EXPO 2020 in Dubai is fast approaching. The immovable deadline for this incredibly important event for the UAE will put significant time pressure on all those involved, especially on contractors who will have undoubtedly faced delays and other challenges during construction.
In the third of a series of articles in the lead-up to EXPO 2020, Driver Trett’s Adrian Dobbie-Holman looks at acceleration, what it is and what can be done to help ensure that if costs are expended in taking acceleration measures, they are recoverable.
Acceleration is the act of increasing the originally planned or current rate of progress of works so as to complete a project earlier than would otherwise be the case.1
Construction projects are often beset by delays and disruption. Extensions of the time for completion are often the subject of disagreements, which are often resolved long after the event. Furthermore, some projects, such as EXPO 2020 in Dubai, have critically important and effectively immovable completion dates. It is therefore likely that some contractors working on projects such as EXPO 2020 in Dubai will have to accelerate all or part of their works. This can be achieved by increasing resources, working hours, or changes to design or working methods or sequences. However, engaging additional resources to reduce the duration of an activity does not always increase cost.
Unfortunately, acceleration is often confused with mitigation, and depending on the wording of the contract, mitigation might be one of the contractor’s obligations. The extent of that obligation is a subject in itself and will be covered in a future article. A commonly used defence to acceleration claims is that the action taken was mitigation, not acceleration.
The SCL Delay and Disruption Protocol describes acceleration as a type of mitigation, albeit a type that incurs additional costs that are reimbursable if the delays were the employer's risk.2 It states that unless otherwise stated in the contract, or agreed, a contractor has a general duty to mitigate the effects of employer delay events but that this duty does not extend to adding extra resources or working extended hours.3
There are three types of acceleration:
- Agreed;
- Unilateral, by the contractor;
- Constructive (no alternative);
Agreed acceleration is where both parties to a contract agree that one party will accelerate, with or without additional payment. Unilateral acceleration is where the contractor accelerates in order to complete on time and avoid damages or to complete early for business reasons or for incentives.
Constructive acceleration is where the contractor may feel it has no alternative, for example where the contractor is entitled to an extension of time which has not been awarded. This might be a situation that contractors will face on EXPO 2020. However, there is no recognised concept of constructive acceleration or mitigation under UAE law, although it is generally understood that a contractor is not required to incur additional costs to mitigate an employer caused delay.4 Under English law, additional costs incurred by a contractor to finish earlier than the extended time for completion that it is entitled to may be reimbursable either as a variation or as a claim in damages.5
Under “Rate of Progress” clauses in FIDIC standard contract forms, which are used in the UAE (typically in modified form), contractors might be instructed to take steps to expedite progress at the risk and cost of the contractor if the cause of the delay is not one that gives rise to entitlement to an EOT under the EOT Clause.6 However, taking such steps is mitigation of contractor caused delay, not acceleration.
So, what should contractors do to demonstrate entitlement to, and maximise recovery of, acceleration costs?
- Check precisely what the contract states about acceleration and related concepts such as “rate of progress”, mitigation, “best endeavours” or “available resources”;
- Be aware of the dispute resolution process in the contract, and which law governs the contract and the process;
- Ensure full compliance with all contractual claim pre-conditions such as notices and detailed particulars;
- Have a claim for an extension of the time for completion in place, if applicable;
- Maintain full contemporaneous records of the acceleration costs;
- Make sure that planned and additional resources employed are accurately recorded in reports issued to the employer;
- Be proactive and transparent and keep the employer regularly updated through correspondence and reports, especially if acceleration efforts are delayed or disrupted. This ensures that the employer is not denied the opportunity to make informed decisions.
If you have any questions around this subject or if you wish to have a no-obligation discussion with one of our highly experienced consultants to discuss assistance around preparing and pursuing a claim for acceleration, please contact dubai@drivertrett.com or call +971 4 453 9031
1 RICS Guidance Note, Acceleration, 2011
2 Society of Construction Law Delay and Disruption Protocol, 2nd Edition, Guidance Part A paragraph 12
3 Society of Construction Law Delay and Disruption Protocol, 2nd Edition, Core Principle 15
4 Ready, set, accelerate! Constructive acceleration in the UAE, Beale & Co, May 2019
5 Keating on Construction Contracts, 10th Edition, The Hon Sir Vivian Ramsey; Stephen Furst, 8-042
6 E.g. Clause 8.6 of FIDIC Red Book 1999