Managing Construction Claims

ManagingConstruction Managing Construction
Claims
Calvey Consulting, LLC
8473 Settlers Passage
Cleveland, OH 44141
440-740-1132
ManagingConstructionClaims Managing Construction Claims
Why are Claims are disputed. Why are Claims are disputed.
What is Typical Claim
What does a Consultant use to develop a What does a Consultant use to develop a
Claim.
What are the Key Components What are the Key Components.
What are Accepted Methods of Analysis
Calvey Consulting, LLC 440-740-1132
h i l i i d Why are Construction Claims Disputed ?
The Issues are complex. The Issues are complex.
The Claims are loosely documented.
Breakdown in communication Breakdown in communication.
There is an honest difference in opinion.
No budget dollars No budget dollars.
What is a Typical Construction
Claim?
Claimant Multi Prime Contractor Claimant Multi Prime Contractor
Money
Time Time
Source of the Dispute Third Party
No Exact Accounting No Exact Accounting
What does a Claims Consultant
use to develop his analysis?
Contract Contract
Project Schedules
Pay Applications Pay Applications
Certified Payrolls
Project Meeting note Project Meeting note
Daily Logs
What are the Key Components of a
Typical Contractors Claim?
The Planned Schedule The Planned Schedule
The Actual Schedule
Predecessor Delay Predecessor Delay
Impact on the Contractor
Quantify the Damages Quantify the Damages
Methods of Delay Analysis
Ti I A l i Time Impact Analysis
Impacted As Planned Impacted As Planned
Adjusted As Built
Windows Windows
Constructive Acceleration
Calculating Damages
Extension of General Conditions Extension of General Conditions
Extension of Home Office Overhead
Escalation Escalation
Loss of Productivity
AACE - Purpose of Recommended
Practice
Identify Lost Productivity Estimating Identify Lost Productivity Estimating
Methodologies
Rank Order the Methodologies g
Define and Discuss Each Methodology
Identify Selected Studies Applicable to Each Identify Selected Studies Applicable to Each
Methodology
Methodsof EstimatingLost Productivity Methods of Estimating Lost Productivity
Project Specific Studies Project Specific Studies
Project Comparison Studies
Specialty Industry Studies Specialty Industry Studies
General Industry Studies
Cost Basis Cost Basis
What isProductivity? What is Productivity?
Productivity = Productivity
Output (units completed)
Input (work or equipment hours) Input (work or equipment hours)
Productivity Factor = Productivity Factor =
Actual Productivity
Baseline or Planned Baseline or Planned
Productivity
CommonCausesof Lost Productivity Common Causes of Lost Productivity
Acceleration (directed or constructive) Acceleration (directed or constructive)
Crowding of labor or stacking of trades
Over manning Over manning
Learning Curve
Excessive overtime Excessive overtime
Adverse or unusually severe weather
Dilution of Supervision Dilution of Supervision
CommonCausesof Lost Productivity Common Causes of Lost Productivity
Changes, ripple impact, cumulative impact of Changes, ripple impact, cumulative impact of
multiple changes and rework
Defective engineering, recycle and/or rework g g, y
Absenteeism and the missing man syndrome
Craft turnover Craft turnover
Material, tools and equipment shortages
Site or work area access restrictions Site or work area access restrictions
Project SpecificStudies Project Specific Studies
Measured Miles Study Measured Miles Study
Earned Value Analysis
Work Sampling Method Work Sampling Method
Craftsmen Questionnaire Sampling Method
H l i i ? How long is it?
MeasuredMile Physical Units Measured Mile Physical Units
Measured Mile
10 Miles of pipe installed 1,000 manhours
100 manhours/mile
Impact
4 Miles of pipe installed 640 manhours
/ 160 manhours/mile
60 manhours/mile 60 manhours/mile
x4 miles
240 manhours
240 manhours
EarnedValueAnalysis Earned Value Analysis
Measured Mile
70% Labor Complete 1,000 manhours
14.3 manhours/1%
Impact
30% Labor Complete 640 manhours
/ % 21.3 manhours/1%
7 manhours/1% 7 manhours/1%
30%
240 manhours
240 manhours
Project SpecificStudies Project Specific Studies
Measured Miles Study Measured Miles Study
Earned Value Analysis
Work Sampling Method Work Sampling Method
Craftsmen Questionnaire Sampling Method
H l i i ? How long is it?
Project ComparisonStudies Project Comparison Studies
Comparable Work Study Comparable Work Study
Comparable Project Study
SpecialtyIndustryStudies Specialty Industry Studies
Acceleration Acceleration
Changes, Cumulative Impact and Rework
Learning Curve Learning Curve
Overtime and Shift Work
Project Characteristics Project Characteristics
Project Management
Weather Weather
SpecialtyIndustryStudies Specialty Industry Studies
Selected Studies Selected Studies
Weather Impact on Productivity Weather Impact on Productivity
Overtime Impact on Productivity
Weather Impact onProductivity Weather Impact on Productivity
120
100
120
60
80
f
f
i
c
i
e
n
c
y
20
40 %

