Trends in Construction Lost Productivity Claims

Gerald P. Klanaca and Eric L. Nelsonb

Abstract: Resources are the cornerstone of all construction performance. An important measure of those resources is their productivity,
which can be affected by many factors. Where productivity is reduced due to circumstances beyond the contractor’s control, a claim for
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loss of productivity often results. Although similar to other types of claims, loss of productivity claims pose unique challenges for the
contractor who asserts them and the owner who defends against them. This paper discusses construction productivity, especially labor
productivity, including its measurement, the methodologies for asserting and defending against loss of productivity claims, and recent
judicial decisions addressing these claims.
DOI: 10.1061/共ASCE兲1052-3928共2004兲130:3共226兲
CE Database subject headings: Claims; Construction costs; Productivity; Contractors; Construction industry.

Introduction Project Characteristics

Productivity is commonly defined as the quantity of work pro- Many estimating methods recognize that construction labor pro-
duced or work output 共e.g., lineal feet of pipe兲 per unit of input or ductivity is influenced by project characteristics, such as the
effort 共e.g., dollars or man-hours兲. Productivity measurement is project’s size, its complexity, the schedule, the extent of revamp
typically expressed as a ratio or factor, as a percentage, or as a or retrofit, the construction contract, the availability of labor, the
production rate. Some productivity measurement schemes use location, and competing projects. Many of these characteristics
‘‘efficiency,’’ which is the ratio of the effective or useful output to are evident at the time of bidding and are reflected in project
the total input in a project. Other measurement schemes may use estimates and contractor bids. Consequently, accuracy at time of
a ‘‘production rate,’’ such as the amount of work that may be bidding and the use of current data are essential. These character-
accomplished in a given amount of time 共e.g., 200 cu yd of con- istics can change during performance however, such as where the
crete placed per day兲. owner adds, deletes, or accelerates work.
A loss of productivity claim, also known as a loss of efficiency
claim or an inefficiency claim, arises when productivity is im-
pacted by events for which the contractor is not responsible and is
Site Conditions
entitled to additional compensation. Loss productivity claims are Site conditions can also influence labor productivity. These influ-
one of many types of claims asserted on construction projects.1 ences include access to the site, its distance from the labor pool
Contractors assert claims for loss of productivity when the antici- 共usually a major town or city兲, other work in congested areas
pated means, methods, techniques, scheduling, or work sequence 共also known as density兲, crowding of labor or stacking of trades,
are altered by events or circumstances outside the contractor’s work among hazardous materials or processes 共which may neces-
control, and the contractor is entitled to relief for the loss. sitate work interruptions or the use of appropriate protective
clothing兲, use of site work permits 共to safely perform ‘‘hot work’’
Influences of Construction Labor Productivity or work in a confined space兲, the strictness of the owner’s site
safety requirements, and other safety/legal restrictions. Some of
One of the challenges of assessing productivity for estimating or these influences are fixed and known at the onset of the construc-
claim analysis is to identify which of the myriad of factors that tion contract, but others may arise during the course of the work.
influence project performance actually caused the variance in
construction productivity. These factors can include project char-
acteristics, site conditions, project execution, weather effects, su- Project Execution
pervision effects, management of time, local labor market condi- Project execution by the performing parties may also influence
tions, and availability of tools and construction equipment. labor productivity. Typical of such influences are the amount and
timing of project changes, the quality of materials delivered, the
a
Senior Principal, PMA Consultants LLC, Ann Arbor, MI 48104. quality of engineering deliverables 共perhaps related to errors and
b
Partner, Construction Law Group, Smith, Currie & Hancock LLP, omissions in contract documents兲, the timing and availability of
Atlanta, GA 30303. engineering deliverables, timing and availability of materials, re-
Note. Discussion open until December 1, 2004. Separate discussions view time for requests for information 共RFI兲, review time for
must be submitted for individual papers. To extend the closing date by
approval of shop drawings or samples, failure to coordinate trade
one month, a written request must be filed with the ASCE Managing
Editor. The manuscript for this paper was submitted for review and pos- contractors/subcontractors, and failure to control vendors and
sible publication on June 20, 2003; approved on February 24, 2004. This vendor deliverables such as shop drawings and fabricated materi-
paper is part of the Journal of Professional Issues in Engineering Edu- als.
cation and Practice, Vol. 130, No. 3, July 1, 2004. ©ASCE, ISSN 1052- On most projects, the owner has the authority to accept or
3928/2004/3-226 –236/$18.00. reject changes and the responsibility to control changes; but, that

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J. Prof. Issues Eng. Educ. Pract. 2004.130:226-236.

 responsibility varies with the contract type and project delivery events兲, and abuse of drugs and alcohol. Usually, labor market
approach. With a design-bid-build delivery system, the responsi- conditions are known at the time of bidding, and the management
bility for quality and availability of engineering deliverables is of these conditions is the responsibility of the contractor. If sig-
usually with the owner and engineer. With a design/build 共or turn- nificant changes in local labor market conditions occur, the con-
key or E/P/C兲 delivery system, the design/build contractor has tractor may be forced to hire more marginal workers, which tends
that responsibility. Timely reviews of RFIs and shop drawings are to reduce productivity. Productivity can also be influenced by
typically the responsibility of the owner/engineer. Nonetheless, worker’s pay, and the contractor may have the option to attract
the owner/engineer and contractor should plan work so that the higher skilled workers if wage rates and benefits are more attrac-
owner and its design team are not overwhelmed with a surge of tive than other local options. The contractor must usually assume
shop drawings and samples that must be approved within a short the risks associated with these.
period. The time provided for these functions may be contractu-
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ally allocated.
Construction Equipment and Tools
Tools and construction equipment may affect labor productivity.
Weather
If the right tools and equipment are not available, productivity is
Weather conditions frequently have an overriding impact on labor likely to suffer. The contractor is normally responsible for the
productivity. Some projects have limited performance windows availability and management of tools and equipment.
because of the severity of seasonal weather 共such as work on the
Alaska North Slope兲. Typical weather-related productivity influ-
ences include extreme heat, extreme cold, inclement weather Productivity Measurement and Performance
共rain, wind, snow, ice兲, and availability of weather protection. Evaluation „Productivity Trend Analysis…
Depending on the contract terms and the circumstances, unusual
weather may be a force majeure that justifies an increase to the Construction labor productivity is a key indicator of overall
contract time but rarely an increase in the contract price. A typical project performance. Best project control practice is to collect and
exception is where owner changes or performance failures push analyze productivity data continuously during the course of the
work into periods of more hostile weather or extreme conditions, project. These same data can later be used to assert or refute
and efficiency suffers as a result. contentions about the amount and causes of loss of productivity.

