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25R-03: Estimating Lost Labor Productivity in Construction Claims

25R-03: Estimating Lost Labor Productivity in Construction Claims
AACE International, April 13, 2004

Price: $0 (Member) / $100 (Non-Member)

This recommended practice focuses on identification of various methods for estimating lost labor productivity in construction claims. Often the claim is the result of one or more change order requests that cannot be fully resolved to capture their full and final effect on the entire project cost and schedule. Specifically, this Recommended Practice examines the issue in terms of claims for cost recovery of lost productivity. Therefore, the purpose of the Recommended Practice is to:
- Identify Lost Productivity Estimating Methodologies: That is, survey as many of the various methodologies employed in litigation throughout North America as can be identified;

- Rank Order the Methodologies: That is, based on reliability, professional acceptance, case law and construction claims literature, rank the identified methodologies from most to least reliable with respect to documenting estimating damages in claim situations. While it may not be possible to state with certainty which methods are absolutely most or least reliable, it can be stated that under certain sets of circumstances some methods are generally considered more reliable than others. (CAUTION: This Recommended Practice was prepared on the basis of the author’s understanding of Canadian and U.S. case law. It is recommended that anyone preparing a lost productivity claim seek appropriate legal advice on the methodology to be used. This is especially true if the claim is being pursued under national law other than Canada or the United States.)

- Define and Discuss Each Methodology: That is, discuss the method and how it is employed. Also, when possible, discuss the strong and weak points of each method

- Identify Selected Studies Applicable to Each Methodology: Herein, identify as many studies and professional or technical papers as possible which will help the practitioner in learning more about and/or employing a particular method. It needs to be noted that this Recommended Practice does not define in detail how one should properly perform the various analytical methods identified herein. The Recommended Practice gives a brief description of each method only in an effort to help claimants properly identify the method. That is, different claimants may have differing nomenclature for the same methodology. In this case, the brief description of each method is intended to help overcome this situation.

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