Overview

In today’s dynamic construction landscape, delay management is a fundamental part of a Commercial or Construction Manager’s toolkit. Yet one of the least understood – and often mismanaged – delay types is the “pacing delay”. Pacing delays present both risk and opportunity depending on how they are managed and documented.

This article explores the strategic and contractual implications of pacing delays and highlights the importance of proper notice, understanding concurrent delays, and navigating entitlements within a common law framework – particularly relevant for practitioners operating under Australian contracts.

Key Takeaways

• Be diligent in issuing notices of pacing.
• Understand the distinction between pacing and overlapping delays.
• Be aware of the legal and commercial risks of pacing.
• Know how to demonstrate reasonableness and mitigate adverse outcomes.

What is a Pacing Delay?

A pacing delay occurs when one party – often the Contractor – voluntarily slows down or reschedules its activities in response to a delay on the critical path caused by the Principal or another party. Unlike traditional delays, pacing is a discretionary act, often driven by practical or cost-saving considerations.

However, where poorly managed, pacing may reduce or eliminate entitlement to extensions of time (EOTs) or delay damages – particularly where it results in overlapping delays or contributes to further disruption.

Pacing vs. Delay: Legal Distinction

A critical difference lies in the source of the delay:

• Delays are unintentional and caused by external events (e.g. late design release, latent conditions).
• Pacing is a deliberate strategy to slow non-critical work in anticipation of, or in response to, another delay.

As noted in Gaymark Investments Pty Ltd v Walter Construction Group Ltd [1999] NTSC 143, contractors must be cautious where concurrent delays exist. Even if the principal causes delay, a contractor may lose entitlement to EOTs or damages where its own delays contribute to the critical path.

Risks Associated with Pacing

1. 1. Overlapping Delays: When a contractor paces work during a principal-caused delay, accusations of overlapping delay can occur – especially in circumstances where the contractor’s approach is not clearly communicated to the principal.
   2. Contract uncertainty: Without contractual clarity on pacing (most Australian standard forms such as AS 4000 remain silent), claims can be disputed, especially if no formal notice is given.
   3. Resource Reallocation: While cost savings might drive pacing, this must be weighed against the risk of diminished entitlements and possible acceleration costs later

Best Practice: Issue a Notice of Pacing

Both the Society of Construction Law Delay and Disruption Protocol (SCL, 2017) and AACE International (2011) recommend early and transparent notice of pacing intentions.

“If the Contractor intends to pace non-critical activities, it should notify the Employer and the CA of its intention… along with its reason for doing so.” – SCL Protocol, 2017

This aligns with the mitigation principles outlined in Perini Corporation v Commonwealth of Australia (1969) 12 BLR 82, where a contractor’s entitlement was reduced due to failure to act reasonably to mitigate delay impacts.

Scenario Analysis

Scenario 1: Well-Documented Pacing Results in Full Entitlement

• The Principal delays design for 3 weeks.
• The Contractor issues a notice of pacing after the planned design release window.
• The Contractor slows down pile survey works but completes them before the design is finalised.

Outcome: As per Turner Corporation Ltd v Austotel Pty Ltd (1994) 13 BCL 378, because the Contractor acted reasonably and provided notice, the full EOT claim is likely to be upheld.

Scenario 2: No Notice and Overlapping Delay Leads to Reduced Entitlement

• The Principal delays design for 3 weeks.
• The Contractor independently delays pile survey without notice.
• Survey overlaps with the principal delay period.

Outcome: In line with Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151, the lack of notice and overlapping delays may result in a partial or nil entitlement, as the Contractor failed to meet notice conditions and prove readiness to perform.

Recommendations for Contractors

1. Notify Early and Clearly: Use formal notices to document your intention to pace and reasons for doing so.
2. Reference Accepted Protocols: Where contracts are silent, rely on industry best practice such as the SCL Protocol.
3. Demonstrate Mitigation Efforts: Always show that resource allocation decisions were reasonable and aimed at reducing overall cost or time.
4. Maintain Contemporaneous Records: Clear records help prove that any delay on your part was due to the Principal’s actions – not your own.

For more information about delay claims, pacing strategies, or EOT risk management, contact the Calibrate Consulting team at info@calibrateconsulting.com.au or call +61 9188 7444.

Disclaimer & Copyright

This article is for general information only and does not constitute legal advice. Copyright © 2025 Calibrate Consulting Pty Ltd. All rights reserved.