Productivity Loss

In construction disputes, productivity loss refers to a decrease in the efficiency of a contractor’s work, leading to increased costs and delays. This decrease can be caused by various factors, such as:

• Disruptions: Delays or interruptions in the work schedule caused by the owner, architect, or other contractors. Examples include design changes, late material deliveries, or unforeseen site conditions.
• Changes: Modifications to the original construction plans that require the contractor to adjust their methods or schedule.
• Defective materials or workmanship: Faulty materials or poorly performed work that necessitates rework or repairs.
• Inefficient coordination: Poor communication or collaboration between parties involved in the project, leading to confusion, delays, and wasted effort.

When a contractor suffers productivity loss, they may seek damages from the responsible party. To successfully claim damages, the contractor must prove that Productivity loss actually occurred. This involves demonstrating a decrease in output compared to the planned or expected levels. The contractor must also prove that the loss was caused by the other party: The contractor must establish a clear link between the other party’s actions or omissions and the productivity decline. Also, the contractor must prove the loss is quantifiable. The contractor must calculate the financial impact of the productivity loss, typically through expert testimony or specialized methods like the “measured mile” technique.