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Acceleration of a contractor's performance
may arise in two situations. The first situation
occurs when a specific order is issued under the
express contract to complete the project prior
to the originally scheduled completion date.
The second theory of acceleration
is based on the effects of excusable delay on
the contractor's time of performance. When a contractor
encounters excusable delay in completing a contract,
the contractor is entitled to an equivalent, and
timely, extension of the contract time in which
to complete the work. When the owner or its representative
refuses the extension or simply does not respond,
a constructive acceleration of the contract exists
since the contractor effectively has less time
than originally promised in which to perform the
required work.
Some changes clauses specifically
allow for the owner to accelerate the time of
performance of the work. Generally, when the contractor
is directed to complete the work in advance of
the scheduled completion date, and the order is
signed by the owner or his representative, it
is clearly an ordered change and the contractor's
claim for additional compensation should be presented
in accordance with the standard change order procedures.
A more complex situation arises
when the contractor encounters an excusable delay
and requests an extension of the contract time
but the owner refuses to recognize the delay and
requires that the contract be completed by the
originally specified date. Or, in another situation,
the owner may recognize a delay but of a shorter
duration than that to which the contractor is
entitled. In these circumstances the contractor
is placed in the position of either risking contract
default if it finishes at a time later than that
required by the owner or expending extra funds
in order to overcome the excusable delay and finish
the contract as demanded. Although the owner may
not have issued any express order under the changes
clause which would qualify as ordered acceleration,
many courts have developed the doctrine of constructive
acceleration to encompass those situations where
the owner acts in such a way that it will be deemed
to have ordered acceleration.
Courts generally look to the following
factors when analyzing a claim for constructive
acceleration:
a. The contractor
has encountered excusable delay for which it is
entitled to a time extension;
b. The contractor
specifically requested a time extension from the
owner according to the contract provisions;
c. The owner failed
or refused to grant the extension;
d. The owner either:
(i) ordered completion within the original performance
period, or (ii) acted in such a way that it was
clear that the owner still required the contractor
to complete within the original performance period;
e. The contractor
gave notice to the owner that it considered the
actions of the owner a constructive change order
for acceleration; and
f. The contractor
actually incurred excess costs as a result.
When faced with a possible acceleration
situation, the contractor should make all reasonable
attempts to complete the project on schedule and
carefully document all impact costs resulting
from the acceleration. Failure to complete the
project on time exposes the contractor to potential
claims by the owner for liquidated damages, lost
rents, lost profits, and extra financing costs,
and may weaken the contractor's claim for acceleration
damages.
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