Acceleration Claims
Like delay claims, accelerating a contractor's schedule can be disruptive and costly. All parties on a construction project should be aware of the opportunities and exposure arising out of schedule adjustments.
What Is An Acceleration Claim?
An acceleration claim is a claim by a contractor for additional compensation as a result of the acceleration or resequencing of its schedule. Many construction contracts permit the owner or general contractor to accelerate a subcontractor's schedule. Sometimes these provisions are silent on the right to a change order or limit the compensation to direct costs subject to audit. This can be problematic as the true cost of acceleration does not necessarily show up in a job cost report. What if the contractor has to pull a crew from another project? Or get temporary workers? Paying a little overtime will not necessarily cover these costs.
Additionally, many contracts provide the owner or general contractor broad permission to accelerate if the subcontractor falls behind. For instance, the following provision is not uncommon: "Upon request, Subcontractor shall promptly increase its work force, accelerate its performance, work overtime, and work Saturdays, Sundays and holidays, all without additional compensation, if, as reasonably determined by Contractor, such work is necessary as a result of Subcontractor's failure or inability to maintain the current Project schedule due to Subcontractor's own defective or deficient work or other nonperformance." Unsurprisingly, general contractors and subcontractors sometimes disagree about whether the subcontractor is behind schedule, leading to disputes.
How Should a Contractor React to an Acceleration Directive?
Usually, the best course of action for a contractor is to comply with the directive and reserve the right to pursue additional compensation.
How Can The Parties Protect Themselves?
All parties should set expectations clearly in the contract. From the owner or general contractor's perspective, the ability to accelerate or resequence a contractor could be very beneficial. If an opportunity presents itself to speed up the project, they should be able to take advantage. However, the contractor should receive fair compensation if that course of action is taken. Even with that compensation, acceleration or resequencing might be in everyone's best interest. Clearly defining when the owner or general contractor has the right to make that decision and how the contractor will be compensated allows the parties to allocate risks and make informed business decisions that move the project forward smoothly and efficiently.