This month’s contract clinic question comes from a contractor worried about whether it can claim for working overtime to deliver a school project in time for the new term. Mark Newton explains.
We’re a contractor on a school project in the north east. The project was running behind, so we brought in more resources so the school could reopen in September. We managed to get the school back on track, but now the employer is refusing to cover the cost of the extra resources. What can we do?
To determine the next steps for the contractor, it’s important to understand the term ‘acceleration’ in contractual terms, and the different types. First, acceleration may mean different things to different people. One helpful definition comes from the Society of Construction Law (SCL), which defines it as being:
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“The application of additional resources or alternative construction sequences or methodologies seeking to achieve the planned scope of work in a shorter time than planned or execution of additional scope of work within the original planned duration.”
Essentially it can be encapsulated as a period where you have increased productivity to complete the works either before the completion date or to mitigate any delays to the project which you may be culpable for.
It is important to establish why the project is running behind. It may be that the contractor caused a delay to the project. If so, it is likely that the reason for accelerating is to complete the works by the contractual completion date. In doing so the contractor may avoid liquidated damages being levied by the employer. This form of acceleration is commonly referred to as voluntary.
Alternatively, if the employer has caused delay (knowingly or not), you may be entitled to recover the costs associated with accelerating the works, provided the acceleration has been instructed. Typically, there are two types of acceleration associated with employer-led delays: agreement and constructive.
Agreement acceleration
Agreement or express acceleration is where the employer formally instructs the contractor to accelerate their works, to achieve the contractual completion date. Most standard forms of contracts include a provision to accelerate the works.
If it is a state school project, the possibility is that you’re working under NEC. The NEC 4 provides for agreed acceleration under Core Clause 36. Private schools and other projects are most likely under JCT. JCT provides for the same process under its Schedule 2 Variation and Acceleration Quotation Procedures.
Be sure to check what your contract says and whether it’s been amended or not.
Constructive acceleration
Generally, it is more difficult to recover monies associated with constructive acceleration.
Here, you may accelerate to complete the works by the contractual completion date when the employer has caused a delay they do not recognise. In such a scenario they may refuse to award an extension of time. In this scenario, the contractor accelerates the works to prevent the employer from applying liquidated damages for finishing late.
When dealing with constructive acceleration, it is worth highlighting the Society of Construction Law (SCL) Delay and Disruption Protocol advice:
“Where the contractor is considering implementing acceleration measures… the contractor should first take steps to have the dispute or difference about entitlement to an extension of time resolved in accordance with the contract dispute resolution provisions.”
Each scenario detailed has differing outcomes on the ability of the contractor to recover the costs associated with accelerating the works and achieving the contractual completion date. With voluntary acceleration, you will not be able to recover the costs associated with this form of acceleration. The contractor is culpable for causing the delay to the completion date initially.
Agreement acceleration
Agreement acceleration means the parties have agreed to accelerate the works and an acceleration quotation has been accepted and engrossed into the contract. If the employer refutes acceptance of the agreement, the contractor can seek to recover costs through dispute resolution procedures in the contract. Be careful though. Even if an agreement to accelerate is in place, keep contemporaneous records, in case you don’t achieve acceleration for any reason.
Constructive acceleration carries an inherent risk for the contractor. This is because there is no formal agreement in place for the employer to pay out any costs associated with the work being accelerated. In addition, the courts in England and Wales have not taken kindly to constructive acceleration. It would be more favourable for the contractor to have pursued the decision to accelerate on the refusal of the employer to award a genuine entitlement to an extension of time.
Key to all of this, as always, is the maintenance of good records. To prove an entitlement to time or money and to prove both the cause of any delay and the result of any acceleration, you will need good, detailed and contemporaneous records. The better and more precise the records, the more likely that time or money will be recovered.
Mark Newton is consultant QS at Decipher.