Background of Productivity as a Transient Variable

Supervision
Construction labor productivity data, whether cumulative or per
The quality and experience of supervision also affects labor pro- period, have a transient nature. Data will generally vary over time
ductivity. Typical supervision productivity influences are the ratio or period of progress evaluation. Productivity data are transient
of supervisors to first-line supervision 共foremen兲, to workers 共also because most significant construction activities have at least three
known as dilution of supervision兲, quality of first-line supervision subphases of performance: learning, production, and closing.
共foremen兲, quality of supervision staff, and the experience of su- The learning subphase, during the first 10 to 20% of an activ-
pervisors with the labor pool. The contractor is usually respon- ity, reflects the learning curve and ramp-up effects. The produc-
sible for effective supervision of the construction labor work- tion subphase is usually the period of highest output, and its range
force, except for circumstances where compensable relief is can vary. It can be as great as 10 to 90% of physical progress or
warranted, such as constructive acceleration where owner direc- as little as 20 to 80% of physical progress, depending on the
tions create dilution of supervision. extent of learning or closing complexity and labor turnover. The
closing subphase, which occurs during the last 10 to 20% of
Time Management physical progress of an activity, reflects the usual slowdown in
production as work areas become complete and resources ramp
How the project team manages time can influence productivity. down. On a poorly managed project, it may include excessive
Aspects of time management include amount of overtime, mul- corrective work, contributing to poor productivity and cost over-
tiple shifts, quality of planning and CPM schedule information, runs.
and sequencing of work. Many studies have measured the effect
of extended overtime on labor productivity.2 In general, as the
workweek lengthens, productivity decreases due to worker fa- Key Information to Measure Productivity
tigue and other effects. The contractor is normally responsible for The ‘‘Manual of Construction Productivity Measurement and Per-
managing time on a construction contract. Owner changes or ac- formance Evaluation,’’ a May 1988 report to the Construction
celeration, whether approved, directed, or constructive, may make Industry Institute,3 provides guidance in measuring construction
the owner liable for loss of productivity when extended overtime productivity for evaluating performance. As discussed in greater
becomes necessary or where work must be performed out of se- detail below, that manual identified key information to measure
quence. construction labor productivity, such as control accounts, earned
value analysis, progress measurement system 共‘‘rules of credit’’兲,
reporting of quantities and workhours, and performance evalua-
Labor Market Conditions
tion.
Labor market conditions that may affect productivity include the To properly measure labor productivity, the performance
volume of work in the labor market 共also known as activity兲, size evaluator, usually the contractor but sometimes the owner, must
and base skills of the local labor pool, union versus non-union first establish control accounts to group related accounts or activi-
labor rules, local economy 共wages and incentives兲, craft turnover ties where each account has a unique degree of difficulty or level
and absenteeism, cultural issues 共such as holidays and religious of effort required. These accounts may be divided by discipline

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 共such as aboveground piping兲 or divided further for greater con- value than a curve with just two or three projects. In addition to
trol needs 共such as small-bore versus large-bore piping or carbon- having enough data to have a robust calibration curve, the data
steel piping versus alloy piping兲. Consistent with these control used in developing the curve must be aligned with the productiv-
accounts, the performance evaluator must acquire related ity data being collected. Usually this is done by creating a specific
workhours and quantities. calibration curve for each control account that reflects productiv-
Next, the performance evaluator must set up an earned value ity performance nuances due to different trades or different types
analysis, which assesses the progress 共percentage complete兲 of a of construction work. For instance, a calibration curve derived
control account. The earned value analysis is a weighted average from previous projects erecting large-bore pipe in a piperack
calculation. The weight assigned to each individual account in the should only be used for similar type work by piping crews in
control account is based on the initial work-hour estimate for the piperacks and not for crews installing small-bore piping among
account compared to the sum of the initial estimated work hours pieces of process equipment, unless the data for that activity
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for all accounts in the control account. The earned value analysis yields a similar calibration curve profile.
system must be flexible and accurate to allow for the dynamic Once developed, the calibration curve can be used to compare
effects of rework and changes, which increases the base amount planned versus actual cumulative productivity performance. Cali-
of work to be performed. If it fails to reflect actual required work, bration curves can provide early warning of problems, even be-
the analysis will be flawed. The earned value analysis can be set fore the work gets to the production subphase. Calibration curves
up in a series of spreadsheets or in a database, depending on the provide a mechanism to forecast productivity trends and can be
volume of data. used to quantify the monetary extent of loss of efficiency/
As part of the earned value analysis, the performance evaluator productivity. An example of a calibration curve is presented in
establishes ‘‘rules of credit,’’ which are used to establish partial Fig. 1, which tracks cumulative productivity using a work hours
credit for individual work steps within an account. Rules of credit per percent complete statistic. In this example, the budget for the
specify the individual steps 共such as erect steel, bolt-up, plumb- work is 114,000 work hours; thus the budget line is set at 1,140
ing, and torque bolts for installation of bolted steel structures兲 as work hours per percent complete, as this is the budget divided by
well as the partial credit to earn 共such as 50% to erect steel, 25% 100% complete. Expected cumulative productivity is shown by
to bolt-up, 15% to plumb, and 10% to torque兲. The sum of rules the calibration curve, which shows how the cumulative perfor-
of credit for a control account equals 100%. Rules of credit are mance would differ during the execution of the work. By defini-
usually determined through analysis of the historical level of ef- tion, the calibration curve should equal the budget level at 100%
fort to complete an account. If done properly, rules of credit avoid complete. The trend of actual cumulative productivity perfor-
over-reporting or under-reporting of progress. mance is calculated as actual work hours divided by physical
Once work starts on a project, the performance evaluator col- progress percent complete, under the presumption that the
lects and reports actual quantity and work-hour information. progress measurement system is based on actual quantities of
Quantity reporting provides periodic reporting of actual quantities work performed.
installed for a control account. Examples of quantities to report Although these measurement and evaluation tools are by no
include volume 共cubic yards or cubic meters兲 of concrete placed, means exhaustive, they demonstrate the availability of methods
length 共or weight兲 of piping installed, weight 共tons兲 of steel for tracking productivity. These are important when attempting to
erected, length of cable pulled, etc. Actual work-hour reporting recover loss of productivity costs or defend against claims for
provides actual work hours expended by each control account. To these costs.
accurately assess productivity performance, the reporting of
earned value data and actual quantities and work hours should be
through the same date. Legal Trends in Recovery of Lost Productivity
Finally, the performance evaluator compares actual progress Claims
共from the earned value analysis兲 and productivity to the control The major challenge when presenting a lost productivity claim is
budget. This includes a comparison of the quantity installation to prove the cause and the cost of the lost productivity so that the
rates and work hour consumption rates. The evaluation is per- proper party bears responsibility. Because poor productivity can
formed by control accounts 共such as formwork, reinforcing-steel result from multiple events and project participants, isolating the
placement, concrete placement, structural-steel installation, large- productivity lost due to each event can be difficult if not impos-
bore piping, small-bore piping, masonry, mechanical rough-in, sible.
mechanical finishes, electrical rough-in, and electrical finishes, If United States laws govern the construction project, then
etc.兲. Commonly, this evaluation is performed weekly for most project participants will benefit from an ever-deepening body of
construction projects. The performance evaluation should look at law on proving and pricing lost productivity claims. If the project
incremental as well as cumulative trends to provide ‘‘early warn- is outside the United States, then the contractor and owner must
ing’’ of inadequate performance, especially when data are com- typically rely more on contract documents and industry practices,
pared to calibration curves. because few other countries have such an established body of law
on this issue. In many civil law, code-based countries, the parties
Calibration Curves must rely on broad, overriding legal principles that allocate the
risk of damages if one party is in substantial breach of its con-
To complement the measurement of productivity, an expected tractual obligations. These legal principles can frequently be
construction labor productivity ‘‘calibration curve’’ is developed vague. Often, however, methods used for pricing and proving lost
from historical performance of similar work. The development of productivity claims under U.S. law are accepted in the interna-
a calibration curve is a statistical exercise and requires enough tional community as persuasive authority.
actual work hours and progress data from several projects to Recently, U.S. courts, and especially federal boards of contract
make the analysis robust. A calibration curve based on project appeals, have given guidance into the proof required to recover
data from 10 similar projects is likely to provide more predictive construction inefficiency costs.4 This is important for those that

