Union and Open Shop Labor Cost Differences

One area within the construction industry that has dramatically changed is the growth of open shop construction. This growth suggests that open shop general contractors may have a competitive advantage over union general contractors. This paper investigates productivity and wage rate variances between Colorado open shop and union general contractors on projects completed since January 1981. Though there is little productivity variance, a significant variance of wage rates indicate the Colorado open shop general contractor presently has a clear overall labor advantage. The productivity and wage rate variance of 29 individual project job tasks were investigated. Data was collected from 35 union and 20 open shop contractors' project labor costs reports. Additional information was collected during interviews with representatives of eleven general contractors. The productivity and wage rate variances are described by individual job tasks; by the union craft jurisdictions of laborers, carpenters, ironworkers, and cement finishers; and by an overall comparison between open shop and union general contractors.     

Labor Productivity Drivers and Opportunities in the Construction Industry

The study of labor productivity in the construction industry is gaining increasing attention as the industry faces multiple problems related to its workforce. This paper presents the results of a survey instrument applied to determine the relative level of relevance of construction labor productivity drivers and opportunities. Owners, general contractors, electrical contractors, mechanical contractors, consultants, and others participated in this survey. Management skills and manpower issues were identified as the two areas with the greatest potential to affect productivity according to survey respondents. Surprisingly, external factors, which are often cited as a major cause for reduced productivity in the construction industry, were considered to be one of the least relevant productivity drivers. These results suggest that respondents consider the improvement of labor productivity within their reach and control rather than determined by external conditions.     

Role of the Fabricator in Labor Productivity

This paper describes the results of three case studies in which the subcontractor-fabricator relations had a significant negative effect on labor productivity of the subcontractor. Late vendor deliveries, fabrication or construction errors, and out-of-sequence deliveries plagued each of the three projects. On two projects, there were work stoppages because there were no materials. Unsequenced deliveries caused unnecessary crane movements and rework. On the third project, the output of the fabrication shop was not compatible with the output of the erection crew. The baseline productivity was calculated, and the loss of labor efficiency in each case was estimated to be 16.6, 28.4, and 56.8%. These percentages were compared with similar percentages calculated from other published articles that described inefficient site storage conditions and delivery methods. The labor inefficiencies caused by material management range from a low of 5.4% to a high of 56.8%. The schedule slippage on the three case study projects was estimated to be between 50 and 129%.     

Reducing Variability to Improve Performance as a Lean Construction Principle

Variability is common on construction projects and must be managed effectively. New management thinking, like that of lean production, has suggested that better labor and cost performance can be achieved by reducing output variability. Efforts to utilize lean thinking in construction, so far, have generated limited evidence to support this claim. This paper investigates the relationship between variability and project performance to test the notion that reducing output variability will result in improved labor performance. Using productivity data from concrete formwork activities on multiple projects, various measures of output variability are tested against construction performance. It is shown that variability in output is inevitable and that there is little correlation between output variability and project performance, but that variability in labor productivity is closely correlated to project performance. It is concluded that lean improvement initiatives should be redirected to adaptable workforce management capabilities to reduce variability in labor productivity instead of output in order to improve project performance.     

Strategies for Planned Project Acceleration

Departments of transportation in the United States are under increasing pressure to accelerate projects to meet user-defined constraints and reduce the inconvenience to the traveling public. Although there is information about acceleration projects in other industries, there has been little specifically aimed at highway projects. A domestic scan sponsored by the National Cooperative Highway Research Program was tasked with providing information in this area. The objective of this paper is to synthesize the resulting information into fundamentals that support successful planned accelerated highway project delivery. Case studies of how departments of transportation successfully accelerated the construction of four very different projects in California, Florida, and Texas serve as the basis for identifying these fundamentals. The fundamentals include upfront and detailed planning, designs that facilitate accelerated construction, a collaborative environment for project stakeholders, and incentives and disincentives to motivate construction contractors.     

