Holloway Consulting assists clients in becoming more familiar with construction damages and labor productivity analysis topics. The posts below are designed to provide you with a better understanding of popular construction labor productivity analysis topics, along with examples of how they have been used and misused recently in calculating loss of labor productivity and damages claims.

Quantitative Impacts of Project Change“, by C.W. Ibbs and Walter E. Allen

In an attempt to isolate the impact of change orders on labor productivity, Ibbs selected “normal” projects where changes and change orders occurred, but without other impacts such as delay, acceleration, trade stacking, learn curve, multiple shifts, bid error, labor force mismanagement, etc. These projects were in the $40 million to $1.2 billion range, and can be described as EPC turnkey contracts with a direct hire labor force working either 4 – 10 hour days or 5 – 8 hour days. Projects with multiple shift and/or overtime work were excluded from the study.

The Effects Of Change Orders on Productivity“, Charles A. Leonard

The Leonard document is based on a very different set of projects, as compared to Ibbs. In preparing his master’s thesis, Leonard selected 57 Canadian building and industrial facility projects that were completed on a lump-sum or unit price, competitive bid basis. Leonard excluded projects such as nuclear power, offshore, and heavy civil projects. Predictions obtained from Leonard’s document are approximations, which do not account for the specific circumstances of a particular job. Courts require strict proof of causation or connection between cause and effect. Based on Holloway’s recent experience, an increasing number of contractors are basing their loss of productivity claims solely on these studies, at the expense of proper causation analyses.

Quantifying The Cumulative Impact Of Change Orders For Electrical and Mechanical Contractors“, by the Construction Industry Institute Cumulative Change Order Impact Research Team

The reported purpose of this study was to quantify the cumulative impact of change orders on the labor efficiency of electrical and mechanical contractors. The research team consisted of representatives from the electrical and mechanical contracting community and other members of CII. Contractors submitted survey data from projects that were “perceived” to be over budget as a result of change orders, rather than from factors such as low estimates, unforeseen weather conditions, or poor field planning.

Industry experts agree that this document was prepared in such a way as to produce biased and unreasonable results, and to encourage the document’s misuse. In addition, industry experts agree that asking contractors to participate in the preparation of a document that might be used in the future by those same contractors in an effort to “validate” their claims against owners is patently unreasonable.

Measured Mile Method

Since 1986, the “Measured Mile” has been a popular analytical method used by construction damages experts in an effort to quantify direct labor productivity losses on construction projects. The stated goal of this method is to compare productivity during periods of a project that have been adversely impacted by unanticipated excusable/compensable causal events to productivity during those period(s) that were not impacted, or that were unhindered. This un-impacted or unhindered period of labor performance is referred to as the “Measured Mile”, which is used as the baseline to predict what the labor performance (and final labor man-hour and cost budgets) should-have-been (Wouldn’t our work be less interesting without such catchy descriptors as Measured Mile, Time Impact, But-For, etc.?)

In the context of a “Measured Mile” analysis in a construction project dispute, a no-stone-unturned causation analysis theoretically examines all of the potential causes of excusable and non-excusable events. As much as the participants (experts, attorneys and triers of fact) would like to believe that a no-stone-unturned approach can and should be applied to every such analysis, in reality this rarely happens in these analyses because of lack of data, lack of time, cost concerns, etc. As a result, experience shows that many parties base their Measured Mile analyses on the period of performance that was “least” impacted by excusable and non-excusable events.

BLS Study
This often-quoted BLS study was based on highly repetitive manufacturing tasks, and its relevance to construction has been questioned.

1994 MCAA Bulletin on Change Orders, Overtime and Productivity

BRT Report
The Business Round Table has issued reports questioning whether or not their “1.0 productivity” is the same as other studies.

NECA Studies
The National Electrical Contractors Association has issued various types of materials on the adverse affects of delays, disruptions, change orders and other causal events on the productivity of craft workers, particularly electricians.

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