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Fig. 1. Example of calibration curve to trend productivity performance

find themselves arguing their inefficiency claims before these Lost Productivity Recovery
boards, as well as those who are prosecuting, defending against,
and negotiating these claims on construction projects domesti- If productivity drops, the contractor is faced with two basic ques-
cally and abroad. tions. First, what is the cost of the drop in productivity? Second,
Although productivity is often an item identified with the gen- what or who is responsible for which portion of the additional
eral contractor, with the growing use of Engineer, Procure, and costs? These questions are not always easily answered. Tracking
Construct 共EPC兲 and Engineer and Construct 共EC兲 contracts, tra- costs for productivity can be difficult; linking the added costs of
ditional design and engineering firms must likewise understand lost productivity with specific events poses even greater chal-
and be able to address productivity of in-house engineering and lenges. Despite this, contractors and project owners must respond
field activities. For example, on an EPC industrial process project, to these questions so that lost productivity costs can be borne by
lost productivity in construction activities may result from the responsible party.
changes in the basic design that occurred late in the project. In
such cases, the EPC contractor must meet the same standard that Judicial Decisions on Lost Productivity Claims in the
applies to a general contractor, by showing that the design docu- United States
ments changed, which in turn impacted the cost of the work. In
addition, the EPC contractor will need to show that the change As one board of contract appeals put it, inefficiency costs are
was beyond the minimum performance or design criteria con- typically increased labor costs that ‘‘stem from the disruption to
tained in the bid documents consequently impacting its area of labor productivity resulting from a change in working conditions.
responsibility and its cost of performance. This extra step may Productivity is inversely proportional to the man-hours necessary
require significant additional documentation and analysis. Many to produce a given unit of product... if productivity declines the
design/engineering-oriented firms are not, historically, set up to number of man-hours of labor to produce a given task will in-
track labor and equipment costs in construction because this is crease.’’ 6
often not within their traditional areas of work. The failure to When the contractor is contractually responsible for the dis-
adequately track labor, material, and equipment costs on large ruption, it must bear the resulting losses. But, when the owner
EPC projects can have devastating financial consequences for the causes a disruption, the contractor is not automatically entitled to
EPC contractor. Consequently, engineering and design firms in- additional compensation. To recover additional compensation for
volved in these types of projects must be prepared to address lost project inefficiencies, the contractor must prove 共1兲 liability, i.e.,
productivity, especially if they are the lead member of the con- the owner was contractually responsible for the impact; 共2兲 cau-
tractor team. Likewise, traditional construction firms must be pre- sation, i.e., the impact caused the labor overruns; and 共3兲 resultant
pared to track additional engineering time and procurement costs. cost increase, i.e., the impact actually caused a compensable loss.
7
Several excellent publications address legal principles con-
cerning lost productivity; therefore, a comprehensive discussion Although state and federal courts have addressed construction
here is unnecessary.5 Instead, this section focuses on recent productivity claims, the most recent and detailed judicial com-
United States court and board decisions addressing lost produc- mentaries on this subject have come from the various federal
tivity claims, with the goal of identifying the best means for con- boards of contract appeals. Board decisions are not binding on
tractors to identify, track, price, and recover costs for lost produc- state and federal courts, or even other boards, but they give some
tivity. insight into judicial trends, and state and federal courts will often