Improving Labor Flow Reliability for Better Productivity as Lean Construction Principle

New management thinking, like that of lean production, has suggested that better labor and cost performance can be achieved by improving the reliability of flows. In this context, lean thinking portrays reliable flows as the timely availability of resources, i.e., materials, information, and equipment. Little attention has been given to labor as a flow. Further, little discussion can be found related to flexible capacity management strategies. Efforts to utilize lean thinking in construction, so far, have generated limited evidence to support the need for more reliable labor flows. This paper investigates the lean principle that more reliable flows lead to better labor performance. Actual data from three bridge construction projects are examined to document the instances of poor flow (resource) reliability and its effect on labor performance. Inefficient labor hours are calculated. The results show that there is strong support that more reliable material, information, and equipment availability contributes to better performance. However, the projects showed considerable deficiencies in the utilization of the labor resource. It is concluded that lean improvement initiatives should focus more on workforce management strategies to improve labor utilization that will lead to better labor performance.     

Impact of Change Orders on Labor Efficiency for Mechanical Construction

Change orders have become an everyday occurrence in construction. It is widely accepted by both owners and contractors that change orders have an effect on the labor efficiency, but these effects are difficult to quantify and frequently lead to disputes. Data from 61 mechanical construction projects were collected to develop a statistical model that estimates the actual amount of labor efficiency lost due to the change orders. The input variables needed in the model are as follows: (1) The original estimated labor hours; (2) impact classification; (3) total estimated change hours; (4) number of change orders; and (5) the timing of changes. The results of this study show that impacted projects have a larger decrease in labor efficiency than unimpacted projects. Additionally, the later a change order occurs in the life of a project the more impact it will have on the labor efficiency. The results appear to be consistent with the intuition of experienced professionals. Although each project has unique characteristics, the resultant model provides owners and contractors with a baseline measure of lost labor efficiency.     

Contractor’s Opportunistic Bidding Behavior and Equilibrium Price Level in the Construction Market

The competitive bidding system has been to blame for abnormally low bids, which are considered as one of the main causes of poor project quality. Previous studies have regarded the pricing of bidders as an optimum decision based on contractor’s cost and market competition level. However, the sell to produce characteristic of construction projects may induce contractors to offer a low bid and then make up the amount initially sacrificed from beyond-contractual reward (BCR) gained through cutting corners and claims. System dynamics was adopted in this study to develop a contractor’s pricing model with consideration of the dimensions of cost, market competition, and BCR. The model was then examined by statistical analysis of data collected from 44 highway projects in Taiwan. It was found that the equilibrium market price is significantly associated with BCR, which is assumed to be determined by the strictness of the owner’s construction management, including both soundness of contract and tightness in construction supervision. Research results suggest that contractors divide the market into different segments according to the owner’s strictness of construction management and the equilibrium price level of each market segment varies. The price level for projects with a strict owner is remarkably higher than for those with relatively less strict owners. Improvement in the construction management system of projects is crucial to lower the possibility that contractors gain BCR and do opportunistic bidding, and to further enhance project quality.     

Study of Factors Influencing the Efficient Management and Downtime Consequences of Highway Construction Equipment in Thailand

Downtime resulting from machine breakdown invariably has a considerable impact on the performance of construction projects and companies as a whole, especially to contractors with heavy investment in equipment. Attempts to investigate the causes and consequences of downtime are rarely found. The aim of this paper is to characterize and quantify factors that influence downtime consequences (consequential problems resulting from downtime) of highway construction equipment based on the structural equation modeling (SEM) approach. A questionnaire survey was conducted to collect data on equipment management practices and downtime consequences among highway contractors in Thailand. The SEM model proposed is of value for both researchers and practitioners to facilitate a better understanding of the relationships among acquisition condition, operational practice, maintenance quality, disposal practice, and downtime consequence of heavy equipment. The model also helps contractors to manage equipment more efficiently by concentrating on several practices that can convey the greatest benefit in minimizing downtime consequences at each particular stage of a machine’s life cycle, rather than considering all practices simultaneously where the benefits gained are perhaps not proportional to the effort.     

