Causes of Lost Productivity Claims

It is acknowledged within the construction industry that demonstrating a loss of productivity on a project is one of the most difficult heads of claim to properly articulate. All too often the claim submitted is global or theoretical in nature with minimal factual basis. The purpose of this article is to identify the typical reasons why loss of productivity may occur on site. By identifying such causes early in an ongoing project it may be possible to gather sufficient factual data as the project progresses such that a fully substantiated claim can be submitted.

Productivity equals output over input, or in simpler terms: the measurement of the quantity of work achieved in the number of man-hours taken. Therefore, if more man-hours than planned are taken to complete a specific quantity of work this may suggest that a loss of productivity has occurred. This may seem very straightforward but without being able to identify the causes for such a loss any subsequent claim will be inadequately substantiated.

The first issue to clarify is whether the loss of productivity was due to the contractor. There are several ‘self inflicted’ causes that this can be attributed to. Productivity will suffer if there is not sufficient supervision to manage the labour force. If workers are not totally clear as to what they should be doing then man-hours will be lost. This is also the case if workers are not totally clear as to ‘where’ they should be working i.e. arriving at the wrong workface and having to relocate. Such issues can be easily avoided with sufficient supervision. If the workforce is larger than planned then congestion at the workface may occur resulting in either poor quality work that again requires revisiting or simply workers not having sufficient work to keep them occupied resulting in more man-hours than planned being expended. Other ‘self inflicted’ issues that may affect productivity include not having sufficient or reliable equipment to carry out the works or not having sufficient materials delivered to the workface in a timely manner, all of which can be easily resolved if managed correctly.

There are many issues affecting productivity that are potentially outside the control of the contractor. Where these arise it is important that such issues are identified as early as possible so that their effect can be clearly documented, submitted and possibly resolved to the benefit of the project as a whole. Any change to the contractor's planned sequence of working will affect productivity and should be relatively easy to record. If the contractor is spending a large part of the working day or week relocating its workforce, materials and equipment due to changed employer requirements then the time taken should be accurately documented to form a contemporaneous record of the event. Similarly, if for reasons outside its control, ‘trade stacking’ occurs i.e. a trade contractor is required to work alongside other trade contractors that did not form part of its original plan then a loss of productivity due to congestion is likely to occur. Again, accurate records must be kept of the effect of such an issue. Furthermore, if a workforce is required to work longer hours than planned then productivity will suffer due to fatigue. It is also widely accepted in the industry that productivity achieved on a nightshift can be as low as 40% of that achieved during normal working hours. This needs to be understood if such a shift is introduced. Finally, weather will obviously affect productivity either on a day-to-day basis or more seriously, if entire elements of external based works, planned to be undertaken in the summer are in fact required to be undertaken in the winter then it is probable that more man-hours than planned will be expended to complete the same quantity of works. All of these issues need to be clearly recorded.

In summary, a loss of productivity can be successfully demonstrated and claimed if the causes are clearly identified and the effect accurately recorded. Once a party moves away from both these bases for analysis and starts to rely on theoretical or global data then the chances of recovering the loss suffered will diminish.