Go! Go! Go!
Acceleration in construction is the process of moving a project towards completion at a faster pace than originally anticipated. The idea is to finish works before the contracted date and end the programme before completion is due. In most circumstances, this will be a client driven change to the programme of works and can be for a multitude of reasons; they may be looking to handover a building earlier to a potential buyer, they might have obligations to investors, or just want to move onto the next project and feel the initial date was too far out to satisfy their stakeholder’s fiscal objectives.
When the contractor incurs additional costs for meeting the client’s new timescales, there is potential recourse for remuneration. The contractor can make an application for the additional costs, which can typically be done without having to provide proof that the works are actually being completed at a quicker pace than forecasted in the programme of works, or than the contract requires – merely by showcasing that they have made satisfactory attempts to do so, and these new measures and tweaks to the delivery plan have incurred additional costs.
There are occasions when the client or stakeholder is not the main driving force behind a programme of works acceleration and the contractor themselves are the instigators of completing a contract ahead of schedule. This can, again, be for a number of reasons; primarily that they wish to move onto a new contract and will be required to free up their labour and resource streams in order to do so, it can be that they wish to save on overall costs and the project has reached a stage where it is beginning to drag or more at a meandering and inefficient pace, in some cases it can be that they are motivated by bonuses offered by the client for early completion and these outweigh the cost involved with accelerating the programme to the requisite speed required to reach the aforementioned targets.
How to Accelerate?
There are an array of different techniques and ways to increase the speed of a programme of works and to accelerate the overall progress of a construction project, some of the most common are as follows:
- Procuring long lead items as early as possible and storing those materials/plant/consumables on site, which will alleviate the risk of manufacturer and supplier delays having a knock-on effect to the projects running time.
- Alternative methods of construction, such as off-site manufacturing and modular units – this enables items to be completed before they ever arrive on site, and shortens the length of time spent building on site. These modular or lightweight structures can then be dropped in place and if programmed correctly can save relatively large portions of time.
- Additional ‘labour resourcing’, more operatives means more work completed, (in theory!), this will have to be managed, you do not want to risk inefficient working and put yourself in a ‘too many cooks’ situation.
- Additional shifts and/or overtime, working day and night shifts as opposed to just one or the other, this approach tends to reap more rewards in the Value for Money category of Programme Acceleration, as you are engineering additional time rather than additional operatives.
- Changing the specification, it’s possible to use a less complicated finish or build if it achieves the same end result but differs aesthetically for example.
- Reducing the Scope of Works itself and passing some items/responsibilities back to the client, or onto different work streams, such as making them Planned Preventative Maintenance items further down the line for a Facilities Management company to incorporate within their scope. Descoping certain works from the programme, as long as the contractual obligations are still met, can be a very effective way of accelerating in construction.
All of these methods differ from each other, but most share the likelihood of incurring further costs without any guarantee of earlier completion.
What do different forms of contract say about acceleration?
It’s important when you’re under contract to make sure that agreements between the contractor and the client are in place to protect both parties and the integrity of the project. This will set clear parameters on what the measures being employed to accelerate the programme are, what their associated costs might be and who is ultimately responsible for that cost and any potential risks or liabilities.
Different contracts will have different ways of managing acceleration and what needs to be declared in the event that acceleration is used on a project. The JCT and NEC deal with it as follows:
Under Schedule 2 of the JCT, which pertains to Variation Quotations and Acceleration Quotations, it states that:
‘If the Employer wishes to investigate the possibility of achieving practical completion before the Completion Date … the Architect/ Contract Administrator shall invite proposals from the Contractor in that regard.’
It’s worth remembering at this point, the Date of Completion could either be referring to the initial Date of Completion as set out in the original terms of the contract, or it could be talking about a revised date, due to an extension of time which has been submitted and subsequently granted on the project. Therefore, a client or employer may actually just be looking to finish the project by the initial contracted date, even though they are responsible for the delays to the programme through their extension of time.
When submitting the Quotation to carry out the acceleration of an agreed programme, the contractor needs to make it clear what time will actually be saved by implementing the strategy and measures outlined in this proposal, and what costs are involved in making this possible, outlining the specific breakdown of costs; ‘direct costs, consequential loss and expense and an allowance for the cost of preparing the quotation.’, is a requirement of submitting the Acceleration Quotation.
When a contractor is presented with an invitation to make proposals under the JCT form of Contract, in relation to acceleration agreements – it must either provide the aforementioned quotation or explain why they are unable to do so. Occasions will of course occur where it is wholly impracticable and not reasonable to assume the early completion of works, the contractor must still respond, detailing why they would be unable to accelerate the programme.
