Thursday, October 15, 2015

Effectively Tracking Labor Productivity

Many contractors say that they have lost productivity due to change orders, sequencing issues, overtime, or trade stacking.  But how can we as lawyers go about proving that lost productivity?  

Peter Vosbikian is a Certified Cost Engineer and Certified Forensic Claims Consultant with over twenty years of experience in construction claims consulting.  For the past ten years, he has worked with Forum Sponsor Greyhawk. Peter has provided three tips on how to document and prove labor productivity claims.  

Effectively Tracking Labor Productivity

Many of us have heard the adage, ‘If it’s not written, then it didn’t happen.’  We’re all aware that productivity is an important concept in our industry.  Low productivity can result in delays and damages, which can lead to disputes and claims.  Effectively documenting the work progress and monitoring productivity can provide stakeholders with the necessary visibility for tracking whether or not they are working towards a successful bottom line.  It can also help in situations involving damages caused or alleged to have been caused by productivity loss.  While appropriately documenting the information is important, the daily demands of managing a construction project can shift focus away from such daily data compilation, and this in turn could result in challenges to being able to effectively demonstrate the causation for actual losses incurred.  The following summarizes some of the data that may be helpful for stakeholders to better track their actual productivity.
1.  DOCUMENT material quantity installed

How much material was installed?  Track the quantity of material installed, or work completed on an operation and crew basis.  The units used to track production for a given material should remain consistent throughout the life of the project (whether they are cubic yards, cubic feet, lineal feet, or other).  For example a concrete contractor may track its production in cubic yards.  Therefore this unit of measure for tracking the installed quantity should remain the same unless unique circumstances dictate otherwise.  The installed or completed quantities should be tracked no less than once per day or shift.  Ensure that the tracked quantity is consistent with the time and labor units expended on that specific material or operation.

2.  DOCUMENT labor expended

How many man-hours were expended performing the work corresponding to the material installed?  Document the labor that was expended to install the materials noted.  The labor expended reflects the required resources to perform a given amount of work or achieve a specific amount of output.  Record the number of working laborers, man-hours for each, and the work shift specific to the operation and crew.  It is equally as important to track downtime, or the number of hours that labor was assigned to work a specific task or operation, but couldn’t.

3.  DOCUMENT impacts and disruptions

What delays or impacts were encountered in performing the work and what were the causes?  Record any impact or disruption to the work.  In particular, any start and stops, suspensions, interruptions to the operation, remobilizations, or any slowed progress.  Record any disruption (disturbance or problems that impacted the work) or any events that caused the work to not be performed in the fashion or manner intended.  Any record of such work disruptions should be accompanied by an explanation or photos of what event(s) or impact(s) that resulted in the lower productivity.  For example, merely noting an effect only description, “The installation of conduit was delayed”, may be insufficient.  Rather, a cause and effect description of, “The conduit installation on the first floor was impacted during the AM shift because of a design change that required rerouting previously installed conduit”, may be more helpful in establishing causation.

For us lawyers, this is a good guide to the kind of information we should be asking our clients to provide to us when they want to make a claim for lost labor productivity. It is also the information that we should request in discovery when faced with such a claim.

Peter is glad to answer any questions you may have regarding this article.  If you do have a question, please e-mail him.

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