Demonstrating lost productivity with the measured mile: Legal Desk, February 2021
By Dan Leduc
By Dan Leduc
February 26, 2021 – Many subcontractors have experienced a variety of negative impacts arising out of the pandemic, which could lead to delay claims or lost productivity claims—the two of which are quite different from each other.
Delay claims largely focus on time impact and schedule analysis, measuring cause of effect on slippages from a baseline schedule to any as-built schedule, and actual completion dates of the activities identified in the schedules.
Productivity claims focus more on the sub’s own labour records, starting with its estimate, and moving through its costing records for labour hours used, plus the impact of certain events on the sub’s execution plan and its actual experiences.
A White Paper* recently published by several trade associations (including the National Electrical Contractors Association) outlines two methodologies for demonstrating lost productivity: measured mile and Ibbs Study.
I prefer the measured mile. It is a means by which you compare productivity on one portion of a project or similar project where there was no impact (a control) against a portion where an impact was experienced. The White Paper explains:
As mentioned, the rule is reasonable similarity. Thus, if the activity code in the example on page 4 is described as “Feeder Conduit 2 in. to 6 in.”, the comparison could include conduits of various sizes. The reported decisions at the major boards of contract appeals evaluate material types, jointing methods […] and other factors that need to be reasonably similar between the less-impacted and the impacted areas or time frames.
The measured mile comparisons between the less-impacted and impacted project areas or time frames are used to compute the should have spent labour hours in the impacted areas. If the claimant measures a production rate of n number of labour hours to install a known quantity of material in the less-impacted area or time frame, that productivity factor can be applied to the take-off of similar conduit in the impacted area or time frame.
As claimant, you would then subtract the should have spent labour hours from the actual hours expended to solve for the inefficient hours. Actual productivity factor to install EMT in the less impacted area or time frame:
The White Paper, unfortunately, falls short on detailing the requirements you need to meet to make the measured mile useful.
Namely, your labour records need to be extremely detailed, identifying where each electrician was working at almost each hour of each day, or at least on what scope, geographically (e.g. 2nd floor) and by discipline (e.g. roughing in) that specific worker is performing. Being able to compare those records against your bid take-off makes the measured mile available to you.
NOTES: “Project-specific loss of productivity analysis methodologies,” William Ibbs, Ph.D., and Paul L. Stynchcomb (Ibbs Consulting Group), January 2021.
Dan Leduc is a partner in the law firm of Norton Rose Fulbright LLP, and practices exclusively in the area of construction law. He is always happy to take on new clients from anywhere in Canada. Contact Dan at email@example.com.