E
f
0
20
-20 -10 0 10 20 30 40 50 60 70 80 90 100
Eff ti T t (F)
Effective Temperature (F)
Weather Impact on Productivity
(NECA Studies)
Temperature (effective) Impact Temperature (effective) Impact
Eff ti T t R F
Efficiency
Effective Temperature Range F
%
+40 to 80 100
-20 to +20 20 95
80 to 100 85 - 60
Weather Impact onProductivity Weather Impact on Productivity
Daily Log Documentation y g
Frequency (AM, Noon, PM)
Temperature
Wind
Precipitation (rain, snow, sleet)
E i H idit Excessive Humidity
Historic Data
National Oceanic &Atmospheric Admin National Oceanic & Atmospheric Admin.
(NOAA) National Climatic Data Center
OvertimeIndustryStudies Overtime Industry Studies
Bureau Labor Statistics 1947 (Mfg.) Bureau Labor Statistics 1947 (Mfg.)
Business Roundtable 1980
10 year study of P&G plant projects 10 year study of P&G plant projects
National Electrical Contractors Assn.
1969 (rev 1989) 1969 (rev. 1989)
Construction Industry Institute 1988
7 projects all crafts 7 projects, all crafts
Cost Engineering Composite - 2004
OvertimeImpact onProductivity Overtime Impact on Productivity
NECA Study
90
100
e
60
70
80
r
o
d
u
c
t
i
v
40
50
60
%

P
r
30
1 2 3 4 5 6 7 8 9 10 11 12
Weeks
Weeks
OvertimeImpact onProductivity Overtime Impact on Productivity
Days hours per day Productivity Range
2 wks to 12 wks
5 - 10s 95 % to 70 %
6 - 10s 91 % to 62 %
5 - 12s 85 % to 52 %
6 - 12s 75 % to 45 %
7 - 12s 70 % to 40 %
General IndustryStudies General Industry Studies
U.S. Army Corps of Engineers Modification U.S. Army Corps of Engineers Modification
Impact Evaluation Guide
Mechanical Contractors Association of
America
National Electrical Contractors Association
Estimating Guides
General IndustryStudies General Industry Studies
MCAA MCAA
16 Factors
Range of Loss Range of Loss
NECA
25 Factors Checklist 25 Factors Checklist
Normal Difficult Most Difficult
US Army Corps of Engineers US Army Corps of Engineers
Number of Factors
No Longer Published
o o ge ub s ed
Cost Basis Cost Basis
Total Unit Cost Method Total Unit Cost Method
Modified Total Labor Cost Method
Total Labor Cost Method Total Labor Cost Method
Measured Mile Measured Mile
MEASURED MILE
40,000
Actual Production
32,668
MEASURED MILE
30,000
e
r

P
e
r
c
e
n
t
20,000
M
a
n
h
o
u
r
s

p
e
60% Complete: 14,762 Manhours
-
10,000
-
1
0
%
2
0
%
3
0
%
4
0
%
5
0
%
6
0
%
7
0
%
8
0
%
9
0
%
1
0
0
%
Percent based on Foundation Concrete
Court Case (A) Clark Concrete Contractors,
I 99 1BCA 30280[1] Inc., 99-1 BCA 30,280 [1]
[The Government] is correct in asserting that the work [ ] g
performed during the periods compared by [the
Contractor] was not identical in each period. We
would be surprised to learn that work performed in would be surprised to learn that work performed in
periods being compared is ever identical on a
construction project, however. And it need not be; the
f f ff ascertainment of damages for labor inefficiency is not
susceptible to absolute exactness. (Citation omitted).
We will accept a comparison if it is between kinds of p p
work which are reasonably alike, such that the
approximations it involves will be meaningful.

Managing Construction Claims

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