Baseline Determination in Construction Labor Productivity-Loss Claims

Various ways of quantifying damages have been applied to productivity loss claims in construction. All of the ways attempt to be as objective as possible based on the extent of information available in a particular case. The measured mile, a widely accepted method, is employed when an unimpacted baseline period of production can be identified. Although that approach is considered to be the most objective method available in such cases, the method is limited and does not directly account for variation in individual productivity values about a normal or natural level of productivity. A gap exists between the use of existing methods and the availability of an appropriate methodology that specifically addresses variation in productivity. The key lies in the way baseline productivity is measured, which is inherently statistical, yet no truly statistical methods are used to establish such a baseline. Using the measured mile as a backdrop, this article provides an objective, measurement-based approach that can be used to establish a productivity baseline applied to construction productivity loss claims, based on the application of statistical methods aided by a process control chart. The focus is on providing the basic principles and concepts underlying the approach presented.