The Armed Services Board of Contract Appeals in September 2021 issued a partial summary judgment order dismissing a contractor's constructive acceleration claim asserting that the Government had not timely reviewed its steel fabricator's shop drawings, thereby delaying the fabrication of structural steel critical to completing the project.
The contractor repeatedly notified the Government that the lack of shop drawings was impacting its ability to meet schedule. The contractor further notified the Government that it was reserving its rights to recover any and all costs associated with the delay once the full impact is known.
The contractor subsequently informed the Government that its steel fabricator was still evaluating the impact of the delay due to the late return of the shop drawings. The contractor also advised its steel fabricator that the fabricator needed to accelerate its performance to avoid impacting the project, and the fabricator in fact did accelerate its performance at increased cost.
The contractor ultimately submitted a pass-through claim to the Government for the steel fabricator's acceleration costs, asserting that the fabricator had been constructively accelerated due to the lack of a timely time extension. In reviewing the denial of that claim, the Board noted the elements of constructive acceleration:
- 1. That the contractor encountered a delay that is excusable under the contract;
- 2. That the contractor made a timely and sufficient request for an extension of the contract schedule;
- 3. That the Government denied the contractor's request for an extension or failed to act on it within a reasonable time;
- 4. That the Government insisted on completion of the contract within a period shorter than the period to which the contractor would be entitled by taking into account the period of excusable delay, after which the contractor notified the Government that it regarded the alleged order to accelerate as a constructive change in the contract; and
- 5. That the contractor was required to expend extra resources to compensate for the lost time and remain on schedule.
The Board found that the contractor never requested a specific modification to the schedule in its various notifications of delay. Rather, the Board found the contractor notified the Government that it had not yet quantified the delay and would only notify the Government later, once it realized the full impact.
The Board noted that constructive acceleration requires that the Government be afforded an opportunity to grant or deny a time extension on account of the delay. Because the Contractor failed to establish that it made a request for an extension of the contract schedule prior to acceleration, the Board found that the contractor could not establish a constructive acceleration claim as a matter of law. Consequently, the Board granted the Government's motion for partial summary judgment.
The lesson learned from this Board decision is that a federal contractor should seek a time extension from the Government in writing for an excusable delay before accelerating its performance to meet the original completion date.
If the Government denies the request or fails to act on the request in a reasonable time, then the contractor should inform the Government in writing that it is incurring acceleration costs to meet the original completion date and that it will seek to recover those costs from the government. Thereafter, the contractor should track the additional costs it incurs as a consequence of the acceleration.