This is the second in a three-part series. The previous post discussed the brainstorming by the Employer for formulating an Acceleration clause. This post shall discuss payment modalities and how standard contracts deal with acceleration.

Payment methodologies for acceleration may be:

  • Fixed lump sum payment (lump sum amount or percentage of contract value). This payment may be conditional on the completion of deliverables by the revised dates with and/or Liquidated Damages.
  • Payment of reasonable costs. This may be less risky to the Contractor than the first method but places a greater obligation on the Contractor to maintain accurate records and prove additional costs.

Dealing with delays during an acceleration period also needs some thinking. In extreme cases, the Contractor may lose out on additional costs and also be subjected to Liquidated Damages.

Other aspects that need to be considered are:

  • If midway the Contractor realises that he will not be able to achieve the revised completion date, should he abandon his Acceleration effort?
  • In the case of Employer-caused/neutral delay during the Acceleration period, will the revised completion date be extended and/or will the Contractor be entitled to additional costs?

None of these aspects can be precisely formulated in PCC, but it is preferable if both parties arrive at a mutual understanding of these issues.

Acceleration Under Standard Forms of Contract

FIDIC 1999

There is no clause for acceleration.

FIDIC 2017

Sub-Clause 8.7 (Rate of Progress) mentions “Sub-Clause 13.3.1 (Variation by Instruction) shall apply to revised methods including acceleration measures, instructed by the Engineer to reduce delays from resulting from causes under Sub-Clause 8.5 (Extension of Time for Completion).

Guidance Notes to FIDIC 2017

  1. The Engineer has no power to reduce time of completion.
  2. The Employer may ask the Contractor to speed up to reduce Period of (Excusable) Delay caused due to events listed in Sub-Clause 8.5, but only within the relevant time for completion.

Presumably, this implies that acceleration measures cannot be instructed to reduce the (extended) time of completion already accorded but only to reduce the impact of (excusable) delays that have happened after this.

FIDIC contracts have a clear preference for a supplemental agreement for achieving acceleration.

NEC4

NEC4 has a very clear and simple clause, the gist of which is:

Either party may propose acceleration to achieve an earlier completion date. The PM instructs the Contractor to submit quotations in either case to include changes in key dates and associated additional costs. Based on the quotation, the PM accepts the Acceleration or the completion and key dates remain unchanged.

Indian Standard Contracts

Indian Standard Contracts have no clause which deals with acceleration.

This is the second in a three-part series. The next post shall discuss why and how we had to modify these clauses in PCC based on the specific requirements of the project.

The previous post can be read here.

This post was contributed by Amit Kathpalia FICCP, MRICS. This was originally a LinkedIn post. Amit is the author of Practical Construction Contract Issues Which Are Not Commonly Understood. 

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