Steve Holloway performs construction productivity expert and expert witness services based in Denver, Colorado. Steve’s experiences as a construction productivity expert date back to the 1970s and 1980s when he was part of Project Management Teams. He has served since 1990 as a construction productivity expert with three consulting firms – Kellogg Corp., Navigant, and now the Holloway Consulting Group. In addition, Steve has testified numerous times at arbitration and trial on construction productivity topics. As a result, he endeavors to stay abreast of the case law that guides construction productivity experts.
Construction Productivity
The ratio of input to output (I/O) defines productivity. For example, an hour of welding labor should produce a certain quantity of weld inches completed. Contractors based their estimate, bid, and contract prices on assumptions (e.g., labor and equipment productivity factors) regarding, e.g., the number of weld inches each welder will complete each day. Lower productivity rates will adversely impact contractors when workers fail to meet their productivity rates. Furthermore, many, if not most, inefficiency claims revolve around the differences between bid/contract and actual labor or equipment productivity.
The most widely known construction productivity measurement systems emerged from the heavy construction sectors of the industry. Fluor, KBR, Bechtel, and most other sophisticated firms treat productivity control as a subset of cost accounting and cost engineering systems. In contrast, many small contractors have become discouraged by the apparent complexity and the expense of operating an extensive cost-control system.
It is rare for the contractor’s construction productivity to be monitored or managed. Therefore, when a claim arises, the contractor’s construction productivity must be reconstructed and analyzed retrospectively by experts.
Barriers To Monitoring Productivity
Remarkably, even today, many contractors do not measure or monitor construction productivity. Common justifications for not doing so include the following:
1. I’ve never really monitored productivity,
2. I don’t know how to measure productivity correctly,
3. A productivity control system would be too expensive for me to maintain,
4. My competitors don’t measure productivity,
5. I can’t control productivity, and
6. Productivity measurement will not tell me anything about my project I don’t know.
Past practices where productivity measurement was not a necessity are reflected in the first two reasons cited above. However, increasing competition for projects, moderate inflation rates, increased project complexity, and greater exposure to legal and financial risks are beginning to change this situation. Productivity measurement has emerged as an inexpensive way to control one of the more important contractor risks; craft labor man-hours.
Origins Of Measurement Systems
The prevailing attitude seems to have been that productivity measurement must be a part of a complex system. However, one can separate the two functions of productivity control and cost control. In doing so, productivity measurement and control can be made simple, inexpensive, effective, and timely.
Let’s consider the last two challenges to productivity measurement. Studies have consistently shown that certain problems result from the way projects are designed, organized, planned, and managed, and that these conditions exist whether the project is large or small, commercial or industrial, union or merit shop. A growing body of knowledge says that productivity can be controlled at relatively little cost to the contractor.
Causes Of Productivity Loss
Following are a few of the more commonly reoccurring causes of poor productivity that are often within the control of the contractor:
1. Crews are too large, especially at the beginning and end of an activity,
2. Stockpile and storage areas are poorly organized,
3. Materials are inadequately marked or not sorted for easy retrieval,
4. Delays result from waiting for tools and equipment,
5. Housekeeping practices are poor,
6. Inability to maintain continuity or momentum because crews are reassigned to different work or locations,
7. Work of one crew interferes with that of another,
8. Sequencing and control of the work are poor, and
9. Material deliveries are untimely.
This list could easily be expanded, but the important point is that many of these causes exist to varying degrees on all construction projects. Many causes are subtle and appear gradually. Some exist but are never noticed. The damage often has already been done by the time a problem is noticed. Corrective action is perceived to cost more than it would save in other cases.
Other Causes
Other causes of productivity loss that manifest themselves on impacted jobs and lead to claims are often beyond the contractor’s control, such as:
1. Weather
2. Out-of-sequence work
3. Acceleration
4. Changes
5. Overtime
6. Defective contract documents
7. Trade stacking, and
8. Delays