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 look to board decisions for guidance in formulating their deci- unreasonable and whether or not the changes arose from govern-
sions. ment problems, such as defective specifications. The contractor
In the simplest terms, to recover for lost productivity, the con- must show a causal link between the changes and the labor over-
tractor must prove that a particular work activity was impaired by runs by proving that the undifferentiated group of changes affect-
an action taken by the owner or for which the owner bears con- ing the changed and unchanged work resulted in the loss of pro-
tractual responsibility. Typically, this means showing the normal ductivity on that work. The board explained that one way to meet
or expected level of performance for the type of work at issue and this burden is by showing that there is no reason for the ineffi-
the extent to which the owner’s action impacted that performance. ciency other than that for which the government is responsible.
8
The challenge for contractors is twofold: 共1兲 proving causation The board declined to follow prior judicial decisions granting
共i.e., that the owner’s actions actually caused the inefficiency recovery for labor inefficiency. It rejected those decisions because
claimed兲; and 共2兲 proving the cost of the lost productivity was it determined that they merely paid ‘‘lip service’’ to the need to
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attributable to the owner’s actions. Additionally, the contractor prove causation, and they were based more on subjective conclu-
must recognize that most owners regard lost productivity as ‘‘soft sions than ‘‘hard, objective’’ evidence. In rejecting the contrac-
costs,’’ lacking the same persuasiveness as direct cost. To over- tor’s claim in Centex Bateson, the Board held that the contractor
come this perception, documentation demonstrating the cost is failed to show that the totality of changes and other events for
often required. which the government was responsible actually caused the disrup-
As noted, lost productivity costs are not limited to labor inef-
tion in labor productivity.
ficiencies. It can also result from equipment inefficiencies and
One of the problems with the contractor’s case was that it
even material inefficiencies, although the latter is uncommon.
rested primarily on the testimony of one witness, whose opinion
Consequently, where the contractor demonstrates that its use of
was based on ‘‘subjective recollections, calculated to justify a
equipment was impacted by owner-caused disruptions, the con-
result that was apparently presumed’’ and on limited record docu-
tractor may be able to recover the resulting inefficiency costs.9
ments prepared for the appeal. The board found that this was not
Recovery for equipment inefficiency is subject to the same stan-
dards of proof as recovery for labor inefficiency. enough to carry the contractor’s burden of proof. Instead, the
contractor should have maintained and based its claim on ‘‘con-
temporaneous, detailed, objective logs and other records relating
Lost Productivity Entitlement to the performance of the contract and impact of the events on
labor productivity.’’ 12 Because the contractor failed to present
Proving causation has been a prevailing theme in board decisions this type of evidence showing the causal link between the impact
over the past 2 years. Recently, the Veterans Administration events and the lost productivity, the board denied the claim. Al-
Board gave detailed opinions on the subject with respect to lost
though proving an inefficiency claim based on cumulative impact
productivity arising from the cumulative impact of multiple
may be more difficult than proving inefficiencies from other,
changes.10 Cumulative impact is the unforeseeable disruption of
more discrete conditions, the board’s decision in Centex Bateson
productivity resulting from the overall 共or ‘‘synergistic’’兲 effect of
is instructive for those making inefficiency claims because it de-
groups of change orders. Local 共or direct impact兲 on the other
lineates the proof standards to which the contractor may be
hand refers to the direct impact that changed work has on the
held.13
unchanged work going on around it.
In 2000, the Veterans Administration Board again provided a
In Centex Bateson, the board addressed the cumulative impact
detailed analysis for evaluating inefficiency claims in Clark Con-
of approximately 1,500 events, including change orders and RFIs,
taking place during the course of a hospital construction project. struction Group, Inc.14 There, the general contractor sponsored a
The contractor requested an equitable adjustment for direct labor claim on behalf of its mechanical subcontractor for lost produc-
costs, impact on changed work, impact on unchanged work, im- tivity on a large, multiyear hospital project. The subcontractor
pact to stopped work and then restarted, and home office impact contended that three circumstances, for which the Government
arising from the change order work and RFIs. was responsible, affected its labor productivity. First, the subcon-
The board rejected most of the claims once it held that most of tractor contended that it was forced to change its work sequence
the costs associated with these categories were subject to an ac- due to a government order that stopped part of work on the
cord and satisfaction 共i.e., settlement兲 because the contractor project, which in turn resulted in less productive labor and caused
signed modifications for the work that gave rise to those costs. the subcontractor additional expenditures in preparing coordina-
The board then turned its attention to the inefficiency claims that tion drawings. Second, the subcontractor claimed that the site was
survived. excessively wet both inside and outside the building due to two
The board recognized that, when proving cumulative impact, reasons: the stop work order, which stopped underground water
the contractor is subject to the ‘‘fundamental triad of proof’’ nec- pumping; and an improper proprietary roof specification that the
essary to recover lost productivity costs: liability; causation; and general contractor had a difficult time meeting. Finally, the sub-
resultant injury. The board found that the contractor satisfied the contractor claimed that the government continuously failed to re-
first element because it showed that the government was liable for spond timely to RFIs, which in turn impacted efforts to complete
the multiple changes. To satisfy the second element, a contractor coordination drawings and mechanical installation work.
must demonstrate that the ‘‘government exceeded the permissible Citing Centex, the board applied the fundamental ‘‘triad’’ of
limits of its discretion under the changes clause and ordered proof, liability, causation, and resulting injury, to determine each
changes that materially alter the nature of the bargain agreed aspect of the subcontractor’s claim. The board first noted that the
upon.’’ 11 In other words, the government must direct changes that testimony of the subcontractor’s project managers and experts
damaged the nature of the project as foreseen by the parties. The was ‘‘forthright.’’ Nonetheless, it stated that to prove a labor in-
board noted that the contractor could not recover for the cumula- efficiency claim the claimant must present contemporaneous
tive impact of changes by merely showing the existence of project records demonstrating the impact and its effect on the
numerous changes, whether or not the number of changes was claimant’s work.15 The board found that the subcontractor met

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 this burden on some occasions but failed to meet it on others. The The key for the contractor is to establish a system whereby
board’s analysis of certain subcontractor claims is helpful in productivity losses and impact events are identified and docu-
evaluating the requirements in presenting an inefficiency claim.16 mented at the time they occur. For example, if out-of-sequence
With respect to the out-of-sequence work experienced by the mechanical work must be performed in order to accommodate the
subcontractor, the Board found that the subcontractor’s only rea- delayed arrival of owner-controlled equipment, then the contrac-
sonable response to the stop-work order was to re-sequence its tor will be well served to isolate the impacted work from the
activities. The subcontractor’s evidence showed that the new se- unimpacted work. This is done by documenting 共1兲 increases or
quence of work resulted in more difficult material handling, crew decreases in the number of workers being used to perform the
supervision, and work area access problems. This hurt labor pro- impacted work; 共2兲 additional expenditures for the impacted work
ductivity, which entitled the subcontractor to compensation. The 共e.g., discretely identifying the impacted work through use of spe-
Board concluded, however, that the resequencing did not cause all cific cost accounting codes兲; 共3兲 work stoppages or slow downs;
共4兲 the amount of material being installed each day 共e.g., amount
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of the subcontractor’s inefficiencies. For instance, it found that

