Productivity Loss & Disruption Claims
Document Type: Advanced Procedure
Version: 1.0
Last Updated: February 2026
Distribute To: Project Managers, Estimators, Claims Personnel
Complexity: Enterprise-level
Purpose
Provide sophisticated methodologies for quantifying and proving productivity loss claims, including measured mile, industry studies, and total cost approaches.
Why Productivity Claims Are Difficult
- Causation is complex - Many factors affect productivity
- Documentation is critical - Must track as work occurs
- Burden of proof is high - Contractor must prove impact
- Owners challenge aggressively - High-value, hard to verify
- Methods have limitations - No perfect approach
Types of Productivity Loss
1. Direct Impact
Specific events causing immediate productivity loss:
- Out-of-sequence work
- Stacking of trades
- Overtime inefficiency
- Adverse weather
- Site access restrictions
2. Cumulative Impact
Aggregate effect of multiple changes:
- Death by a thousand cuts
- Ripple effects
- Learning curve disruption
- Management distraction
3. Acceleration
Required to complete on time despite excusable delay:
- Overtime premium
- Additional crews
- Shift work
- Compressed schedule
Productivity Measurement Methods
Method 1: Measured Mile Analysis
The Preferred Method When Possible
Concept:
Compare productivity during impacted period to productivity during unimpacted period on same project.
Requirements:
- Same or similar work
- Same crew (ideally)
- Unimpacted baseline period
- Detailed records
Calculation:
Baseline Productivity (Unimpacted):
Units ÷ Hours = Units/Hour (or Hours/Unit)
Impacted Productivity:
Units ÷ Hours = Units/Hour
Loss Factor:
(Baseline - Impacted) ÷ Baseline = % Loss
Damages:
Impacted Hours × Loss % × Labor Rate = Lost Productivity $
Example:
Electrical Conduit Installation:
Baseline Period (Months 1-3, unimpacted):
- 10,000 LF installed
- 2,000 labor hours
- Productivity: 5.0 LF/hour
Impacted Period (Months 4-8, stacking/changes):
- 15,000 LF installed
- 4,500 labor hours
- Productivity: 3.3 LF/hour
Loss:
(5.0 - 3.3) ÷ 5.0 = 34% productivity loss
Expected hours at baseline: 15,000 ÷ 5.0 = 3,000 hours
Actual hours: 4,500 hours
Lost hours: 1,500 hours
Damages at $75/hour: 1,500 × $75 = $112,500
Strengths:
- Project-specific data
- Accounts for learning curve
- Same crew/conditions
- Most defensible
Limitations:
- Need unimpacted period
- Sufficient data points
- Work must be comparable
Method 2: Industry Studies
When Measured Mile Not Available
MCAA Study (Mechanical Contractors):
Factors for various impact conditions
| Condition | Loss Factor |
|---|---|
| Stacking of trades | 10-15% |
| Overtime (50+ hrs/wk) | 10-15% |
| Morale/attitude | 5-15% |
| Reassignment of manpower | 5-10% |
| Site access | 5-12% |
| Beneficial occupancy | 15-25% |
| Joint occupancy | 5-15% |
NECA Study (Electrical Contractors):
Similar factors for electrical trades
Leonard Study:
Impact of changes on productivity
| % Change Orders | Productivity Loss |
|---|---|
| 0-10% | Minimal |
| 10-20% | 8-12% |
| 20-30% | 12-20% |
| 30%+ | 20-30%+ |
Cautions:
- Not project-specific
- Owners challenge applicability
- Use as cross-check
- Best combined with project data
Method 3: Total Cost Approach
Last Resort Method
Concept:
Claim difference between bid cost and actual cost.
Formula:
Actual Cost - Bid Cost = Claimed Damages
Requirements (Courts require ALL):
- Nature of work makes detailed cost proof impractical
- Bid was reasonable
- Actual costs are reasonable
- Contractor not responsible for cost increase
Weaknesses:
- Assumes bid was accurate
- Doesn't prove causation
- Doesn't separate contractor issues
- Often rejected by tribunals
When Acceptable:
- Extremely complex impact
- Records don't allow other methods
- Clear owner causation
- No contractor fault
Method 4: Modified Total Cost
Concept:
Total cost approach with adjustments for known contractor issues.
