Programme
Acceleration pressure
A completion date was at risk and a funder was watching. The acceleration proposal arrived on a Friday and required a decision by Monday.
The situation
Nobody had asked whose delay it was
A build to rent scheme was running behind against a letting programme with real financial consequences attached. The contractor proposed acceleration: additional resource, extended hours, weekend working, all recoverable as a lump sum.
The pressure to accept was considerable and largely external. Funder covenants, letting agents and a board that had already communicated a handover date all pointed one way.
What nobody had established was whether the delay was the client's responsibility in the first place. Paying to accelerate through a contractor culpable delay is not acceleration. It is paying for the contractor to meet an existing obligation.
What we found
The proposal did not survive a straightforward examination
Four problems, any one of which would have justified declining the proposal as drafted.
Causation had not been assessed. Several delay events were contractor culpable, which meant a proportion of the recovery being purchased was already owed.
The proposed resource increase exceeded the physical capacity of the working areas, so the additional labour could not have been productive.
Extended and weekend working conflicted with the planning conditions, which would have generated a different problem within weeks.
The lump sum contained no mechanism to reconcile against actual achievement. Consequently the client would have paid the full sum whether the date was met or not.
What changed
Establish causation before discussing terms
Part of the programme was recovered. The client paid for that recovery and for nothing else.
Separate the contractor's own delay
Causation was established first, which reordered the whole conversation. The portion of delay that was the contractor's responsibility was excluded from any payment.
Pay against milestones, not in advance
Acceleration was agreed on a measured basis against defined achievement, so payment followed recovery rather than preceding it.
Test the resource against area capacity
The plan was revised to something that could physically be delivered, rather than to a labour figure that would not have fitted on the floors.
Check the proposal against the consent
Extended and weekend working was reconciled with the planning conditions before agreement, which avoided buying a solution that would have been stopped.
Why this happens
A decision taken under someone else's clock
Acceleration decisions are made under time pressure, with external parties applying force and with the only detailed analysis in the room supplied by the party being paid. That is not a position from which anybody makes a good commercial decision.
Cost control and variations establishes causation and quantum before commitment rather than after it, and maintains the contemporaneous record that makes causation demonstrable at the moment the question is asked.
Questions
Asked about acceleration
What is constructive acceleration?
It is what happens when a contractor is entitled to an extension of time, does not receive it, and increases resources to meet the original date rather than accept the exposure to damages. No acceleration is instructed, yet the cost is incurred, and the contractor later seeks to recover it. Whether that recovery succeeds depends heavily on the contract and on the records. It is one of the more difficult claims to defend once it has been allowed to develop.
How should acceleration be priced before it is instructed?
By resource and by the specific measures proposed, not as a lump sum against a date. A proper acceleration proposal names the trades, the additional shifts or gangs, the plant, the sequence change and the recovery each measure is expected to deliver. That lets the client test whether the money buys the time. A single figure to recover four weeks cannot be tested, and it becomes the basis of an argument when the four weeks are not recovered.
What happens if acceleration is paid for and the date is still missed?
That depends entirely on how the agreement was framed. Where acceleration was bought as a set of measures, the contractor has delivered what was purchased and the client carries the outcome. Where it was bought as an outcome, with the date as the deliverable, the position is different and considerably better for the client. Almost every dispute in this area comes down to which of those two the parties actually agreed, which is why the drafting matters more than the price.
Is it ever cheaper to accept the delay?
Frequently, and the calculation is straightforward enough to do properly. Set the cost of the acceleration measures against the cost of the delay: liquidated damages if you are the contractor, prolongation and lost revenue or interest if you are the client. Where the delay has no hard consequence beyond the cost of time, acceleration rarely pays. Where a funding condition, a letting date or a seasonal window sits behind the date, it often does.
How do we keep control of an accelerated programme?
By reporting cost against the acceleration measures separately from the base works. Once additional shifts and resources are absorbed into the ordinary valuation, the effect of the acceleration becomes impossible to isolate, and so does any argument about whether it worked. Keeping the two streams apart also gives an early signal if the spend is running ahead of the recovery, which is the point at which the decision should be revisited.
Related scenarios
Where this connects
Acceleration proposal on the table and a deadline to accept it?
Send the proposal and the delay record. We will tell you whose delay it is before you agree to pay for it.
Insights