the general contractor was responsible for some of them. In addi- of piping runs installed兲; 共5兲 adjustments in the schedule due to
tion, it found that the subcontractor failed to prove that the rese- the impacts; and 共6兲 the amount of delay, usually through the use
quencing of work was the sole cause of the labor overruns rather of the critical-path method 共CPM兲 schedule.20
than the subcontractor’s own failure to adjust parts of its work to Likewise, contract requirements concerning notice of claims
and submission of claims must be followed. This may mean that
accommodate the stop-work order.
the owner must be notified of the lost productivity within a very
With respect to the subcontractor’s lost productivity claim aris-
short period. The contractor should also be aware of the contract
ing from the untimely responses to RFIs, the board based its
provisions under which it is asserting its claim. For example, lost
analysis on two questions: 共1兲 was the Government late in re-
productivity claims may be made under the ‘‘changes clause’’ or
sponding to the RFIs; and 共2兲 did the late response cause a change
‘‘differing site conditions clause’’ in the contract as well as under
in the subcontractor’s working conditions that impacted the sub-
theories of breach of contract or breach of warranty.
contractor’s labor productivity? As to the first question, the board Some owners have attempted to limit or altogether exclude
found that because the contract did not set a time for the govern- lost productivity claims through restrictive provisions in the con-
ment to reply to RFIs, the government merely had a duty to re- tract documents. In that case, the contractor will need to evaluate
spond in a reasonable time. The Board then held that the subcon- the contract terms to make sure it is not submitting a claim that
tractor failed to show that this response time was unreasonable, may be barred based on the contract provisions.
although it sometime exceeded 200 days.
The board also found that the subcontractor did not prove that
Calculating Lost Productivity Costs
the late RFIs caused a labor disruption. The subcontractor pre-
sented expert testimony concerning several disruptions due to late Once liability is established, the contractor must then demonstrate
RFIs. The board rejected this testimony because it was not sup- the costs associated with the lost productivity. Productivity claims
ported by contemporaneous documents. The board noted that it can be difficult to prove from a cost standpoint.21 As noted by one
would expect to see ‘‘daily logs, CPM fragnets, correspondence’’ board, ‘‘it is rare when the loss of productivity can be proven by
and other contract documentation to support the contention that books and records,’’ and the contractor must often resort to expert
the late RFIs changed the expected working conditions and that testimony and other forms of calculating the inefficiency.22
the change to working conditions disrupted the subcontractors Project documents are critical in demonstrating costs as well
labor and the extent of those disruptions.17 Even though the board as causation. When proving lost productivity, the contractor may
concluded that the late RFI responses did not disrupt installation need to evaluate its original estimate and supporting worksheets,
labor, it found that the late responses did disrupt and delay the daily reports showing on-site labor forces and equipment, job cost
preparation of coordination drawing for which the government reports, material quantity sheets, time logs or sheets showing
was partially liable.18 labor hours expended per day, and weekly progress reports, etc.
Even when the boards have allowed the contractor to recover This documentation is not always available, and it must be re-
for lost productivity, the contractor has been held to a high stan- membered that without these data, rarely will the contractor be
dard. In Lamb Eng. & Constr. Co., the Engineering Board of able to absolutely quantify lost inefficiency costs caused by the
Contract Appeals granted a contractors request to recover ineffi- owner.
ciency costs associated with additional site work arising from a Lost productivity costs can be demonstrated in a variety of
differing site condition.19 The contractor’s expert’s opinion was ways: 共1兲 the total cost/modified total cost approach;23 共2兲 mea-
scrutinized thoroughly, and the board assured itself that the ex- sured mile 共or differential studies兲; 共3兲 industry studies; and 共4兲
pert’s opinion was reasonably based before entitlement was deter- jury verdict. As will be discussed, not all of these methods are
equally acceptable.
mined. The board concluded that its reliance on the expert opin-
ion was based in large part on the fact that the record as a whole
established that the differing site condition did in fact impact Total Cost ÕModified Total Cost
work on the project. Video records as well as other documents The total cost and modified total cost approaches are two methods
used by the contractor were critical in establishing the cause and of proving damages. For the total cost calculation, the contractor
effect relationship between the differing site condition and the merely subtracts its estimate for the work at issue from the actual
lost productivity, only with this type of corroborating evidence cost of the work. The contractor then uses the resulting overrun as
was the board comfortable in granting the claim. This decision the basis for its claim. In the modified total cost approach, the
demonstrates the detailed analysis by a board or court as to each contractor will adjust the overrun to account for inefficiencies for
aspect of the contractor’s inefficiency claim and provides insight which the owner is not responsible. These methods have signifi-
as to the evidence that may be required of claimants making cant shortcomings because they may not accurately reflect the lost
inefficiency claims. productivity caused by the owner.

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 Before the courts or board will allow the contractor to use but it is generally accepted that labor inefficiency costs are not
these methods, the contractor must usually prove that 共1兲 the ac- susceptible to ‘‘absolute exactness.’’ 29 Consequently, the board
tual inefficiency costs cannot be estimated reasonably by more concluded that a comparison between kinds of work that are rea-
reliable means; 共2兲 the estimate of the disrupted work is substan- sonably alike is acceptable. As such, the board provided a signifi-
tiated by the bid documents, and the bid is reasonable; 共3兲 the cant recovery to the contractor, including a mark-up for field
actual costs are reasonable; and 共4兲 the owner was responsible for overhead and general and administrative expenses.
the inefficiencies.24 In short, these methods should be a last resort It is noteworthy that in an effort to minimize any differences
for the contractor when presenting its claim. These methods, how- between the impacted and unimpacted work, the contractor’s ex-
ever, may be useful for purposes of validating other inefficiency pert attempted to adjust the contractor’s productivity rate during
calculation methods. the unimpacted period to better reflect how the work should have
proceeded. The board, however, was not convinced that the ad-
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justment was appropriate and instead found that any differences

Jury Verdict
between the two periods would not prevent their comparison for
The jury verdict method affords courts or boards the discretion to purposes of determining the contractor’s lost productivity.
award damages when those damages have not otherwise been In Lamb Eng. & Constr. Co. the Engineering Board of Con-
shown with specificity. The jury verdict approach is not one that tract Appeals also allowed an expert’s use of the measured mile in
the contractor should use when making its claim. Rather, it is order to calculate the contractor’s inefficiency claim for its site
merely a tool available to the courts to utilize the evidence pre- work on a project.30 The board noted that the probative value of
sented in order to award costs to the contractor when liability and the measured mile ‘‘depends upon the comparability of the cir-
causation are clear and other methods of calculating the lost pro- cumstances surrounding the sample to the circumstances which
ductivity are not available.25 would have prevailed for the work which could not be directly
measured. Its use is limited to circumstances where... proof of
actual costs of the work as contracted is not feasible.’’ 31
Measured Mile (Differential Studies)
The contractor’s expert attempted to reconstruct the work as it
A common method for proving costs for lost productivity is the ‘‘would/should have’’ been performed ‘‘but for’’ the impact
‘‘measured mile.’’ The measured mile takes a designated period events. The work as it ‘‘would/should have been’’ performed was
on a project where a particular activity is unimpacted and com- then used as a benchmark mile and compared to the work during
pares it with the period where that activity is impacted.26 In some the impacted period. The expert then attempted to establish a
instances, the unimpacted 共or representative兲 period may also be ‘‘would/should have cost’’ for the impacted work. In this case, the
taken from a project different than the one that is at issue, where contractor’s expert was able to utilize project records to demon-
the activities and other relevant conditions are relatively similar. strate how a piece of site work equipment was used during a
The use of the measured mile is exemplified in the recent 6-day period of unimpaired work. The expert then adjusted the
General Services Administration Board decision, Clarke Concrete data in the records to reflect more accurately work conditions on
Contractors, Inc. v General Services Admin.27 In Clarke Con- site. These data were then compared to the data obtained from
crete, the contractor agreed to construct a multistory concrete records that reflected work during the impacted period. The board
building for the Federal Bureau of Investigation. During construc- accepted the experts approach as reasonable, but recognized that
tion, the government elected to implement significant design in using the measured mile, the expert must establish the basis for
changes to make the building capable of withstanding a bomb its conclusions, including demonstrating the comparability be-
blast. Because the changes occurred after construction began, the tween the unimpacted work that was measured and the impacted
impact from the changes was significant. Specifically, the changes work. In P.W. Construction, Inc. v United States, the Court of
resulted in resequencing work, rescheduling work crews, site con- Appeals for the Federal Circuit, however, reached a different con-
gestion, overtime, and delays. The impact from the changes was clusion, noting that the expert’s use of the measured mile was not
then compounded by the government’s failure to respond timely appropriate because the type of work conditions were not equiva-
to contractor questions relating to the changed work. Despite the lent for the pre- and postdisruption periods.32
government’s attempt to shift blame for the inefficiencies to the Again, this does not necessarily mean that the unimpacted
contractor, the board easily found that the government was re- work 共i.e., measured mile兲 must be the exact type of work as the
sponsible for the inefficiencies and for the resulting inefficiency impacted work. Rather, the unimpacted work must be similar
arising from the changes.28 The board then focused on calculating enough to the impacted work to serve as a reliable benchmark to
these costs. measure against the impacted work.33 In P.J. Dick, for example,
The board adopted the contractor’s use of the measured mile the Veterans Administration Board allowed for a contractor to use
as the appropriate method for determining the costs to which the the productivity achieved on the installation of electrical feeder
contractor was entitled. There, the measured mile analysis permit- circuits 共the installation of which was unimpacted兲 to determine
ted a comparison of the labor costs of performing work during the productivity loss for the installation of electrical branch cir-
different periods of time. The contractor’s expert was able to iso- cuits 共which was impacted by acceleration and design deficien-
late a period of work prior to the design changes, and compare cies兲.34 There, the contractor’s expert witness compared its bud-
that work with work during both severely and moderately im- geted labor costs for installing the feeder circuits against the
pacted periods. The government objected to the use of the mea- actual costs for installing the feeder circuits in order to establish
sured mile on the basis that the work during the unimpacted pe- an ‘‘efficiency’’ factor, which represented the contractor’s produc-
riod was not the same as the work during the impacted period, tivity for this work. This factor was then applied to the budgeted
and, therefore, a comparison between the two did not yield an branch circuit work in order to determine a realistic 共or adjusted兲
accurate lost productivity rate. The board recognized that the budget for that work. The expert witness then subtracted the ad-
work performed during an unimpacted period might not always justed branch circuit labor hours from the actual hours to deter-
be identical to the work performed during the impacted period, mine the loss of efficiency overrun caused by the government.