Formula:
Actual Cost
- Bid Cost
- Known Contractor Issues
- Bid Errors
= Net Claimed Damages
More Defensible Than Pure Total Cost:
- Acknowledges imperfect bid
- Removes contractor delays
- Shows good faith
Cumulative Impact Claims
The "Ripple Effect":
Multiple small changes create compounding impacts:
- Each change disrupts workflow
- Crews constantly remobilize
- Management overwhelmed
- Learning curve resets
- Efficiency degrades project-wide
Quantification Approaches:
1. Track Cumulative Hours:
- Budget hours by activity
- Actual hours by activity
- Variance analysis
- Correlation to change order volume
2. Leonard/Ibbs Study:
- Correlates CO% to productivity loss
- Academic basis
- Challenged but used
3. Project-Specific Analysis:
- Document each disruption
- Estimate each impact
- Sum total effects
- Cross-check reasonableness
Documentation Requirements
Real-Time Tracking Critical:
| Document | Frequency | Data |
|---|---|---|
| Productivity reports | Weekly | Units/hours by task |
| Daily reports | Daily | Crew size, work performed, delays |
| Manpower logs | Daily | Workers by trade, hours |
| Change order log | Ongoing | COs, PCOs, timing, impact |
| Disruption log | As occurs | Events, impact, duration |
| Photo documentation | Daily | Progress, conditions |
Disruption Log Format:
================================================================
DISRUPTION EVENT LOG
================================================================
Date: ______________ Event #: _____________
Description: _______________________________________________
___________________________________________________________
Cause: ____________________________________________________
Impact:
- Work affected: __________________________________________
- Crew(s) impacted: _______________________________________
- Hours lost: _____________________________________________
- Estimated productivity loss: ______%
Supporting Documents:
☐ Daily report
☐ Photos
☐ Correspondence
☐ RFI/Submittal
Notice Provided: ☐ Yes Date: __________ ☐ No
Logged By: ________________________ Date: ________________
================================================================
Proving Causation
Elements Required:
- Owner action or inaction caused disruption
- Disruption caused productivity loss
- Loss is quantifiable
- Contractor did not cause loss
Causation Analysis:
Event → Direct Impact → Productivity Loss → Damages
Example:
Stacking (Event)
→ Trades in same area (Impact)
→ 25% productivity loss (Measurement)
→ $150,000 additional labor (Damages)
Acceleration Claims
Types:
Directed Acceleration:
- Owner directs faster completion
- Usually documented
- Straightforward claim
Constructive Acceleration:
- Excusable delay occurs
- Time extension requested
- Time extension denied (or ignored)
- Contractor directed to maintain schedule
- Must accelerate to comply
Constructive Acceleration Elements:
- Excusable delay occurred
- Timely notice and time extension request
- Request denied or not timely granted
- Order to maintain schedule
- Actual acceleration
- Acceleration costs incurred
Acceleration Costs:
| Item | Documentation |
|---|---|
| Overtime premium | Payroll, time cards |
| Additional crews | Crew logs, payroll |
| Shift premium | Payroll |
| Equipment | Equipment logs |
| Supervision | Time records |
| Lost efficiency | Productivity analysis |
Expert Requirements
For Significant Productivity Claims:
Construction Expert:
- Understands means and methods
- Can identify impacts
- Industry credibility
Forensic Accountant:
- Cost analysis
- Damage quantification
- Financial documentation
Scheduling Expert:
- If schedule impacts involved
- Critical path analysis
- Acceleration proof
Related Documents
- Schedule Delay Analysis
- Claims Procedures
- Change Order Management
- Daily Reporting
References
- MCAA Bulletin No. T-14 (Change Orders/Productivity)
- NECA Overtime and Productivity Study
- Leonard "Effects of Change Orders on Productivity"
- Ibbs, et al. "Quantitative Impacts of Change"
- Schwartzkopf "Calculating Lost Labor Productivity"
Template provided by support.construction. Enterprise-level productivity analysis for sophisticated claims.