Quantifying the Impact of Schedule Compression on Labor Productivity for Mechanical and Sheet Metal Contractor

In a typical construction project, a contractor may often find that the time originally allotted to perform the work has been severely reduced. The reduction of time available to complete a project is commonly known throughout the construction industry as schedule compression. Schedule compression negatively impacts labor productivity and consequently becomes a source of dispute between owners and contractors. This paper examines how schedule compression affects construction labor productivity and provides a model quantifying the impact of schedule compression on labor productivity based on data collected from 66 mechanical and 37 sheet metal projects across the United States. The model can be used in a proactive manner to reduce productivity losses by managing the factors affecting productivity under the situation of schedule compression. Another useful application of the model is its use as a litigation avoidance tool after the completion of a project.     

Contractor Prebid Planning Principles

Planning is an essential function of project management. Yet, many small- and medium-sized contractors do a relatively poor job of operational planning. Better prebid plans will reduce costs, shorten schedules, and improve labor productivity. Unfortunately, the published literature offers little guidance for smaller contractors on what constitutes effective planning. Most papers describe planning as a macrolevel process for owners. Most emphasize scope definition for industrial projects. This paper describes a microlevel planning process for contractors. It consists of eight steps which are: (1) assess contract risks; (2) develop a preliminary execution plan; (3) develop site layout plans; (4) identify the sequences that are essential-to-success; (5) develop detailed operational plans; (6) develop proactive strategies to assure construction input into design; (7) revise the preliminary plan; and (8) communicate and enforce the plan. The entire process is illustrated with a case study project and is fully illustrated with figures which show how to integrate the work of multiple contractors, keep key resources (crews or equipment) fully engaged with no downtime, provide time buffers so the work of follow on crews can be efficiently done, expedite the schedule using multiple work stations and concurrent work, ways to communicate the work plan to the superintendent and foremen, and how to assess the feasibility of various work methods. The steps are easy to understand and implement. They will yield immediate positive results.     

Impact of Overmanning on Mechanical and Sheet Metal Labor Productivity

This paper details the impacts of overmanning on labor productivity for labor-intensive trades, namely mechanical and sheet metal contractors. Overmanning, as used in the following research, is defined as an increase of the peak number of workers of the same trade over the actual average manpower used throughout the project. The paper begins by reviewing literature on the effects of overmanning on labor productivity. Via a survey to various contractors, data were collected from 54 mechanical and sheet metal projects located across the United States. Various statistical analysis techniques are then performed to determine quantitative relationship between overmanning and labor productivity. These techniques include the stepwise method, T-test, P-value tests, analysis of variance, and multiple regression analysis. The results indicate a 0–41% loss of productivity depending on the level of overmanning and the peak project manpower. Cross-validation is performed to validate the final model. Finally, a case study is provided to demonstrate the application of the model.     

Assignment and Allocation Optimization of Partially Multiskilled Workforce

Multiskilling is a workforce strategy that has been shown to reduce indirect labor costs, improve productivity, and reduce turnover. A multiskilled workforce is one in which the workers possess a range of skills that allow them to participate in more than one work process. In practice, they may work across craft boundaries. The success of multiskilling greatly relies on the foreman’s ability to assign workers to appropriate tasks and to compose crews effectively. The foreman assigns tasks to workers according to their knowledge, capabilities, and experience on former projects. This research investigated the mechanics of allocating a multiskilled workforce and developed a linear programming model to help optimize the multiskilled workforce assignment and allocation process in a construction project, or between the projects of one company. It is concluded that the model will be most useful in conditions where full employment does not exist; however, it is also useful for short term allocation decisions. By running the model for various simulated scenarios, additional observations were made. For example, it is concluded that, for a capital project, the benefits of multiskilling are marginal beyond approximately a 20% concentration of multiskilled workers in a project workforce. Benefits to workers themselves become marginal after acquiring competency in two or three crafts. These observations have been confirmed by field experience. Extension of this model to allocation of multifunctional resources, such as construction equipment, should also be possible.     

