Many commercial construction contracts have deadlines for the contractor or subcontractor to complete its work. Typically, a contractor is entitled to the time allowed under the contract to finish its work. If a contractor is forced to complete its work earlier than the specified completion deadline, the contractor may be entitled to additional compensation for accelerating its work.
There are two types of acceleration–actual acceleration and constructive acceleration. Actual acceleration occurs when a contractor is expressly directed to pick up the pace of the work. Constructive acceleration happens when a contractor is entitled to a time extension, but the project owner refuses to give the time extension and requires the contractor to complete its work by the original deadline.
At least one federal appellate court has outlined the following five things a contractor must prove to successfully prosecute an acceleration claim:
(1) that the contractor encountered a delay that is excusable under the contract;
(2) that the contractor made a timely and sufficient request for an extension of the contract schedule;
(3) that the [owner] denied the contractor’s request for an extension or failed to act on it within a reasonable time;
(4) that the [owner] insisted on completion of the contract within a period shorter than the period to which the contractor would be entitled by taking into account the period of excusable delay, after which the contractor notified the [owner] that it regarded the alleged order to accelerate as a constructive change in the contract; and
(5) that the contractor was required to expend extra resources to compensate for the lost time and remain on schedule.
While not all courts have required a contractor to prove the above five points, it is safe to say that if a contractor can prove all five requirements, the contractor should win on an acceleration claim.
Of the above five requirements, the fourth point–that the owner ordered the contractor to accelerate its work–can be one of the trickier things to prove. More times than not, an owner will not expressly order a contractor to “accelerate” its work in writing. Instead, the contractor will have to show that the owner coerced the contractor into maintaining the project completion deadline, despite the contractor’s entitlement to a time extension.
Another thorny issue is whether the contractor was entitled to a time extension. This may require the contractor to prove that it encountered an excusable delay while building a project. An excusable delay is one that was beyond the contractor’s control and unforeseeable.
There may also be situations where an owner grants a contractor’s request for a time extension, but the owner does not give the contractor all of the time to which the contractor was entitled. In that case, the contractor may have to prove that it encountered an excusable delay and the amount of time which the contractor was given was insufficient.
Construction disputes are almost always document intensive and claims for acceleration are no exception. Common documents used to prove an acceleration claim include the following:
- Correspondence, including e-mails;
- job cost reports;
- meeting minutes;
- change orders; and
- pictures and videos.
Finally, a contractor considering making an acceleration clam should always think about its damages. Acceleration damages may include increased labor costs (overtime and double shifts), equipment costs (bringing more equipment to the job to complete work faster), material costs (material suppliers charging more to expedite deliveries), supervisory costs, and home office overhead because an accelerated project requires more attention.
Bottom Line: Like many construction claims, acceleration claims can be and usually are very complicated and difficult to prove. But if a contractor is forced to complete a project by the original completion deadline, even though the contractor submitted a valid time extension request, the contractor may be entitled to additional compensation to accelerate its work.
Contractors thinking about making an acceleration claim should discuss the pros and cons of making such a claim with experienced construction counsel. If you have any questions about acceleration claims, please feel free to send me an e-mail.
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