According to a new white paper co-published by NECA, the Mechanical Contractors Association of America (MCAA), Rockville, Md., and the Sheet Metal and Air Conditioning Contractors’ National Association (SMACNA), Chantilly, Va., there is no question that the ongoing COVID-19 pandemic has impacted the construction industry as a whole. As a result, the three trade associations have collaborated on a white paper titled, “Project-Specific Loss of Productivity Analysis Methodologies.”
The paper is described as a “stand-alone discussion of accepted methodologies for quantifying loss of productivity impacts, irrespective of causality. Loss of productivity impacts can be felt by all trades on a project: when a project schedule is delayed and/or accelerated, when various trades are improperly stacked upon one another, when the continuity and flow of the work activities is disrupted, and when a substantial amount of change is introduced into a construction project.”
The paper’s intent is to provide insights to readers on acceptable methodologies for quantifying loss of productivity due to COVID-19 or other unforeseen causes of project disruption impacting productivity.
The paper notes that loss of productivity is complex because of the myriad of contracts and subcontracts that exist between NECA, MCAA and SMACNA member firms, prime contractors and/or owners. It is also complex because of the multitude of national, state and local government directives and guidelines that are triggered by claims such as COVID-19, governmental orders to start and stop work as essential or non-essential services, specific mandated work protocols to ameliorate the COVID-19 transmission hazard in the workplace, civil unrest or wildfire events, and how they are to be handled.
It is important that, if a contractor is satisfied that it has a contractual or legal right and an avenue of recovery of loss of productivity and/or delay damages, the contractor preparing the Request for Equitable Adjustment (REA) must choose a method to quantify that claim—one that will hold up in a court, a board of contract appeals or an arbitration panel.
The white paper covers four of these methods, in order of preference by these legal bodies. The four methods are:
- The measured mile method
- The MCAA publication and the labor inefficiency factors table
- The Ibbs study method
- The modified total cost (labor hour) approach
The paper goes into each of these in detail.