U.S. Construction Labor Productivity Trends, 1970–1998

Construction productivity trends carry immense consequences for the economy as a whole. However, there is little scholarly consensus concerning even the direction of such trends. The main objectives of this paper are to (1) present an approach to studying long-term productivity trends in the U.S. construction industry; and (2) provide a preliminary indication of such trends over the past 25–30 years. Subsequent, extended statistical studies are suggested that may be based on the approach of the selected work presented here. Labor cost and output productivity trends are tracked for tasks that represent different trades and differing levels of technological intensity within the building construction sector. Specific tasks dealt with a range from a zero technology impact task, such as hand trenching, to compaction with a sheepsfoot roller. Means's cost manuals were used to trace the benchmark values for these tasks. These values reflect productivity trends. Unit labor costs in constant dollars and daily output factors were compared over decades for each task. Direct work rate data from 72 projects in Austin, Tex., over the last 25 years were also examined. Increasing the direct work rate usually increases construction productivity. The combined data indicate that productivity has increased in the 1980s and 1990s. Depressed real wages and technological advances appear to be the two biggest reasons for this increase. The data also indicate that management practices were not a leading contributor to construction productivity changes over time. Subsequent studies are required to add weight to these observations and can be based on the approach presented here.     

Impact of Change Orders on Small Labor-Intensive Projects

In today’s construction, small projects can be just as important if not more important than the larger projects. However, small projects are usually fast track projects, which often involve overlapping design and construction time. Subsequent modifications may be required for the sections that are already under construction. These disruptions to the ongoing project are labeled as change orders. The impact due to changes has been described as the adverse effect upon the unchanged work due to changes in the contract. For this study, 34 projects were selected to develop a statistical model that estimates the amount of labor efficiency lost due to change orders for small projects. The variables in the final model are percent design related changes, percent owner initiated changes, the ratio of actual peak labor to estimated peak labor, the ratio of actual project duration to estimated project duration, and project manager’s percent time on the project. The results of this paper are of value to owners, electrical and mechanical contractors, and construction managers. The model quantifies the impact of change orders by introducing the most important variables that bring the largest disruptions.     

Cumulative Effect of Project Changes for Electrical and Mechanical Construction

Change is inevitable on construction projects, primarily because of the uniqueness of each project and the limited resources of time and money that can be spent on planning, executing, and delivering the project. Change clauses, which authorize the owner to alter work performed by the contractor, are included in most construction contracts and provide a mechanism for equitable adjustment to the contract price and duration. Even so, owners and contractors do not always agree on the adjusted contract price or the time it will take to incorporate the change. What is needed is a method to quantify the impact that the adjustments required by the change will have on the changed and unchanged work. Owners and our legal system recognize that contractors have a right to an adjustment in contract price for owner changes, including the cost associated with materials, labor, lost profit, and increased overhead due to changes. However, the actions of a contractor can impact a project just as easily as those of an owner. A more complex issue is that of determining the cumulative impact that single or multiple change orders may have over the life of a project. This paper presents a method to quantify the cumulative impact on labor productivity for mechanical and electrical construction resulting from changes in the project. Statistical hypothesis testing and correlation analysis were made to identify factors that affect productivity loss resulting from change orders. A multiple regression model was developed to estimate the cumulative impact of change orders. The model includes six significant factors, namely: Percent change, change order processing time, overmanning, percentage of time the project manager spent on the project, percentage of the changes initiated by the owner, and whether the contractor tracks productivity or not. Sensitivity analysis was performed on the model to study the impact of one factor on the productivity loss (%delta). The model can be used proactively to determine the impacts that management decisions will have on the overall project productivity. They may also be used at the conclusion of the project as a dispute resolution tool. It should be noted that every project is unique, so these tools need to be applied with caution.     

