By: Daniel M. Drewry
Lost productivity directly impacts a contractor’s bottom line and is a common claim component, but it is extremely difficult to measure. Last week in this blog we looked at learning curves and how they can lead to labor inefficiencies. This week we will focus on how lost productivity is measured. While there are a variety of approaches utilized by claimants in an effort to capture lost productivity (each of which would justify a lengthy discussion of its own), the Measured Mile is the most preferred approach of quantifying it, and is particularly useful with construction where productivity is linked to identifiable units of work per day, such as with underground utility work.
Stated succinctly, the Measured Mile approach compares the productivity of the same activity during un-impacted and impacted periods of the project to determine the productivity loss caused by the impacted period. One advantage of this method is that it utilizes only actual productivity as opposed to the estimated productivity heading into the job, avoiding disputes over the accuracy of the contractor’s original estimate or bid. However, the impacted and un-impacted periods must be substantially similar and the quantity of the work, weather and other factors can all impact the similarity analysis. For the contractor, the daily report is an essential tool for tracking daily unit installation of material, job conditions, labor and equipment for use in a Measured Mile.