Quantifying Lost Labor Productivity in Domestic and International Claims

Abstract

One of the most controversial areas in construction claims is the quantification of lost labor productivity. Although labor hours and installed quantities can be tracked, lost productivity is very difficult to track contemporaneously. Furthermore, labor productivity is susceptible to many factors, some of which are within the contractor’s control and some which are not. As a result, entitlement, causation, and credible quantification for loss of productivity claims are difficult to establish and many methods of quantification are subject to challenge with respect to validity and applicability to particular cases. This paper will review the methods to quantify lost labor productivity used in the US construction industry, along with relevant case law, and discuss the practical considerations in selecting the appropriate method for a specific case. This paper will also discuss the challenges that result from different legal and cultural backgrounds and provide caveats when quantifying lost productivity in the context of international claims.