that the denial or lack of action has placed them in a position where they are compelled to attempt to complete the contract by the original required date. Completion by this date when significant delays have been experienced or additional work has been added to the contract usually will entail incurring additional costs for overtime, shift work, and mobilization of additional crews, equipment, and material. A contractor, who has incurred such costs in meeting or attempting to meet the original completion date when an extension of time should have been granted by the owner, is entitled to recover these costs under the doctrine of constructive acceleration.
Voluntary and Directed Acceleration
An understanding of the terms acceleration, voluntary acceleration, and directed acceleration in a contractual sense is necessary to understand the concept of constructive acceleration.
Acceleration and Voluntary Acceleration
Acceleration means completion of the contract work or part of the contract work at a more rapid rate than required by the contract. Ordinarily, the contractor has the right to work at a faster pace than the minimum needed to meet the contract completion date. This is an implied right under the contract. The contractor is usually the party bearing the financial risk of performance, and unless the contract expressly prohibits completion of the work before the contractually specified date, the contractor is free to speed up the work. Exceptions might include, for instance, a contract involving embankment construction where it was necessary to control the vertical soil load on substrata by requiring that the rate of embankment placement not exceed a stated maximum rate. Except in such situations, contractors sometimes voluntarily accelerate their performance to reduce time-related costs by finishing the project early or because they believe a faster pace is more cost effective for other reasons. Also, when unexcused delays have put the contractor behind schedule, voluntary acceleration of remaining work is the only way to regain schedule and avoid being declared in default, being assessed liquidated damages, or both. In any of these situations, voluntary acceleration on the part of the contractor has occurred.
Acceleration may also be directed by the owner, if the contract so provides. The right of the owner to direct acceleration is not an implied right; it must be explicitly provided in the contract. The changes clause usually does provide that the owner may direct acceleration of all or part of the work. Completion of contract work at a pace that is faster than would ordinarily be required pursuant to a directive from the owner is called directed acceleration. As with any other change, an owner who directs acceleration in order to complete the project earlier than contractually required must pay the extra costs incurred by the contractor in complying with the directive.
Constructive acceleration is a forced completion of the contract work in a shorter period than should have been allowed by the issue of proper contract time extensions. The normal scenario that triggers constructive acceleration is that either compensable or excusable delays are encountered by the contractor, for which properly supported claims for appropriate extensions of time are made to the owner. If the owner either denies the claims or simply fails to act, the contractor must conclude that the contract time remains unchanged and therefore make every reasonable effort to complete the work by the unextended date, usually incurring additional costs. Failure to make this effort places the contractor in a position in which the owner, shielded by a superior economic position, could contend, however improperly that the contractor is behind schedule and is breaching the contract and could declare the contractor in default. A contractor cannot passively afford to be placed in this position.
The absence of a change order granting a time extension within a reasonable time after submittal of a properly supported claim creates the constructive acceleration situation. It makes no difference if the owner eventually grants a time extension after the acceleration effort and extra costs have been expended. Constructive acceleration still will have occurred. In other words, even though time extensions may eventually be given, the failure of the owner to issue time extensions in a timely manner also triggers constructive acceleration.
Timely manner means within a reasonable period of time after submittal of the contractor’s properly supported claim for a time extension. Reasonable period of time means sufficient time for the owner to evaluate the contractor’s claim and determine if it has merit.
It makes no difference to a claim of constructive acceleration whether causal events giving rise to the claim are excusable or compensable, as long as they are not the contractor’s fault and cause more time to be needed to complete the contract. Thus, the causal events could include a strike or inclement weather (excusable events) or an owner-caused delay or change in the work (compensable events).
A Constructive Acceleration Example
Figure 19-1 illustrates a constructive acceleration situation. In the original contract, the contractor had 24 months to complete the work. Three separate cases are discussed as follows.
Case I—Delay with Time Extension
Case 1 in Figure 19-1 illustrates a delay with time extension. After 12 months of contract performance at a normal pace (sufficient to finish all work within 24 months), the contractor is delayed for six months and is contractually entitled to an extension of time. The owner promptly issues a six-month time extension, extending the original contract completion date from 24 months to 30 months. Having been granted this time extension, the contractor continues work at the normal pace for 12 additional months and completes the contract in 30 months, meeting the contract completion requirement. No acceleration has occurred. If the six-month delay was compensable, as opposed to being merely excusable, the contractor would be entitled to monetary damages equal to the extra time-related costs incurred as a result of the delay.
Case 2—Delay with No Time Extension
The second case in Figure 19-1 illustrates a delay without a time extension. It is the same as Case 1 until the end of the delay when, in contrast to Case 1, the owner denies or refuses to act on the contractor’s claim for a six-month extension of time. Since the contractor does not have a time extension, the contractor works at an accelerated pace for six months at added expense and finishes the job in 24 months, the original completion date. In this situation, the contractor finishes the work in only 18 months of actual working time. The contractor also finishes the project six months earlier than the date to which completion should have been extended. This is a classic case of constructive acceleration. Because an extension of time to which the contractor was entitled was not granted by the owner, the contractor was forced to accelerate performance by six months even though the owner did not issue a formal directive to do so.
