Productivity loss,
Is defined as a contractor output less than its planned output per work hour of input.
The result is a loss of money for a contractor.
Therefore, a challenging aspect of construction cost control is measuring and tracking work hours and production in sufficient detail to allow analysis of the data in order to determine the root causes of poor labor productivity, should it occur.
Known to field project management staff, that the field crews are not completing work activities as planned, and project schedule, costs and cash flow are suffering as a result.
There is no way to measure productivity contemporaneously. Thus, productivity losses can be difficult to prove with the degree of certainty demanded by many owners.
Lost productivity is, all too often, calculated at the end of a project during preparation of a claim or request for equitable adjustment.
Complicating the issue even more, there are myriad ways to calculate lost productivity.
There is no common agreement amongst cost professionals as to how such lost hours should be calculated.
There is general agreement among cost professionals that a comparison to unimpacted work on the project is generally preferred when there is sufficient data available.
Finally, once lost productivity is calculated, it is still difficult to establish causation.
Contractors tend to blame such losses on owners and ask to be compensated.
Owners, on the other hand, often blame a bad bid or poor project management and thus deny additional compensation for lost productivity.
Given this situation, the root cause of lost productivity is frequently a matter in dispute between owners, contractors and subcontractors.