Computer Simulation Model: Construction Analysis for Pavement Rehabilitation Strategies

Most state highways in the United States were built during the 1960s and 1970s with an infrastructure investment of more than $1 trillion. They now exceed their 20?year design lives and are seriously deteriorated. The consequences are high maintenance and road user costs because of degraded road surfaces and construction work zone delays. Efficient planning of highway rehabilitation closures is critical. This paper presents a simulation model, Construction Analysis for Pavement Rehabilitation Strategies (CA4PRS), which estimates the maximum amount of highway rehabilitation/reconstruction during various closure timeframes. The model balances project constraints such as scheduling interfaces, pavement materials and design, contractor logistics and resources, and traffic operations. It has been successfully used on several urban freeway rehabilitation projects with high traffic volume, including projects on I-10 and I-710. The CA4PRS helps agencies and contractors plan highway rehabilitation strategies by taking into account long-life pavement performance, construction productivity, traffic delay, and total cost.     

Differences in Perspectives regarding Labor Productivity between Spanish- and English-Speaking Craft Workers

The influx of Hispanic workers helped the U.S. construction industry alleviate its shortage of craft workers in the last decade. In 2009, Hispanics accounted for nearly a quarter (22.5%) of the construction workforce in the United States. However, no research has been conducted to examine how various factors influence Hispanic craft workers’ productivity. This paper analyzes the data from a nationwide survey to obtain craft workers’ perspective on construction productivity. The respondents were categorized as Spanish- or English-speaking workers according to their declared primary language, irrespective of their ethnic background. The findings reveal that Spanish- and English-speaking craft workers generally agreed on the priority of the factors affecting labor productivity. However, Spanish-speaking workers rated factors associated with supervisor direction, safety, and labor more severely than English-speaking craft workers. Meanwhile, English-speaking craft workers perceived factors related to engineering drawing management as being more detrimental to productivity than did Spanish-speaking craft workers. Specifically, in comparison with English-speaking craft workers, Spanish-speaking craft workers experienced more severe issues with communicating with their supervisors, pay and monetary bonus for good performance, and lack of training on safety, health, and skills. These findings should be valuable for project management to effectively improve labor productivity of their Spanish-speaking craft workforce.     

Factors Affecting Absenteeism in Electrical Construction

Construction contractors continue to be faced with the challenge of improving productivity in order to remain successful in an increasingly competitive industry. One factor that contributes to lower productivity is absenteeism. Yet, little is known or understood about the reasons electricians miss work, and very few studies have been conducted on absenteeism in the construction industry. As a positive step to reduce the problems associated with voluntary and involuntary absences, a study was initiated to identify why workers miss work and what steps should be taken to minimize absenteeism. The main objectives of the study were to learn the reasons for absenteeism and to quantify the impacts so that solutions can be developed to help contractors improve their productivity. The study determined that managers and electricians agreed that illnesses and medical appointments were two common reasons workers missed work. However, managers also believed workers were absent because of a lack of interest or irresponsibility, while electricians reported injuries and unsafe working conditions as reasons for missing work. Furthermore, a quantitative analysis of the data revealed that when the absenteeism rate was between 0 and 5%, there was no loss in productivity. However, when the absenteeism rate was between 6 and 10%, a 24.4% loss in productivity was experienced. By understanding what causes electricians to miss work, and the effect of absences on productivity, a company can manage and control absenteeism on electrical construction projects.     

Schedule Acceleration, Work Flow, and Labor Productivity

This paper details how construction labor efficiency is affected by deviations from the normal flow of work. A methodology is presented to estimate the loss of labor efficiency, based on variations in the percentage of labor hours used each week. The procedure can be used without the need for contractor production records. The theoretical basis for the method rests on the assumption that the rate of manpower utilization is consistent with the amount of work available for the contractor to perform. Using productivity data from three electrical projects that were accelerated, the labor efficiency is shown to be correlated to changes in the percentages of weekly work hours. Loss of efficiency curves are developed for various project phases. A case study is presented of an actual electrical construction project. Losses of efficiency are calculated for each phase, and it is shown that the contractor incurred an estimated loss of productivity of 25%. The analysis is validated by comparing a weekly inefficient work-hour profile to the chronology of events that occurred on the project.