The ability of the contractor to call upon records to accurately demonstrate the causes of the losses is paramount to a successful claim.

Historically, additional labor costs are the single largest factor in construction claims. The reasons can vary from project to project, but it generally comes down to lost productivity. Most contractors are aware that their labor is disrupted and they are experiencing losses in productivity; however, they can be unsure of the causes. The ability of the contractor to call upon records to accurately demonstrate the causes of the losses is paramount to a successful claim.

First, lets list a few of the factors that can cause disruption to the contractor’s labor force:

  • Overtime

  • Trade stacking

  • Lack of access to work areas

  • Acceleration

  • Out-of-sequence work

  • Crew over-manning

  • Change orders

  • Design and engineering impacts

  • Management changes and problems

  • Weather

  • Dilution of supervision

  • Morale

  • Insufficient lay-down area

How does a contractor develop a history of the impacts on productivity caused by the stacking of trades, lack of access to work, etc.? Most contractors already have all the necessary elements of record keeping to prepare this history, but they do not use them fully.

The single most important set of documents to give a “story” of what happened on a day- to-day basis on the project is the foreman’s daily report. Most foremen or superintendents use this form to give a list of facts about the day’s work, for example, “Met with designer on change to scuppers,” or, “Owner says project is late, we must make up time.” These are very useful and relevant facts, but what is their impact? What is the story?

Instead of simply entering a fact, the foreman and superintendent should add a comment about the impact on his workforce for each factor. If there is a design change to the work, then a comment about lost production, moving workers, idle time, etc., is important. If the work is accelerated, then a comment about stacking of forces, what trades are in your way, etc., will go a long way toward making the story.

Negative comments can be dangerous. The daily log is not a forum for venting frustrations and airing grievances within the company. Negative comments, no matter how accurate, often can be used to offset a contractor’s legitimate claim for disruption by highlighting internal issues.

However, the daily records are only part of the documentation necessary. Memories fade, facts become jumbled and we lose the particulars of what happened. When a contractor finds labor costs rising, he must document this problem in the form of memoranda, letters or even e-mail. Instead of just listing a series of project facts, the contractor should concentrate on presenting a logical and reasonable “story” of the impacts of these facts. It is important to list the facts, but it is even more important to develop a record of how these facts have caused labor costs to rise.

Remember, even e-mails can be discoverable by the other side in a dispute; therefore, comments which are inflammatory or detrimental to your position in a claim action can, and likely will, end up in the hands of the other side. Caution is recommended.

As an example, a contractor was working on a project in which his period of work was compressed from one month to three weeks. The contractor should include comments about how this acceleration impacted his work force, including factors such as overtime, working out of sequence, etc. It is always beneficial if the contractor can identify a specific loss, for example, “Because we encountered several design problems, our overtime on Saturday was a waste of time. Neither the general contractor nor the designer worked that day and we could not proceed without answers.”

Consider your plan of work, your crew size, your supervision, and your schedule as your right. Anything that deviates from that plan will most likely cause you some labor losses, and you should document them, and their impacts, as clearly as possible. Often contractors avoid commenting on small issues only to learn later that this issue repeated itself, or that the issue turned out to be larger than once believed. Document everything!

Care should be taken to avoid making accusations without any reasonable support, but a contractor should not hesitate to state his opinions or perceptions in his records.