Understanding Constructive Acceleration Claims on Federal Projects
By Oles Morrison on October 16, 2018 | Posted in Technology
Customers will frequently want you to complete performance sooner than may be required by the contract. When presented with such a dilemma, contractors face the challenge of keeping the customer happy while performing the work in a manner that will meet specifications and the contractor’s business expectations. To navigate this process effectively, it is important for contractors to have a working knowledge of the circumstances in which an acceleration claim may arise and what to do when such an event does arise in order to manage the project in a smooth and efficient manner that protects the contractor. As this post discusses, while there are different types of acceleration, a common situation encountered by contractors on federal jobs is constructive acceleration. This occurs where, because of an intervening event that creates an excusable delay in the project, a contractor has a justified claim for an extension of time, the contracting officer knows about the contractor’s claim and the circumstances causing the delay, but the contractor is forced to incur additional costs due to the customer’s refusal or failure to grant an extension, thus requiring the contractor to complete the work as originally agreed upon prior to the rise of the delay. Of course, if the customer grants an extension, the contractor is not required to accelerate and, thus, any costs incurred to accelerate the project will be deemed voluntary and not compensable.
The Constructive Acceleration Claim:
Constructive acceleration has its origins as a common law claim—meaning it was developed by the courts/boards of contract appeal, rather than being created by regulations such as the Federal Acquisition Regulation. The doctrine allows a contractor to recover additional compensation when, despite some intervening excusable delay in the project that has arisen through no fault of their own, the contractor is nevertheless required by the customer to accelerate its work by being required to comply with the contract schedule, despite an excusable delay. To prevail on a constructive acceleration claim, the contractor needs to prove four elements: (1) the existence of an excusable delay; (2) knowledge of the contracting officer of the excusable delay; (3) order to accelerate; and (4) the contractor, based on the order to accelerate, accelerated the work and incurred additional costs.
- Existence of an Excusable Delay
In order to recover for a constructive delay, the first thing a contractor must show is that there is an excusable delay—if there is no excusable delay, there can be no constructive acceleration. This first element is arguably the most important, as it goes to the heart of a constructive acceleration claim. There are many factors, even unintended ones, which arise during the course of any project but most are not excusable delays which may give rise to additional compensation if the customer decides to hold the contractor to the original schedule. However, if an excusable delay does arise – typically some act of God, war, embargo or strike — and even if the contract is silent as to the contractor’s entitlement to a time extension, the contractor will be entitled to recover its costs for constructive acceleration if it is shown that the contractor was forced to accelerate to overcome an excusable delay (and the other elements of constructive acceleration are satisfied).
- Contracting Officer’s Knowledge of the Excusable Delay
Second, the contractor must show that the contracting officer had knowledge of the excusable delay. While this second element is frequently thought of as a requirement that the contractor make a timely claim for extension due to an excusable delay, you may have a constructive acceleration claim even where no claim is made to the contracting officer so long as the contracting officer has actual notice of the delay and your actions to address it. However, in order to recover for constructive acceleration absent a formal request for an extension, the contractor must show that (1) the contracting officer has clearly indicated that no time extensions will be granted, and (2) the contracting officer has actual knowledge of the excusable delay.
- Order to Accelerate
Third, the contractor must show that the contracting officer has given some order that could reasonably be construed as a demand to accelerate the work. Typically, this takes the form of the contracting officer either demanding work be completed pursuant to the schedule in the face of a clear excusable delay, or the contracting officer rejecting a request for an extension of time due to an excusable delay and subsequently demanding that the work be completed on schedule. While a direct order is the most common situation leading to a constructive delay, contracting officers have been found to have ordered acceleration in the following circumstances: (1) failing to review and grant an extension (with nothing more, including no direct order to meet the schedule), which took away the contractor’s ability to perform at a normal pace, and (2) delaying granting a time extension where the contractor was forced to modify/accelerate its schedule by the time the time extension was eventually granted.
- Causation and Damages
The final element of constructive acceleration is evidence that the contractor accelerated its work in response to the contracting officer’s order, and that the contractor incurred additional costs as a result. In most cases, particularly cases in which the contractor requested an extension that was denied, it will be fairly obvious if the contractor accelerated the work in response to the contracting officer’s order. In addition to proving causation, the contractor must be able to show that it incurred additional costs in accelerating the work.
Other Notes for Constructive Acceleration:
- A contracting officer is able to cut off liability for constructive acceleration by granting a time extension, even if the contractor was originally forced to accelerate
- Courts have typically refused to award damages for acceleration where there is a concurrent, inexcusable delay by the contractor and the contract allows the government to order acceleration for contractor-caused delays.
While constructive acceleration claims provide contractors with a safeguard against incurring costs due to an excusable delay, there are several milestones, sometimes hurdles, that a contractor must check off or overcome in order to prevail. Accordingly, while there is some flexibility in the standards which the contractor must meet, the safest approach, whenever possible and which should always be carefully documented, for a contractor experiencing an excusable delay is to: (1) make a request for a time extension as soon as possible, and include the facts and circumstances giving rise to the delay and your efforts to date in addressing the matter, regardless of the likelihood that the contracting officer grant an extension, and (2) if the contracting officer does ultimately deny the extension, carefully document that denial as well as the contractor’s acceleration efforts and resultant costs. Performing these steps, and documenting them, will help ensure that there is sufficient evidence that the contracting officer was aware of the excusable delay and evidence of causation and damages.