Case 3—Accelerated Performance Without Delay
In Case 3 in Figure 19-1, accelerated performance without a delay is illustrated. After 12 months of performance at the normal pace, even though there is no delay, the owner issues an acceleration directive to the contractor, who then works six months at an accelerated pace, completing the project in 18 months in accordance with the directive, six months earlier than the original completion date.
Insofar as the acceleration aspects are concerned, there is no practical difference between Case 2 and Case 3. Case 3 illustrates directed acceleration; Case 2, constructive acceleration. In both cases, the contractor is entitled to be paid for the costs of the acceleration effort. If the delay in Case 2 was compensable, the contractor is also entitled to recover the extra time-related costs incurred due to the delay.
It would make no difference if the owner in case 2, instead of failing to issue a time extension at all, waited until the completion of the project before issuing a six-month time extension. The contractor still has been constructively required to accelerate and is entitled to recover the extra costs incurred.
It is not necessary in the constructive acceleration situation to finish the contract by the original completion date as depicted by Case 2. Now consider Figure 19-2. In this case, although the contract work is not finished until three months after the original completion date, the contractor finishes three months earlier than the date to which the contract should have been extended. This is also a valid constructive acceleration situation, and the contractor is entitled to the acceleration costs exactly as in Cases 2 and 3.
Proving Constructive Acceleration
Constructive acceleration normally results in extra costs incurred in trying to meet the unextended contract completion date. If the elements required for a valid constructive acceleration claim can be established, the contractor is entitled to recover these costs. Four elements must be proved.
Entitlement to Time Extension
To prevail in a constructive acceleration claim, the contractor must first establish entitlement to a time extension or time extensions by proving that performance was delayed by some event or condition for which the contract promises that an extension of time will be granted. A properly documented claim for a time extension must have been promptly submitted to the owner after the event or condition giving rise to the claim in accordance with the notice provisions of the contract. For instance, the Department of Agriculture Board of Contract Appeals denied a contractor’s claim for constructive acceleration because they failed to establish their entitlement to an extension of time.
On a contract to construct an earthen dam, the contractor had fallen behind schedule and was directed by the contracting officer to bring the work back into compliance with the progress schedule. After adding two scrapers to the equipment spread and commencing to work ten-hour days, the contractor demanded compensation for the increased costs, alleging that the contracting officer had constructively accelerated the schedule. In denying the constructive acceleration claim, the board held that
Acceleration is defined as a directive to increase efforts in order to complete performance on time, despite excusable delay. To prevail on an acceleration claim, a contractor must show excusable delay; notice to the government of the excusable delay, with a request for a contract extension; and the contractor must also prove that the costs claimed were actually incurred as a result of action specifically taken to accelerate performance.
Similarly, the National Aeronautics and Space Administration (NASA) Board of Contract Appeals denied a contractor’s claim for constructive acceleration because the contractor failed to furnish timely notice of the delay claimed and failed to submit evidence supporting their entitlement to an extension of time.
In a California case, the General Services Board of Contract Appeals granted a contractor’s claim for constructive acceleration costs because the government failed to grant a legitimate request for an extension of contract time in a timely manner. Heavy rains at the start of construction of a federal building made it impossible for the excavation subcontractor to proceed. The contracting officer did not grant an extension of time for this delay until 16 months after the completion of the excavation. The subcontractor was required to switch to a more expensive method of excavation to comply with the original schedule. In the words of the Board:
As a defense to a claim of constructive acceleration, a belated time extension is worthless. … It had to have become clear to anyone who did not sleep through the entire two days that the soil at the site was saturated with moisture and could not be compacted as required. The Government could not, by continually insisting on documentation of what was already known, justify its refusal to grant a time extension.
Failure of Owner to Issue Extension of Time
The owner must not have issued a time extension, or if one was issued, the owner must have failed to issue it within a reasonable period of time after receiving the contractor’s properly documented claim.
Proof of Extra Costs
The contractor must prove that extra costs were incurred in attempting to finish the project by the unextended completion date.
Completion Before Date to Which Contract Should Have Been Extended
The contractor must complete the project earlier than the date to which project completion would have been extended if the owner had issued the time extension in a timely manner. As noted previously, the actual completion date need not be as early as the original completion date as long as it is earlier than the date to which the contract should have been extended. For instance, the U.S. Court of Claims (now the United States Court of Federal Claims) determined that a contractor could recover acceleration costs on a contract that was completed 524 days after the original completion date.
