Preparing and Presenting Loss of Labor Productivity Claims: Analysis of the Methodologies with Two Exemplars

AuthorBy Paul L. Stynchcomb, C. William Ibbs, and James R. Newland
Published in The Construction Lawyer, Volume 40, Number 3 Summer2020. © 2020 American Bar Association. Reproduced with permission. All rights reserved. This information or any portion
thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
Preparing and Presenting Loss of Labor
Productivity Claims: Analysis of the Methodologies
with Two Exemplars
By Paul L. Stynchcomb, C. William Ibbs, and James R. Newland
Paul L. Stynchcomb, CCM, PSP, CFCC, is a principal
with Vero Construction Consultants Corp. in Vero Beach,
Florida. C. William Ibbs, Ph.D., is a professor at UC
Berkeley and the founder of The Ibbs Consulting Group in
Penngrove, California. James R. Newland, AIA, is a partner
with the law rm of Seyfarth Shaw in Washington, D.C.
Understanding the
Nature of Loss of Labor
Productivity Claims
It is beyond doubt that losses
of labor productivity exist
in the construction indus-
try. When a party seeks to
recover damages for loss of
labor productivity, proving
that such losses occur is not
the challenge. The challenge
is linking cause and effect
sufcient for the trier of fact
to understand the claim and
make the appropriate determination, whether that trier
of fact is a panel of a board of contract appeals, a judge
on the Court of Federal Claims, a federal or state court
judge, or an arbitrator.
“The fact that proving the amount
of productivity losses is recognized as being notoriously
difcult does not abrogate [claimant’s] fundamental respon
sibility to prove by a preponderance of the evidence that
a Government action caused its labor to be less efcient
than planned and the extent of that impact.”2 There is no
absolute standard methodology for demonstrating a loss
of labor productivity. In fact, in many cases, it is not only
appropriate but also more compelling to use more than
one. This article discusses methodologies for demonstrating
loss of labor productivity and presents two cases in which
the authors were involved as exemplars where the claim-
ants successfully used multiple methods to prove the loss.
Loss of Productivity Claims Arise Normally as
Constructive Changes
From an entitlement perspective, loss of labor productivity
claims almost always arise as constructive changes, and they
almost always are proven through expert analysis and testi-
mony. In Centex Bateson Construction Co., Inc.,3 the VABCA
held that claims for loss of labor productivity under a con-
struction contract are constructive change claims that arise
under the contract changes provisions. A claimant is entitled
to an equitable adjustment computed under the terms of the
contract changes clause.4
Further, in Centex Bateson, the board discussed the nature
of inefciency or impact claims, stating:5
Impact costs are additional costs occurring as a result
of the loss of productivity; loss of productivity is also
termed inefciency. Thus, impact costs are simply
increased labor costs that stem from the disruption to
labor productivity resulting from a change in working
conditions caused by a contract change. Productivity
is inversely proportional to the man-hours necessary
to produce a given unit of product. As is self-evident,
if productivity declines, the number of man-hours
of labor to produce a given task will increase. If the
number of man-hours increases, labor costs obviously
In order to recover for a loss of labor productivity, “the
contractor must show the normal or expected level of
performance and must also show the extent to which
the Government’s action impacted that performance,
reducing labor efciency.”7 Although a well-known phe-
nomenon because they are constructive changes—and
thus not always anticipated or known when they arise—
“[i]t is a rare case where loss of labor productivity can be
proven by books and records.”8
Consequently, loss of labor productivity claims usually
depend on the opinions of expert witnesses. In addition, “[i]
t has also been recognized that loss of labor productivity is
Paul L. Stynchcomb
James R. Newland
C. William Ibbs

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