Loss of productivity claims tend to be difficult and expensive claims in construction. They result from a change event which is the underlying event that disrupts or idles a crew’s workflow, such as a differing site condition or a design change. In addition to the amount of change, the timing of change can dramatically affect productivity, with late change typically being more disruptive (sometimes twice as disruptive) than early change.
Loss of productivity claims are difficult to resolve, not only because it can be challenging to meet the burden of proof for causation, but also because most of the damage quantification methods are indirect and imprecise. Certain methodologies for quantifying damages require a comparison of a craftworker’s actual productivity to what was planned or what was reasonably planned. That is, a comparison between an actual condition and a forecast, which may not be reliable.
The measured mile methodology, on the other hand, does not rely on forecasts, making it preferred by most fact finders. It compares actual productivity during an impacted period to a similar, unimpacted (or less-impacted) period of the project. To draw meaningful comparisons and conclusions about productivity when using the measured mile approach, the unimpacted period must be sufficiently similar to the impacted period. A key question becomes what constitutes “sufficiently similar”? This article highlights important factors to consider when identifying whether an unimpacted period is sufficiently similar to the impacted period.
Key variables and conditions for determining what is “sufficiently similar” may include but is not limited to the following: type of work, means-and-methods, crew and workforce characteristics, project schedules seasonality, responsiveness, subcontractor and supplier performance, and sample size.
Type of work is an important criterion for determining if a measured mile exists and how it can be used. For example, large bore and small bore pipe work may be sufficiently comparable because “pipe is pipe” whereas it will be harder to make the case for reinforced and prestressed concrete. While both reinforced and prestressed concrete are types of concrete that integrate rebar for tensile strength, the construction installation processes are substantially different. Reinforced concrete is generally slower and more labor intensive because the rebar steel must be manually placed within the forms before the concrete is poured and time is needed for the concrete to properly cure. Prestressed concrete is generally faster because the prestressing process can be done off-site at streamlined fabrication facilities and the process requires less reinforcement during onsite installation leading to faster construction times and reduced labor costs. As an example of “similar work methods”, one noteworthy case determined that work on large electrical feeder circuits was sufficiently comparable to work on branch wire even though the conduit sizes were different, the feeders were installed in longer continuous runs and in interstitial spaces, and the feeders did not involve device installations. Appeal of P.J. Dick Appeal VABCA 5597 et al., 2001-2 BCA ¶31,647.
Contractor means-and-methods are an important factor when assessing the suitability of comparing two work periods. The Federal Circuit found in one case that welding metallic pipe and polyethylene pipe were too dissimilar even though both were claimed by the pipefitters trade and both involved a heating process. P.W. Construction, Inc. v. U.S., 53 Fed. Appx. 555 (Fed. Cir. 2002). Likewise, placing concrete by pump versus a crane-and-bucket system would usually be too dissimilar even though the same material and trades are involved. Work performed at grade level may be considered dissimilar from work performed at an elevated grade or below grade. Similarly, the location of laydown areas where construction materials are stored, and prefabrication shops can impact productivity to an extent that two work periods may be considered insufficiently similar.
There are nuances associated with crew and workforce characteristics that should be considered when evaluating whether a measured mile approach would be suitable for a disputed project. Key factors include crew sizes, foreman/journeyman/apprentice ratios, union or nonunion labor force, and the training level and familiarity with the site from previous projects. The measured mile approach may also be impacted by the composition of the workforce between local labor and a more senior traveling team from outside of the regional area.
Project schedule is another important measured mile factor. Due to the nature of construction projects, project schedules tend to be “bell curved” and include more activities and trades being performed during the middle of the schedule than at the start or closeout of a project. Therefore, a disruption during a project’s mid-point could more severely impact a project’s schedule than a disruption at the beginning or end of a project. If the project schedule requires trades to be stacked and performed concurrently, this may also cause congestion especially if the work is performed in the same location on the project site. Congestion is likely to lower productivity. Finally, when considering a project schedule and applying a measured mile approach, the analyst should consider the planned work hours. Working a normal forty-hour work week versus working overtime or shiftwork impacts productivity. Even if a project schedule is a standard forty-hour work week, productivity may be higher if the schedule reflects a four day work week versus a five day work week.
Related to schedule is a project’s seasonality. Winter earthwork operations in the northern United States are typically less productive than summer work because of temperature and differences in windspeed, precipitation, daylight, and humidity. So, if a job is pushed into a different season than planned, productivity may be impacted.
Responsiveness, on behalf of the owner and contractor, can be another variable to consider when testing the similarity of impacted and unimpacted periods. Completeness and timing of shop drawings and requests for information submitted by contractors as well as the review of key documents by owners can significantly impact productivity. The accuracy and speed of inspection procedures is another factor to consider in evaluating whether there is sufficient similarity. Moreover, factors impacting the quality of supervision and management of work will impact productivity.
Subcontractor and supplier performance should also be reviewed to determine if the impacted and unimpacted periods are suitable for comparison. A contractor’s productivity is often impacted by a poorly performing subcontractor. If the subcontractor is subsequently replaced, the performance period by the replacement subcontractor may provide a sufficiently similar period of comparison.
Finally, when conducting a measured mile analysis, sample size plays an important factor. Industry guidelines suggest that a measured mile should be at least 10% of the total work. Anything less is sometimes referred to as a measured meter. Averages can be misleading though. Consider, for instance, three months of measured-mile work where the monthly productivity factors (actual productivity relative to planned productivity) are 1.1, 0.9 and 1.0 versus three months of 1.5, 0.5, and 1.0. Though both examples have an average productivity factor of 1.0, the first example is clearly a more reliable sample than the second example. In other words, a statistic called the standard deviation can be influential.
Construction is a complicated business, and the factors listed above are just some of the key factors that can help a trier-of-fact, expert, and advocate determine what constitutes a proper measured mile. There will never be perfect similarity between the conditions of an unimpacted and impacted periods, so when identifying a measured mile, decisions should be made on a balanced, comprehensive basis. There is no bright-line test and analysts should consider the totality of the circumstances when applying a measured mile approach. Industry publications, such as ASCE’s “Identifying, Quantifying, and Proving Loss of Productivity Claims”, contain useful guidelines for understanding and assessing such claims.