Speakers:      

       

Partner, Collins Collins Muir & Stewart, LLP      

       

Dispute & Construction Claims Consultant, ARCADIS      

       

Loss of Productivity Claims: Coming to the Construction Owner's Defense      

 

Lost productivity claims are common on construction projects. Contractors bid fix priced contracts assuming a set level of productivity. Projects, however, rarely proceed according to plan. Instead, unwanted events typically occur causing work to be performed out-of-sequence or accelerated, trades may stack, overtime and double shifts ensue, supervision becomes diluted, delays occur, material sourcing problematic, and morale drops. As labor productivity suffers, project costs escalate. Although courts have accepted the legitimacy of lost productivity claims, proving and estimating costs is not so simple. In general, owners have a certain level of distrust when confronted with such claims. Timely resolutions rarely occur, and costly disputes often follow.      

 

During this presentation, we will look at common contractual terms and provisions in construction agreements and (1) Discuss the methods of proving lost productivity accepted in the industry; (2) Assess the defenses that project owners may avail themselves; (3) Evaluate how lost productivity claims may be averted or at least minimized; (4) Reference AACE's Recommended Practice No. 25R-03 "Estimating Lost Labor Productivity in Construction Claims"; and (5) Discuss how a real life, six-million dollar claim for lost productivity was mutually resolved.