Effect of an Owner’s Directive to Accelerate
Although not one of the four elements necessary to prove entitlement to damages, a fifth point is that the contractor does not have to have been explicitly directed by the owner to meet the original date in order to prove a valid case of constructive acceleration. However, if the contractor can show such explicit direction or pressure, the case becomes much stronger. What has occurred when an owner either refuses to act or denies a meritorious request for an extension of time is that the owner has breached a contractual duty. The breach is further compounded if the owner then improperly orders or otherwise pressures the contractor to finish the work by the original date. In the last case cited, the court concluded that an acceleration order need not be couched in mandatory terms. The contracting officer had issued extensive correspondence citing the original completion date and pressuring the contractor to step up progress. The contractor did not know until the end of the project how long an extension of time would be granted, and the court felt that, with the threat of liquidated damages hanging over the contractor’s head, the contracting officer’s letters improperly pressured the contractor to accelerate the work beyond the rate required if the contract had been properly extended.
Contractor’s Proper Contractual Procedure
The proper contractual procedure for the contractor in a constructive acceleration situation includes the following:
- First, promptly file a properly supported claim for an extension of time for a definite number of days, as soon as possible after each excusable or compensable causal event causing delay. When appropriate, such requests should be supported by the type of as-built, forward-looking CPM network analysis discussed in Chapter 18.
- Second, if a change order granting the claimed time extension is not received within a reasonable period of time, the contractor should protest in writing and advise the owner in writing that operations are being accelerated in an effort to meet the original unextended contract completion date.
- Third, as a follow-up to the preceding point, the owner should be advised in writing as soon as practical the details of the acceleration effort, the estimated additional daily costs, and the contractor’s expectation of payment for these costs. The contractor must then ensure that the project will be completed before the date to which the contract should have been extended.
- Finally, the contractor must carefully document all acceleration costs actually incurred to be able to prove conclusively the expenditures in an eventual constructive acceleration claim to the owner.
This chapter on constructive acceleration concluded a related group of chapters dealing with problems associated with the time allowed for contract performance and the impact of delay on performance.
The final four chapters focus on the generalized rules by which contracts are interpreted, the importance of job documentation and records in the construction industry, construction contract claims, and a discussion of the means by which contract disputes are settled.
Questions and Problems
- What is acceleration, voluntary acceleration, and directed acceleration? Why might a contractor want to accelerate voluntarily? Does the contractor normally have the contractual right to do so? Is the owner’s right to direct acceleration of contract work an implied right of a construction contract?
- What is constructive acceleration? How does it come about? When contractors are contractually due an extension of time and their claim is either ignored or not acted on by the owner, what motivates them to attempt to complete the project by the original specified completion date?
- Is it necessary in the constructive acceleration situation for the contractor to complete the project by the original contractually specified completion date? What is necessary?
- After the contractor has accelerated construction because the owner refused to grant an extension of time, is the contractor’s claim for the costs of acceleration defeated if the owner eventually relents and issues an extension of time such that, had it been issued in a timely manner, there would have been no need for the acceleration?
- What are the four elements that a contractor must prove to establish a valid claim for constructive acceleration?
- What are the four procedural steps that a prudent contractor should take in the constructive acceleration situation?
- Refer to Figure 18-11 in Chapter 18. Assume that this network schedule was the as-planned schedule submitted by the contractor to the owner at the beginning of the project. Assume further that activity J represented a contractually stipulated period after NTP within which the owner was required to turn over the area for one of the tunnel portals to the contractor. Assume further that the 40-calendar-day CRD was not present in the network and that the network completion date was thereby 1175 calendar days after NTP. Finally, assume that the contractually specified completion date was also 1175 CD after NTP.
The owner did not turn over the tunnel portal until 130 calendar days after NTP. At the end of this delay, the contractor filed a properly documented written claim for an extension of time. At that point, none of the durations of the other activities in the network were expected to change, and the contractor’s extension of time request documented the number of days claimed on the basis of a forward-looking analysis starting from the as-planned schedule. The owner refused to grant an extension of time, so the contractor accelerated the performance at considerable extra cost of activities K and I.
By what number of calendar days after NTP must the contractor finish the contract to be entitled to the acceleration costs under the doctrine of constructive acceleration?
- Under the circumstances of question 7, the contractor was able to prove that the time-related costs of each day’s delay in project completion were $2,375. To what figure in dollars (if any) is the contractor entitled, in addition to the costs of constructive acceleration?
- Appeal of Donald R. Stewart & Associates, AGBCA No. 89-222-1 (Jan. 16, 1992). ↵
- Appeal of Carney General Contractors, Inc., NASABCA No. 375-4: Sept. 1980. ↵
- Appeal of Continental Heller Corp., GSBCA No. 7140 (Mar. 23, 1984). ↵
- Norair Engineering Corp v. United States, U.S. Claims Court No. 259-80C (Dec. 2, 1981). ↵
- Ibid. ↵