Whichever course of action they choose to take, there are timeframes involved with submitting the proposal or the dismissal, and as standard there is a 21 day limit, unless an extension is otherwise agreed, (it is key to check the contract at this point and see what has previously been outlined or agreed), – validity is then held for a 7 day period before acceptance or dismissal of the proposal, or a response to a dismissal, (this period of validity starts from the latter date between receipt of invitation, or once sufficient information was provided for the preparation of the quote).
In most circumstances, a month for a decision to be made, especially in regards to accelerating the programme, will be far too long in a construction project. There needs to be scope for a reasonable agreement to be reached that does not expose either party to risk of unrecoverable costs, but which will provision enough time to guarantee the agreement is well prepared.
In ‘Core Clause’ 36 of the NEC3 standard form of contract (June 2005.);
‘the project manager may instruct the contractor to submit an acceleration quotation. As with the JCT form, the stated aim of acceleration is to achieve completing before ‘the Completion Date’.
Similar to the JCT Standard form of contract, this Completion Date could well be the initial date outlined in the Contract, or it could be a revised date due to an extension of time granted on the project.
The main difference between the NEC3 and the JCT with regards to acceleration of time is that under the NEC3 it is NOT for the contractor to outline whether the acceleration is achievable, that responsibility rests with the project management team who will issue their revised date for completion.
Upon receiving that instruction, the contractor will prepare the revision to their programme for delivery completion in line with the adjusted date and the quotation for the cost of doing so. The contractor can still deign to supply a quotation, but as with the JCT form of contract, they need to provide their reasons for being unable to do so. In the majority of cases, this will occur when a contractor does not feel the newly proposed date is at all achievable or indeed reasonable.
If a contractor is in delay, should they accelerate/mitigate without instruction?
If a contractor has fallen behind on a programme due to their own shortcomings, at least in relation to planning, procurement or people – then they are well within their rights to accelerate, in line with any contractual obligations and in-keeping with all legal regulations such as CDM (Construction Design and Management) 2015. If anything, they would be encouraged to do so.
Meeting the deadlines as dictated in any contract of works is beneficial for both the client and the contractor. It helps to evade any charges for late delivery and allows both parties to move onto the next project in the shortest possible time.
There is every chance that the programme has been delayed due to the shortcomings of the client, though failure to provide drawings, or information that the contractor requires to proceed on certain design elements, even failure to provide instructions or responses to variation quotations, can cause significant delays in a project outside of the contractors control. In this situation, the contractor should refer to the above information and submit their quotation for acceleration and await instruction.
A key element to remember in either scenario is that every contract or order can vary in its definition of responsibility for acceleration and/or mitigation, and all parties need to refer to that document as a guidance tool for how to proceed when programmes fall behind scheduled dates of completion.
Tips for developers that need to accelerate…
1. Maximum Time
Making sure to take advantage of the maximum amount of time a client or stakeholder will allow you to have in order to complete the programme, even at an accelerated pace. The worst thing you can do is agree to an accelerated rate of works and then be unable to deliver within that timeframe. In doing so, you will have contractually exposed yourself to the risk of delivering to the new timescales in exchange for the financial compensation as outlined in your Acceleration Quotation.
2. Cost Efficiency
A contractor should complete an internal cost benefit analysis to make sure that it’s worth their time and resource to accelerate a project – there is no point in a contractor committing to an acceleration of the contract if it is going to cost them undue time, money, and risk to deliver.
The client will also carry out a Value For Money exercise on any quotations submitted by the contractor to ascertain whether the acceleration is beneficial to them – or if maintaining the present course is more beneficial to the overall contract sum. This can be a particular stumbling block when a client needs to return to investors or stakeholders to request further capital in order to satisfy the contractors quotations for acceleration.
Acceleration is a key part of the construction process, but it really can be an area of contention between contractors and clients – there are many potential pitfalls to navigate and a lot rides on getting any acceleration strategy right. Remember, Contracts such as the JCT and NEC3 are there to protect both parties and should always be referred to when something like acceleration or mitigation is imminent in a project. If in doubt, maintain good channels of communication between client and contractor and ultimately, refer to the contract.
Image credit: iStock.com/franckreporter
About Callum Brown
Callum is a Contracts Manager in the Passive Fire Protection Industry, with previous experience as a Quantity Surveyor and Operations Manager in Fire Protection, Construction, and Plumbing & Heating.