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Fig. 2. Use of calibration curve in ‘‘measured mile’’ type analysis

The board found this to be an acceptable application of the mea- ate productivity losses and may even be appropriate in presenting
sured mile. a lost productivity claim in other forums, such as arbitration. An
Both Clarke Concrete and Lamb demonstrate the continuing example of the use of the calibration curve is found in Fig. 2. In
desire of the boards to utilize methods such as the measured mile this example, the budget for the work was established at 114,000
when actual cost data for lost productivity is not available. The work hours. Due to a low estimate and impacts to the work,
question that arises, however, is whether the labor hours ex- 132,320 actual work hours were needed to perform the work. The
pended must be measured against outputs of work performed calibration curve was used to establish the work-hour overrun due
共e.g., linear feet or linear meters of pipe installed, pours of con- to problems with the estimate, loss of productivity during the
crete, etc.兲 or whether the output could also be based on revenues impact, and loss of productivity after the impact.
earned during particular periods. For example, rather than com- To determine the effect of a low estimate, a calibration curve
paring pipe installed during an unimpacted period against pipe for a budget of 115,000 work hours was projected from the actual
installed during an impacted period, can an equally valid result be cumulative productivity experienced prior to the impact 共i.e., at
obtained by comparing revenue earned by the mechanical work- 48% complete兲. This curve represents that at 48% complete the
ers during an unimpacted period against revenue earned during an actual productivity was trending toward an overrun of 1,000 work
impacted period? This may be a potential method for establishing hours from the original budget. In this example, the main reason
lost productivity costs when other more conventional data 共i.e., for the work-hour increase was an optimistic estimate.
workhours and quantities兲 are not available. To determine the loss of productivity during the impact that
Use of the measured mile, especially when using a ‘‘would/ occurred in the period of 48% complete to 80% complete, a cali-
should have cost’’ analysis will generally require expert testi- bration curve for a budget of 126,000 work hours was projected at
mony. The boards are also consistently finding that the expert the end of the impact period 共i.e., at 80% complete兲. This calibra-
testimony must be supported by project documentation, which the tion curve provides an explanation that 11,000 work hours were
expert has personally reviewed and evaluated and then applied to lost due to lower than expected productivity during the impact
his or her opinion, accordingly. Where the expert has failed to period. This amount is calculated as the difference between the
fully analyze the relevant documentation or interview critical wit- corrected budget 共115,000 work hours兲 and the calibration curve
nesses, the expert’s opinion is questioned and may even be ex- level at the end of the impact period 共126,000 work hours兲.
cluded. Moreover, although an expert’s adjustment to actual pro- Fig. 2 also shows another 6,320 work hours that were lost due
ductivity rates may sometimes be appropriate, the boards will to lower than expected productivity after the impact. This amount
carefully scrutinize these after-the-fact adjustments, especially is calculated as the difference from the final work hours 共132,320兲
when they result in a larger recovery to the contractor. and the calibration curve level at the end of the impact period
In preparing a measured mile analysis, the claims analyst may 共126,000 work hours兲. In this hypothetical example, this addi-
attempt to use a calibration curve concept to demonstrate depar- tional loss of productivity could be attributed to out-of-sequence
ture from the normal performance. Although not used by U.S. working after the impact. This methodology is very sensitive to
courts or boards, calibration curves can be a useful tool to evalu- the calibration curve that is used and should only be used when

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J. Prof. Issues Eng. Educ. Pract. 2004.130:226-236.

