CUMULATIVE IMPACT CLAIMS (LOSS OF PRODUCTIVITY)-PART3

The Mechanical Contractors Association of America (MCAA) publishes an estimating manual that has several appendices dealing with productivity losses. Appendix A of the manual deals with overtime and the effects of working overtime on productivity and cost. Appendix B, titled "Factors affecting productivity", lists 16 factors that can affect productivity, and provides a range for the percentage of loss that can occur for minor, average, and severe applications. The causes and the range of percentages (to be applied against labor costs) set forth in Appendix B are listed below:

                                                 minor             average        severe

1.Stacking of trades                    10%               20%            30%

2.Morale and attitude                    5%               15%            30%

3.Reassignment of manpower        5%               10%            15%

4.Crew size inefficiency               10%               20%            30%

5.Concurrent operations                5%               15%            25%

6.Dilution of supervision               10%               15%            25%

7.Learning curve                            5%               15%            30%

8.Errors and omissions                   1%                 3%              6%

9.Beneficial occupancy                  15%              25%            40%

10.Joint occupancy                         5%               12%            20%

11.Site access                                 5%               12%            30%

12.Logistics                                   10%               25%            50%

13.Fatigue                                       8%               10%            12%

14.Ripple                                       10%               15%            20%

15.Overtime                                   10%               15%            20%

16.Season and weather change       10%               20%            30%      

In reference to the factors listed in Appendix B, the MCAA manual states:

"These factors listed are intended to serve as reference only. Individual cases could prove to be too high or too low. The factors should be tested by your own experience and modified accordingly in your own use of them, since percentages of increased cost due to the factors listed may vary from contractor to contractor, crew to crew, and job to job."

The MCAA factors were developed by MCAA's management methods committee, but are not based on any empirical study determining the specific factors or the percentages of loss associated with the individual factors. Appendix B does not address how to apply these factors in the case where multiple factors occur. If simple arithmetic totals are used, extremely high lost-productivity factors could result even when multiple minor applications occur. The manual does not address whether the factors are to be applied to the entire project, to portions of the project, only to changed work, or only to specific areas. The factors presented appear to be  precisely what the manual states -for "reference only"-and should be used as a starting rather than an ending point for performing productivity analysis and predictions of productivity losses.

But the courts and Boards of contract appeals recognize the MCAA factors as a proper basis upon which to calculate lost labor productivity!