Reltic Independent Commercial Advisory
Services
Project types
Who we work with
Projects Scenarios Insights Process About
Contact 020 3576 2851

Cost control and variations

Acceleration, and whether it is worth paying for

Acceleration is one of the few things on a construction project where spending more money can genuinely save money. It is also one of the easiest to spend badly.

When it makes commercial sense

Acceleration means paying to recover programme, usually through additional resource, extended working hours or resequencing. It is worth considering whenever the cost of being late exceeds the cost of going faster.

On development schemes that comparison is often clear cut. Finance costs run daily, a sales or letting date may be contractually committed, and a missed seasonal window can push income by months. Against that, the cost of additional labour for a period can look modest.

The mistake is not deciding to accelerate. It is deciding to accelerate without establishing what is actually causing the delay.

It is worth distinguishing acceleration from mitigation. Mitigation is what a contractor is generally obliged to do anyway: taking reasonable steps to reduce the effect of a delay at their own cost. Acceleration is doing more than that, at somebody’s expense, and the boundary between the two is where most of these conversations start.

Establish the cause first

If the delay is the contractor’s responsibility, they may already be obliged to recover it at their own cost, and paying for acceleration means paying for something you are entitled to anyway.

If it is an employer risk event, the contractor may be entitled to time and possibly to cost, and acceleration is then a separate commercial deal on top of that entitlement.

Where it is a mixture, which it usually is, the analysis has to be done before money is offered. Otherwise the payment quietly settles a delay argument on terms nobody negotiated, and the entitlement question disappears into it.

What acceleration actually costs

Additional resource is the visible element and rarely the largest. Overtime carries premium rates and declining productivity. More operatives in the same space produce congestion, which reduces output per head. Resequencing can require work to be done in a less efficient order, and out of hours working brings supervision, welfare and sometimes noise consent constraints.

The result is that acceleration is not linear. Recovering two weeks may cost a certain amount, and recovering four may cost considerably more than twice that, because the easy measures are used first.

A contractor pricing acceleration properly will reflect this. A contractor pricing it optimistically will take the money and miss the date, which leaves you having paid for a recovery that did not happen.

Constructive acceleration, and why to avoid it

There is a pattern where the employer refuses an extension of time the contractor believes they are entitled to, and the contractor accelerates to avoid damages, then claims the cost afterwards. That is usually described as constructive acceleration, and it produces the worst version of every argument at once.

The dispute then covers entitlement to time, whether acceleration was required, whether it was reasonable, and what it cost, all argued retrospectively from records that were not kept for the purpose. [VERIFY: how the contract in use treats acceleration, and whether any express mechanism exists for instructing it.]

The avoidable version is straightforward: decide the extension of time question on its merits, then treat acceleration as a separate agreement with its own price and its own scope.

Agree it properly before it starts

An acceleration agreement needs four things: what is to be recovered and by when, what measures are being taken, what it costs and how it is paid, and what happens if the date is not achieved.

The last of those is the one usually omitted, and it is the one that determines whether you have bought a result or an effort. Paying a lump sum for acceleration with no link to the outcome is paying for intent.

Payment structured against achieved milestones aligns both parties, and it is a normal commercial arrangement rather than an aggressive one.

What this means for you

Before agreeing to pay for acceleration, get the delay analysis done. The question of who owns the delay decides whether you are buying something or being charged for something you already own.

Then agree the recovery, the measures, the price and the consequence of failure in one document, before the resource arrives on site.

That assessment is part of cost control and variations work, and where the position has already deteriorated our scenario on acceleration pressure describes how it typically unfolds.

A final point on sequencing. Acceleration measures take time to become effective, because additional labour has to be recruited, inducted and organised. Agreeing acceleration late in a programme buys less recovery per pound than agreeing it early, which is another reason the delay analysis is worth doing as soon as the slippage appears rather than when the completion date is already at risk. Where we are named as employer’s agent, the delay analysis and the acceleration agreement are handled together, because separating them is how the entitlement question gets lost.