 historical productivity data for similar work can support the cali- In 2002, the Veterans Administration Board again approved
bration curve used in the analysis. the contractor’s use of MCAA factors to prove its loss of effi-
ciency claim in the Appeal of Fire Security Systems, Inc. There,
the contractor claimed that it suffered lost productivity when it
Industry Studies and Guidelines encountered unforeseen asbestos on a renovation project. To sup-
On occasion, a contractor’s work is impacted from the outset of port its claim, the contractor relied primarily on its daily logs,
the project, and consequently, a measured mile approach may not which identified disruptions in work due to asbestos. The contrac-
be feasible. In such cases, recent board decisions reflect a fre- tor then used the labor productivity factors in the Mechanical
quent use by claimants of industry studies and guidelines to cal- Contractor’s Association of America manual to calculate its lost
culate lost productivity costs. Boards have demonstrated their productivity claim. The board concluded that because the contrac-
willingness to accept this method of proving lost productivity tor was never able to perform efficiently, the proper method for
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costs. The studies include those done by the Mechanical Contrac- determining the efficiency loss was to use productivity factors
tors Association of America, the National Electrical Contractors from the Mechanical Contractor’s Association manual. The case,
Association, the Construction Industry Institute, and other profes- however, presented a unique twist, because rather than adopt the
sional groups.35 contractor’s MCAA analysis, the board significantly reduced the
In addition to endorsing the measured mile method, the Gen- efficiency loss factors applied by the contractor’s expert and se-
eral Services Board in Clarke Concrete Contractors, Inc. also lected its own factors to fit its evaluation of the facts.39
allowed for the use of industry guidelines in calculating lost pro- Interestingly, in Fire Security Systems, the government also
ductivity costs with some downward adjustment.36 In Clarke argued that because the contractor expended less labor hours than
Concrete, one of the contractor’s subcontractors based its claim it estimated in its bid, it failed to prove its work was impacted.
on the labor productivity rates established by the Mechanical The board disagreed.
Contractors Association 共MCAA兲. 关The government’s argument兴 ignores the possibility that
The MCAA manual lists several types of impacts that may Appellant may have overestimated the amount of pipe and
occur on a project and for each impact assigns a percentage that sprinkler installation effort needed and/or that it worked in
represents loss of labor productivity factors for minor, average, an efficient manner. In either case, a contractor in a fixed-
and severe impact events. In Clark Concrete, based on the MCAA price contract is entitled to any labor cost savings that it
manual, the subcontractor’s president concluded that his company may experience, just as it is out of luck if it underestimates
sustained a 60% loss of productivity in its work. The impacts the amount of effort involved in the contract work.40
considered included stacking of trades 共20% loss兲, concurrent op- Certainly, the use of industry guidelines to prove lost produc-
erations 共15% loss兲, dilution of supervision 共5% loss兲, site access tivity has certain inherent problems, primarily with respect to its
共5% loss兲, out-of-sequence work 共10% loss兲, and competition for subjectivity, and often, the difficulty in validating the criteria used
labor 共not in the MCAA manual but recognized by the board as an in the guidelines, but, it also has positive applications. For ex-
impact, 5% loss兲. The subcontractor then multiplied the lost pro- ample, it can be very useful in evaluating lost productivity that is
ductivity percentage 共i.e., 60%兲 by the work hours it estimated to the result of multiple impacts by enabling the expert to isolate
perform the work at issue in order to determine the additional certain impact events and assign a particular value to that event.
work hours spent due to the impact events. This figure was in turn Although the boards’ growing acceptance of industry studies and
multiplied by the blended hourly rate that the subcontractor paid guidelines to prove inefficiency claims is encouraging to contrac-
its workers to perform the impacted work in order to reach the tors, contractors should nonetheless be cautious in relying on
lost productivity costs incurred by the subcontractor. The board these factors exclusively. It is always beneficial to check the re-
accepted this approach but reduced the subcontractor’s claim sults from an industry guideline analysis against other methods
based on its finding that some of the additional lost productivity for calculating lost productivity, even if the other method is a
costs were a result of contractor delays rather than agency disrup- modified total-cost approach. This check will help assure that the
tions. use of the guidelines does not produce a result that is inconsistent
In Hensel Phelps Const. Co. v GSBCA, the board again al- with the losses that the contractor actually incurred, an inconsis-
lowed the contractor to use MCAA factors to calculate its lost tency that is likely to be raised by the owner’s auditors.
productivity.37 There, the contractor’s expert used six of the
MCAA factors. The expert then determined the total number of
potentially impacted, budgeted work hours for the various parts of Conclusion
the project and distributed them over discrete time periods iden-
tified by the expert. The six inefficiency factors were then applied What does the foregoing mean for the contractor facing loss of
to budgeted work hours as appropriate. The board approved this productivity on the project? It should be clear that most owners,
method and granted a substantial portion of the contractor’s boards, and courts will hold the contractor to the ‘‘triad of proof’’
claim. 共to wit, liability, causation, and resulting injury兲, whether or not
It is noteworthy that in Hensel Phelps the board allowed the they call it by that name. Proving the first element, liability, is
expert to use the MCAA factors only after specifically finding that typically the easiest step in prosecuting a loss of productivity
the expert had performed a thorough evaluation of project claim. Proving liability for loss of productivity should be no more
records, performed extensive interviews of project personnel, and or less difficult than proving liability for any other type of con-
prepared detailed schedules and manpower curves based on the struction claim. Likewise, proving the third element, a resulting
available data.38 Again, this emphasizes the need for the contrac- injury, is not usually the high hurdle. Rather, the key challenge is
tor to maintain reliable and sufficient project documents and data proving the second element, causation. This is especially true
demonstrating the cause and effect relationship between the im- where multiple impacting events occur at the same time. More-
pact event and the lost productivity as well as an exhaustive over, recent cases suggest that oral testimony from project per-
evaluation of the records by the testifying expert. sonnel and hired experts will no longer be sufficiently persuasive

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J. Prof. Issues Eng. Educ. Pract. 2004.130:226-236.

 to support a significant loss of productivity claim unless it is available or the more suspect the data the more difficult it will be
coupled with contemporaneous documentation. for the contractor to recover on the claim. Proper execution will
The writers suggest that contractors will be disappointed in require more than good, contemporaneous project records. It will
their recoveries for these claims unless they alter the project man- also require evaluation of those records at regular intervals and in
agement techniques that they use during the project. For example, a systematic way throughout the project, which will require orga-
where the contractor fails to identify and document loss of nization, creativity, and, most importantly, the discipline to be
productivity until long after the loss occurs, that contractor will consistent.
typically lack the contemporaneous records necessary to link lost
productivity and its cost impact to specific impact events.
Conversely, where the contractor identifies potential productivity Endnotes
losses as they occur, isolate those causes and then track the lost
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productivity through its duration that contractor will be in a better 1

