Can the principal agent issue an instruction to accelerate work under the JBCC Contract
5 minute read – by Kobus le Roux
Can the principal agent accelerate the work under the JBCC Contract?
Acceleration is one of those sticky concepts in the building industry and especially within the JBCC contract. Contractors, employers, and agents habitually find themselves in heated disputes after acceleration deals went askew.
It’s then when they realise, the concept of acceleration is artificial because it doesn’t exist in the JBCC.
In this article, we are going to look at this concept of acceleration and what you need to know, to protect your interests as a contractor or as a principal agent. We also ask the fundamental question: Can the principal agent accelerate the work under the JBCC Contract?
JBCC questions and answers scenario
In a JBCC questions and answers session, one contractor sketched a scenario that should be quite familiar to many professionals in the building industry.
This particular contractor suffered delay and provided a notification and later a claim in terms of the JBCC.
The principal agent responded and refused the extension of time claim (EOT).
After scrutinising the programme, the principal agent has identified opportunities for acceleration. Some required additional resources but the principal agent also pointed out opportunities in the programme to change the sequence of work. The principal agent felt the contractor could implement these sequence changes and acceleration to the benefit of the project.
The principal agent also acknowledged that a portion of the proposed acceleration may require additional expense and cost for which the employer is willing to reimburse the contractor.
The principal agent then issued a formal instruction to the contractor to accelerate work and keep the practical completion date fixed.
So what’s the problem?
The principal agent’s instruction may sound very cordial in this instance. You may even wonder why a contractor would not simply follow this amicable arrangement?
But experienced contractors would know we are stepping into a contractual minefield
The contractual minefield that is acceleration
- Firstly, it’s not always possible nor practical to speed up work. As an example, extra resources aren’t always available. The contractor’s own resources may be tied up in other projects. Also, the nature of the work may be such that more resources isn’t going to speed it up. More resources need more control and supervision. With too many resources, everyone’s job sometimes become nobody’s job. Also, to use external parties becomes a quality risk.
- What happens if the contractor fails to accelerate? Or if the sequence changes, turn out to have failed and the project is still delayed? This is the question everyone always side-steps. Yet this is where the proverbial wheels come off, followed by the gloves.
- If the contractor fails to accelerate, are they still entitled to claim an EOT or have they now lost that right due to their acceptance of the instruction for acceleration?
- What if the contractor did speed up, but there were other delays beyond their reasonable control which prevented completion on time? Do they still retain the right to claim an EOT on these delays?
- Should the contractor pay back the acceleration money if they failed to accelerate?
- If they fail to accelerate could the employer use others to complete the work as is their entitlement under clause 17?
As you can see, once we step beyond the intended bounds of the JBCC, we are in trouble. Or as my Namibian clients would always say: “we have hit some thick sand”.
There is no contractual definition for acceleration found in JBCC. The word doesn’t even exist in the contract. As a result, the parties are lost in a vast expanse of subjective opinions and common law pitfalls.
It thus begs the question:
Can the principal agent accelerate the work under the JBCC Contract? Can the principal agent issue an instruction to accelerate or change the sequence of the programme to recoup delays?
The fact is, a principal agent (PA) does not enjoy unlimited powers to issue contract instructions.
There is a definite limitation on the powers of a PA to issue contract instructions and this limitation is imposed by the JBCC agreement and common law.
From these restrictions it follows then that the PA is not entitled to issue certain instructions such as:
- an instruction to suspend work,
- instructions to accelerate work,
- nor are they entitled to instruct a contractor about the order in which they are to carry out work.
The contractual limits are clearly set out under sub-clause 17.1 of the JBCC agreement.
From a practical standpoint as mentioned earlier, acceleration is sometimes impossible. So, acceleration cannot be a contractual provision at the PA’s disposal on which a binding instruction can be given.
The PA simply cannot issue an instruction to force the contractor to carry out work in a particular order. Even if there are opportunities in the programme for fast-tracking or changing sequences in a bid to accelerate.
If the employer wishes for work to be carried out in a preferred sequence, it can only be enforced contractually at tender stage.
This could then form part of the terms of conditions early on. Also, the contractor would be under an obligation to adhere to it as they could have considered its workability, risk and cost as part of their tender.
If no such provisions existed at tender stage, then under the essence of common law, contractors are entitled to programme and execute the work in the way they think best and to arrange it in a manner and order which they prefer and for which they have priced.
Another very important point to remember is that contractors cannot lose their right or entitlement to claim for an EOT only because acceleration options exist and are considered . This would require a firm amendment of the standard provisions of the JBCC to enforce.
What can parties do to protect their interests under these circumstances?
Contractors should reject an acceleration instruction formally in writing. But, do make sure there are no amendments to your agreement where such an instruction is allowed.
If no such provision exists, contractors must inform the principal agent that it is not a valid instruction in terms of the JBCC. Also, they should make clear they have no obligation or intention to proceed with it. If the principal agent disagrees, the parties can refer the matter to dispute resolution.
Parties can still negotiate and agree on a form of acceleration. Many contractors prefer to quote on acceleration, and it can provide a win-win opportunity for both parties if handled correctly.
But it is strongly advised to get legal help in drafting an amendment to this effect.
The amendment needs to protect everyone’s interests and clearly stipulate the rules, terms and conditions that would apply going forward with the acceleration in order to avoid the minefield list we detailed earlier in this article.
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This post was compiled by Kobus le Roux for Le Roux Consulting, all rights reserved. Please contact us for your professional outsourced project scheduling, claims or adjudication assistance services or construction training courses in the heavy civil and building industry.
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