Introduction

“Accelerating” the execution of construction works is a frequent occurrence in construction projects. It refers to the actions taken by the contractor to advance the execution of one or more activities that were already scheduled, in order to complete the work in a shorter time than originally agreed.

These actions may include one or more of the following: (A) increases in materials, equipment, tools and/or labor; (B) modification of the work program; (C) changes in the executive project or design.

It is also important to specify that the “acceleration” action corresponds exclusively to the contractor. However, this action can be proposed by either: (A) direct instruction of the contracting party, or (B) proposal of the contractor.

Economic effects of acceleration on the construction budget

When an acceleration event occurs, an economic impact is generally registered. Specifically, increases in labor, materials, tools, etc. imply an investment of resources that alters the originally programmed flow.

To understand this better, consider a real case involving the construction of a paper mill. The parties agreed to demolish an old mill in order to build a new one. During the construction phase, the owner had to change the original design after the contractor found many concrete elements in the subsoil, causing suspension of the work. To compensate for the resulting delay, the contractor, following the owner’s request and without submitting a budget, accelerated the construction to complete the work within the originally agreed timeframe.

To achieve this, the contractor increased the labor force and demolition machinery using her own financial resources, yet poorly documented the entire process. This meant disregarding the contract’s clear statement that all change orders needed to be written and signed by the owner’s legal representative and the supervising company.

Even though the contractor had records of expenditures made, there was insufficient precision to determine that these expenditures were applied specifically to the construction of the paper mill. Due to the lack of an agreement and budget to “accelerate” the work, it was necessary to prove both the existence of the acceleration and its economic impact. The contractor was able to prove the economic impact materially, but there was no conclusive proof that such expenditures were applied to the work described. The matter went to controversy and the contractor only recovered a minimal part of what she had invested.

Acceleration in the construction contract

In Mexican public and private construction contracts, clauses related to “acceleration” are generally not agreed upon. The use of model contracts such as FIDIC, NEC, AIA, or CONSENSUSDOCS is not common. In public construction contracts, each contracting entity typically uses its own model. In private contracts, specifically designed models for the project are used.

The NEC4, for example, establishes that either party may propose the acceleration of the project through a quotation within three weeks, with acceptance or rejection within three more weeks. The relevant aspect of this type of stipulation is that “acceleration” is recognized as an event with economic effects that deviates from the originally agreed term but can be agreed by the parties before it happens.

Acceleration regulated by law

Mexican laws governing public or private construction contracts do not specifically provide for “acceleration.” Neither party may invoke any law, regulation or rule as an action or exception in construction claims for acceleration. However, the laws do regulate damages for contract breach and changes to the originally agreed term and amount.

Agreement to accelerate the construction work

When neither the contract nor the law regulates the hypothesis of acceleration, but the need for it arises during project execution, the parties may agree to it by means of a written agreement that establishes: (A) the origin of the need to accelerate; (B) the effects on the agreed amount and execution period; (C) the actions and measures to be implemented; (D) the new execution program; (E) the budget with an acceleration cost breakdown; and (F) the measures and penalties for delay in the execution of the accelerated program.

Conclusions

  1. Acceleration implies a deviation from the originally agreed terms.
  2. Economic quantification has two perspectives: (A) Forensic, when the event has already happened, a method must be used to quantify the economic impact; (B) Agreed, when the parties agree on the event beforehand, fixing in advance the impact on time and cost.
  3. Acceleration is not regulated in Mexican laws or public contracts. In Mexican private construction contracts, it is generally not agreed upon either.
  4. To demonstrate acceleration and its economic impact forensically, a method of quantification and costing of existing material evidence must be used.