Other types of claims commonly encountered involve schedule
position to present and prove its claim. Although this may seem delay, acceleration, differing or latent site condition, disputed
self-evident, these project management techniques are often over- scope changes, and wrongful termination.
looked when it comes to loss of productivity. Identifying and 2
Studies concerning the effects of extended overtime are noted in
tracking loss of productivity as it occurs is akin to using time- ‘‘Schedule overtime effect on construction progress,’’ Busi-
impact analyses for tracking delay. Time impact analysis, which ness Roundtable 共1980兲; ‘‘The effects of scheduled overtime
evaluates delays to the critical path in real time, has become the and shift schedule on construction craft productivity,’’ Con-
standard for schedule management and delay analysis. The use of struction Industry Institute 共CII兲 共1988兲; ‘‘Effects of scheduled
similar techniques for tracking loss of productivity in real time overtime on labor productivity,’’ H. R. Thomas, J. Constr.
should also become the norm. Eng. Manage. 共1992兲; ‘‘Effects of scheduled overtime on labor
Proper documentation will require discipline from the contrac- productivity: a quantitative analysis,’’ Construc tion Industry
tor’s management team. The contractor should maintain historical Institute 共CII兲 共1994兲; and ‘‘Scheduled Overtime and Labor
data for productivity on various types of projects and on selected Productivity: Quantitative Analysis,’’ H. R. Thomas and K. A.
activities within those projects. This historical data can be derived Raynar, J. Constr. Eng. Manage. 共1997兲.
3
from control accounts, earned value analyses, and rules of credit Thomas H. R., and Kramer, D. F., ‘‘The Manual of Construction
evaluation techniques previously discussed. The historical data Productivity Measurement and Performance Evaluation, a Re-
may need to be project specific and activity specific. For example, port to the Construction Industry Institute,’’ Univ. of Texas
data used on erecting a power plant in the northeast United States at Austin, May 1988.
4
may be substantially different and, therefore, not necessarily use- For a discussion on the various bases for which contractors have
ful for evaluating a steel mill in Saudi Arabia. Likewise, installing recovered for lost productivity, see, MCI Constructors, Inc.,
pipe on an offshore natural gas facility will reveal different pro- DCCAB No. D-924 共June 4, 1996兲; Centex-Bateson Construc-
ductivity data than installing that same pipe on an onshore natural tion Co., Inc., supra note 8; Clark Construction Group,
gas facility. The contractor must take the time to compile detailed VABCA No. 5674, 00-1 BCA ¶ 30,870; Luria Brothers & Co.
historical data. These data can then be used for estimating pur- v U.S., 369 F.2d 701 共Ct.Cl. 1966兲; Leo Harmonay, Inc. v
poses and for comparing productivity on a given project or for a Binks Mfg. Co., 597 F.Supp 1014 共S.D.N.Y. 1984兲.
5
given activity against a reliable baseline. Id.
6
The contractor may also use manpower or calibration curves Centex-Bateson Construction Co., Inc., VABCA Nos. 4,613,
during the project to establish a baseline and track manpower 5,162 through 5,165, 99-1, BCA ¶ 30,153.
usage against the baseline at regular intervals during the project. 7
Hoffman Construction Co. v U.S., 40 Fed Cl. 184 共1998兲; aff’d
These types of curves may be used to isolate productivity losses in part, rev’d in part 178 F.3d 1313.
8
during selected periods. The impact periods identified in the man- Stroh Corp. v General Services Admin., GSBCA No. 11,029,
power curves can then be evaluated in light of project reports 96-1 BCA ¶ 28,265.
共daily, weekly and monthly兲 or other documents that describe 9
Servidone Construction Corp., Eng. BCA No. 4736, 88-1 BCA ¶
specific impact events 共e.g., lack of site access, design changes, 20,390.
10
late owner-controlled equipment, weather, etc.兲. The contractor Centex Bateson Construction Co., Inc., supra note 6.
11
should also consider creating specific cost codes for each lost Id.
12
productivity claim. The cost codes should be updated on a regular Id.
13
basis, and the support documents for the costs should be main- See, Coates Industrial Piping, VABCA No. 5412, 99-2 BCA ¶
tained separately so that they can be easily gathered and utilized 30,479. There, the board acknowledged that impact costs are
as necessary. recoverable as a separate constructive change under the FAR
Finally, owners want to be notified of loss productivity claims Changes clause. But, the mere existence of numerous govern-
as early as possible. The longer the contractor waits to present ment changes is insufficient to establish compensability for
these types of claims, the greater the skepticism he will encounter the cumulative impact of the changes. The contractor must
from the owner. Claims that are presented early and with great prove causation. See also, J.A. Jones Construction Co., Eng.
detail have a far greater likelihood of being resolved without the BCA Nos. 6348, 6386-6391. 00-2 BCA ¶ 31,000.
14
need for litigation or arbitration. Moreover, if the claim is pre- Clark Construction Group, supra note 4.
15
sented early, then it may help to prevent similar impacts later in Id.
16
the life of the project. For example, if the owner realizes that late In light of the length of analysis by the board as to each of the
design changes are causing significant cost overruns, it may elect subcontractor’s inefficiency claims, this article will only
to withdraw those changes or refrain from issuing future changes. highlight of few of them.
17
The key to recovering and defending against lost productivity Clark Construction Group, supra note 14.
18
claims lies in the data collected by the contractor. The less data See also, Hoffman Construction Co. v U.S., supra note 7.

JOURNAL OF PROFESSIONAL ISSUES IN ENGINEERING EDUCATION AND PRACTICE © ASCE / JULY 2004 / 235

J. Prof. Issues Eng. Educ. Pract. 2004.130:226-236.

 19
Lamb Engineering & Construction Co. Eng. BCA No. Bibliography
C-9304172, 97-2 BCA ¶ 29,207. Allmon, E., Haas, C. T., Borcherding, J. D., and Goodrum, P. M. 共2000兲.
20
See, ‘‘Key information to measuring productivity,’’ herein. ‘‘U.S. construction labor productivity trends, 1970–1998.’’ J. Constr.
21
See generally, Luria Bros., supra note 4. Eng. Manage., 126共2兲, 97–104.
22
Stroh Corp. v General Services Admin., supra note 8. Business Roundtable. 共1980兲. ‘‘Scheduled overtime effect on construction
23
Modified Total Cost differs from Total Cost to the extent that it projects.’’ Rep. No. C-2, Business Roundtable, New York.
takes into account adjustments by the contractor to its Business Roundtable. 共1982兲. ‘‘Absenteeism and turnover,’’ Rep. No. C-6,
planned costs to account for inaccuracies in the bid or the Business Roundtable, New York.
contractor’s own inefficiencies. The burden of proof for both Cass, D. J. 共1992兲. ‘‘Labor productivity impact of varying crew levels,’’
methods is the same. 1992 AACE Transactions, Orlando, Fla., C2.1–2.9.
24 Clark, F. D., and Lorenzoni, A. B. 共1978兲. ‘‘Labor productivity.’’ Chapter
MCI Constructors, Inc., supra note 4, citing Servidone Constr.
5, Applied cost engineering, Marcel Dekker, New York, 61–73.
Corp. v U.S. 931 F.2d 860 共Fed. Cir. 1991兲; see also, Appeal
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Construction Industry Institute. 共1988兲. ‘‘The effects of scheduled over-

of Batteast Construction Co., Inc., ASBCA Nos. 35,818 & time and shift schedule on construction craft productivity.’’ Rep. to
36,609, 92-1 BCA ¶ 24,697. Construction Industry Institute under the Guidance of Task Force 83-2
25
See generally, MCI Constructors, Inc., supra note 4. Based on Productivity Measurements and the Overtime and Shiftwork Subcom-
the scope of this article, the total cost, modified total cost, and mittee, CII, Univ. of Texas, Austin, Austin, Tex.
jury verdict methods will not be addressed in detail here. Dieterle, R., and DeStephanis, A. 共1992兲. ‘‘Use of productivity factors in
26 construction claims.’’ 1992 AACE Transactions, Orlando, Fla., C1.1–
See, ‘‘Key information to measuring productivity,’’ herein.
27 1.7.
Clark Concrete Contractors, Inc., GSBCA No. 14,340, 99-1
BCA ¶ 30,280. Hackney, J. W., ‘‘Labor productivity and labor productivity analysis.’’
28 Chapters 12–13, Control and management of capital projects, 2nd
Although the board’s analysis of liability and causation was not
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