When dealing with construction claims, many people believe that labor costs are typically the most influential factor in any request for additional compensation. In general, the term “labor productivity” refers to the measurement or unit of work completed over a predetermined period. A contractor typically bids on a scope of work based on certain assumptions about labor productivity and costs. When a contractor uses more hours to complete a given unit of work than it would have done without the intervening cause, this is a compensable loss in terms of labor productivity. Harmon lists the following as the top seven factors that contribute to construction project labor productivity losses:
On a construction project, adverse weather is a significant contributor to productivity losses. The circumstances in which the contractor is entitled to additional time for “unusually severe weather” and the kind of evidence that may be required to submit a claim will typically be discussed in the contract between the parties. Days when the contractor experiences severe weather and days when owner delays push the project schedule into weather conditions that affect performance, which may result in lost productivity.
Work done out of sequence
When the contractor’s anticipated performance or work sequence method is altered, the contractor may be entitled to additional compensation. A contractor’s productivity may suffer as a result of having to work around an unanticipated event when it must alter its work plan due to owner interference or delays.
Trades are stacked and crowded
A contractor may be impacted by multiple trade contractors working in an area that was not anticipated, just like out-of-sequence work. Courts have recognized a mechanical subcontractor’s loss of efficiency when the general contractor accelerated the work, resulting in overcrowding on the project, increased man-hours, and the unavailability of materials. Trade stacking and crowding can have a significant impact on labor productivity.
Harmon says that scheduled overtime work can cause fatigue and more absenteeism, hurting productivity. The underlying cause must also be compensable for these effects to be recoverable.
Restricted access to the site
Restricted site access can also significantly impact labor productivity because the contractor is typically entitled to control its means and methods of performance. This may include the anticipated use of particular laydown areas and actual site access.