scope:

PURPOSE AND USE OF THIS STANDARD

The success of any design or construction project is determined by various factors, including those related to cost, schedule, and quality. A project's final cost compared to its expected cost is a key metric for owners, designers, and contractors.

Total project cost is composed of subcosts including

• Labor,

• Materials,

• Construction equipment,

• Subcontractors,

• Design, and

• Overhead.

The cost of labor is typically the component with the greatest variability, and it is determined by a combination of factors including

• Work scope definition,

• Quantities,

• Design,

• Crew composition,

• Hourly crew costs, and

• Crew productivity.

Because labor is such a significant portion of overall project costs, a loss of productivity typically results in a significant amount of increased costs and reduced contractor profit. The purpose and use of this standard is to help prevent, minimize, and resolve disputes over identifying, quantifying, and proving the loss of productivity on a project.

The term productivity is most often presented in this standard in the context of construction craft workers. However, the concepts and principles presented herein are also applicable to the productivity of designers, subcontractors, fabricators, construction equipment, and managers.

Productivity can vary from the level anticipated in the budget because actual factors encountered on the project may differ from factors anticipated at the time of bid for any number of reasons. These disruptive factors may include

• Schedule delay,

• Acceleration,

• Differing site conditions,

• Out-of-sequence work,

• Labor availability,

• Stacking of trades,

• Excessive overtime,

• Seasonal and weather conditions,

• Design changes,

• Cumulative impact of multiple changes,

• Poor project management,

• Diluted supervision, and

• Other causes.

Recovering additional costs arising from loss of productivity depends on the contract terms and risk-shifting provisions of the contract, along with the course of conduct between the parties during the project. A more comprehensive discussion of these and other causes of loss of productivity and steps that should be taken is presented in subsequent sections of this standard.

Given its importance, proactively identifying processes and metrics to accurately measure productivity and compare it to expectations is prudent. All too often, however, productivity is neither properly nor timely measured nor communicated to project stakeholders.

As a result, loss of productivity is often not recognized or discussed until late in a project when budgets and schedules are exceeded and there is a reduced opportunity to take corrective measures to mitigate and resolve problems. In many cases, the project data metrics, negative trends, and warning signs were present but were not understood or acted on. Identifying the causes of loss of productivity is challenging if those measurements and discussions did not occur during the project. It is also challenging to identify causal factors if the project participants are no longer available to assist in reconstructing the project history. Disagreements over the quantification, cause, and liability for productivity loss may become contentious during the project and result in legal disputes and lawsuits.

For these reasons, there is a need to establish processes and standards by which the causes and resultant loss of productivity can be identified, captured, documented, quantified, and supported. This standard presents such guidelines. These guidelines should, however, be viewed in the context of the industry sector, project delivery method, contract requirements and size, schedule, sophistication and normal practice of the parties, their behavior during the project, and other project-specific factors. Because one size does not fill all cases, they are advisory, not mandatory.

As stated, the purpose of this standard is to help minimize and resolve disputes over identifying, quantifying, and proving the loss of productivity on a project. The intended readership is attorneys, consultants, contractors, designers, educators, owners, researchers, and other project participants interested in the basics of identifying, quantifying, and proving loss of productivity from a construction and project management perspective. The associated contractual, legal, and accounting issues are complex, and this standard touches only lightly on those aspects from a project management perspective.