THE CHALLENGES OF LOST PRODUCTIVITY: PROVING AND QUANTIFYING A CLAIM

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Lost productivity can be the result of delays, acceleration or changes to the
work. As with any claim for increased cost, proof of causation and proof of
costs are both necessary. This report examines both. Experts in the field of
construction productivity and claims provide a comprehensive view of the
subject, discussing quantitative and qualitative aspects of proof and
causations, methods of calculating costs with useful tips and techniques to
minimize productivity losses and to assure maximum recovery in the event
of a claims situation. Select court and board decisions provide a realistic
backdrop of how the industry has arrived at the accepted approaches
commonly in use today.

Table of Contents
Introduction ......................................................................................................................... iv
Part 1 – Causation
1. THE CUMULATIVE IMPACT OF CHANGE ON CONSTRUCTION LABOR
PRODUCTIVITY ........................................................................................................... 1
2. CAUSATION AND CAUSE-EFFECT ANALYSES ............................................................ 7
3. CONSTRUCTION LEARNING CURVES: FACTUAL OR IMAGINED? ........................... 13
4. THREE BOARDS OF CONTRACT APPEALS DECISIONS
a. Labor Inefficiency Analysis Rejected Due to
Methodology
Appeal of AEI Pacific, Inc. ............................................................................... 19
b. Lost Production Efficiency Not Shown by
Government Delay
Appeal of Fox Construction, Inc. ...................................................................... 21
c. Contractor Uses “Measured Mile” Approach to
Support and Quantify Site Condition Claim
Appeal of Bay West, Inc. ................................................................................... 23
Part 2 – Quantification
5. USING PRODUCTIVE TIME TO CALCULATE LABOR INEFFICIENCIES ................... 25
6. USING INDUSTRY AVERAGE CURVES TO CALCULATE LABOR INEFFICIENCIES .. 27
7. RESULTANT INJURY AND THE MEASURED MILE ................................................... 29
8. THE BASELINE ANALYSIS ........................................................................................ 32
9. FOUR COURT DECISIONS ON QUANTIFICATION OF PRODUCTIVITY LOSSES
a. Contractor Recovers Acceleration Costs Using “Measured Mile”
Method
James Corporation v. North Allegheny School District .................................. 35
b. Court Allows “Measured Mile” and “Total Cost” Methodologies
Alstom Power, Inc. v. RMF Industrial Contracting, Inc. ................................ 37
c. Lost Efficiency Calculated Against Planned Rate of Production
State of Texas v. Mid-South Pavers, Inc. ......................................................... 39
d. Court Upholds Submissable Claims For Breach of Contract and
Loss of Productivity
Gill Construction, Inc., Appellant-Respondent, v. 18th & Vine Authority,
Respondent Appellant, City of Kansas City, Missouri, Respondent .............. 41
Part 3 – Best Practices in Proving Impact Claims
10. BEST PRACTICES IN PROVING IMPACT CLAIMS AND SUBSTANTIATING
PRODUCTIVITY LOSES
a. Proving Impact Claims ................................................................................. 43
b. Proving Delay Damage and Impact Claims ............................................. 46
c. Impact Claims: The Documentation Process .......................................... 52
d. A Preventative Approach to Impact Claims............................................ 54
Part 4 – AACE Recommended Practice No. 25R-03
11. ESTIMATING LOST LABOR PRODUCTIVITY IN CONSTRUCTION CLAIMS .............. 61

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