Labor Productivity Claims

Labor productivity claims are some of the most contentious claims in the construction industry. This is based, in part, on the fact that labor productivity losses are often difficult to distinguish contemporaneously, as opposed to many claims which are related to direct costs. Additionally, labor productivity rates and other related data are often not tracked on construction projects with any degree of precision. As a result, substantiating a cause-and-effect relationship between issues and resulting labor productivity losses and establishing entitlement to recovery for lost labor productivity can be a difficult process.

Construction labor productivity is typically measured as labor hours per quantity of material installed. Labor productivity loss is experienced when a contractor, or a particular crew, is not accomplishing the anticipated or planned production rates. In other words, a loss of productivity is when it takes more labor and equipment to do the same amount of work, thereby increasing project costs. There are many common causes for labor productivity impacts on a construction project, stemming from owners, contractors, and construction managers. Common causes include, but are not limited to, mismanagement and maladministration, site access restrictions, differing site conditions, defective plans and/or specifications, changes in the work; labor availability, turnover, rework, testing/inspections, overtime and/or shift work, interferences, changes in construction means and methods, over crowding, out-of-sequence work and inclement weather.

Primary challenges associated with labor productivity claims are identifying the root cause of labor productivity issues, quantifying associated labor productivity losses, corroborating the cause-and-effect relationship, and establishing entitlement to damages. One must review the contract to understand the basis of the agreement as certain productivity issues may have been foreseeable and therefore possibly accounted for in the contract commercial terms. The contracts may also identify if a party accepted certain productivity risks, and what contractual rights may exist to recover labor productivity damages. Interface Consulting’s construction claims consultants have in-depth knowledge of productivity tracking methods and quantification techniques and extensive experience evaluating labor productivity issues, performing root cause analyses, and quantifying damages. Our consultants prepare and analyze labor productivity claims, present in meditations, and testify in litigation and arbitration proceedings on issues concerning labor efficiency and productivity loss.

Interface Consulting has in-depth knowledge of labor productivity tracking and controls, impacts, industry studies, and quantification techniques. While each project has its own unique challenges and issues, Interface Consulting’s labor productivity analyses typically consider our experience in the field as project/construction management professionals, testimony and interviews of key project personnel, contemporaneous project documents (e.g., progress reports, daily reports, time sheets and labor records, etc.), our education and specialized training, as well as recognized industry labor productivity studies and reports. Our construction claims consultants specialize in labor productivity analysis and typically utilize the following industry-recognized methodologies, where appropriate: 

It should be noted that the selection of a particular productivity analysis methodology depends on the project facts, the nature of the events being analyzed, the nature and extent of available labor data, and may vary from project to project. Each of the above-referenced productivity analysis methodologies has inherent advantages and disadvantages. Interface Consulting has extensive experience handling construction labor productivity claims and our construction claims consultants are skilled at tailoring our productivity analysis approach to suit a project’s needs and constraints.