Scholarly Papers
Jul 8, 2021

Pilot Investigation of Underestimates: Likelihood, Severity, and Impact on Productivity

Publication: Journal of Legal Affairs and Dispute Resolution in Engineering and Construction
Volume 13, Issue 4

Abstract

Labor productivity is susceptible to many factors, including those related to working conditions, methods, and construction resources. It is not uncommon to see that contractors performed the work in a different manner than what was originally anticipated for factors either within or beyond contractor’s control. Similar to changes expressly or constructively directed by the owner, contractors’ underestimates could also lead to an unanticipated condition causing a decline in productivity. Many papers have focused on the impact on labor productivity from the changes beyond the contractor’s control, but little research has been done on underestimates, including their prevalence, severity, and impact on labor productivity, in a reliable, quantitative way. In order to help project owners, contractors, and other parties better understand the issues impacting labor productivity on their projects, this paper reports a quantitative analysis on the impact of underestimates on productivity, using data published in the past, investigating the amount, likelihood, and impacts of underestimates. This analysis generally confirms the negative impacts of underestimate from a statistical perspective. Findings presented in this paper can help provide valuable insight in determining the root causes of loss of productivity, and resolve issues related to construction productivity. It is also hoped that more research can be inspired by this pilot investigation to advance the body of knowledge on this subject.

Get full access to this article

View all available purchase options and get full access to this article.

Data Availability Statement

Some or all data, models, or code generated or used during the study are available in a repository online in accordance with funder data retention policies. The data relied on in this paper can be found in Leonard (1988) or https://spectrum.library.concordia.ca/5043/.

References

List of Cases

Bechtel National, Inc., NASA BCA No. 1186-7, 90-1 BCA ¶ 22,549.
Centex Bateson Construction Co., VABCA Nos. 4613, 5162–5265, 99–1 BCA ¶ 30,153, 149,261.
Great Lakes Dredge & Dock Co. v. United States, F. Supp. 923 (Ct. Cl. 1951).
Montgomery-Ross-Fisher, Inc., PSBCA Nos. 1033, 1096, 84-2 BCA ¶ 17,492.
Southwest Marine, Inc., DOT BCA No. 1663, 94–3 BCA ¶ 27,102, 135,078.
Triple “A” South, ASBCA No. 46886, 94-3 BCA ¶ 27,194.

Work Cited

AACE (Association for the Advancement of Cost Engineering). 2004. Estimating lost labor productivity in construction claims. Morgantown, WV: AACE.
AACE (Association for the Advancement of Cost Engineering). 2012. Cost estimate classification system—As applied for the building and general construction industries. Morgantown, WV: AACE.
Abdel-Wahab, M., and B. Vogl. 2011. “Trends of productivity growth in the construction industry across Europe, US and Japan.” Constr. Manage. Econ. 29 (6): 635–644. https://doi.org/10.1080/01446193.2011.573568.
Aljohani, A., D. Ahiaga-Dagbui, and D. Moore. 2017. “Construction projects cost overrun: What does the literature tell us?” Int. J. Innovation Manage. Technol. 8 (2): 137–143. https://doi.org/10.18178/ijimt.2017.8.2.717.
Baloi, D., and A. Price. 2003. “Modelling global risk factors affecting construction cost performance.” Int. J. Project Manage. 21 (4): 261–269. https://doi.org/10.1016/S0263-7863(02)00017-0.
Cantarelli, C. C., B. Flyvbjerg, and S. L. Buhl. 2012. “Geographical variation in project cost performance: The Netherlands versus worldwide.” J. Transp. Geogr. 24 (Sep): 324–331. https://doi.org/10.1016/j.jtrangeo.2012.03.014.
Edwards, C., and N. Kaeding. 2015. “Federal government cost overruns.” Cato Inst. Tax Budget Bull. 72.
Flyvbjerg, B., N. Bruzelius, and W. Rothengatter. 2003. Megaprojects and risk: An anatomy of ambition. Cambridge, UK: Cambridge University Press.
Flyvbjerg, B., M. Holm, and S. Buhl. 2002. “Underestimating costs in public works projects: Error or lie?” J. Am. Plann. Assoc. 68 (3): 279–295. https://doi.org/10.1080/01944360208976273.
Flyvbjerg, B., M. Holm, and S. Buhl. 2004. “What causes cost overrun in transport infrastructure projects?” Transp. Rev. 24 (1): 3–18. https://doi.org/10.1080/0144164032000080494a.
Han, S. H., S. Yun, H. Kim, Y. H. Kwak, H. K. Park, and S. H. Lee. 2009. “Analyzing schedule delay of mega project: Lessons learned from Korea train express.” IEEE Trans. Eng. Manage. 56 (2): 243–256. https://doi.org/10.1109/TEM.2009.2016042.
Hanna, A. S., J. Russell, T. W. Gotzion, and E. V. Nordheim. 1999a. “Impact of change orders on labor efficiency for mechanical construction.” J. Constr. Eng. Manage. 125 (3): 176–184. https://doi.org/10.1061/(ASCE)0733-9364(1999)125:3(176).
Hanna, A. S., J. Russell, E. V. Nordheim, and M. Bruggink. 1999b. “Impact of change orders on labor efficiency for electrical construction.” J. Constr. Eng. Manage. 125 (4): 224–232. https://doi.org/10.1061/(ASCE)0733-9364(1999)125:4(224).
Ibbs, C. W. 1997. “Quantitative impacts of project change: Size issues.” J. Constr. Eng. Manage. 123 (3): 308–311. https://doi.org/10.1061/(ASCE)0733-9364(1997)123:3(308).
Ibbs, C. W. 2005. “Impact of change’s timing on labor productivity.” J. Constr. Eng. Manage. 131 (11): 1219–1223. https://doi.org/10.1061/(ASCE)0733-9364(2005)131:11(1219).
Ibbs, C. W. 2012. “Construction change: Likelihood, severity and impact on productivity.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 4 (3): 67–73. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000089.
Ibbs, C. W., and W. E. Allen. 1995. Quantitative impacts of project change. Austin, TX: Construction Industry Institute.
Ibbs, C. W., and C. Chen. 2011. “Discussion of ‘Why are loss of labor efficiency damages so difficult to recover?’ by H. Randolph Thomas.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 3 (4): 182–183. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000071.
Ibbs, W., and G. McEniry. 2008. “Evaluating the cumulative impact of changes on labor productivity—An evolving discussion.” Cost Eng. 50 (12): 23–29.
Leonard, C. A. 1988. “The effects of change orders on productivity.” M.S. thesis, Centre for Building Studies, Concordia Univ.
Mahamid, I. 2018. “Study of relationship between cost overrun and labour productivity in road construction projects.” Int. J. Productivity Qual. Manage. 24 (2): 143–164. https://doi.org/10.1504/IJPQM.2018.091791.
McEniry, G. 2007. “The cumulative effect of change orders on labour productivity: The Leonard study ‘reloaded.’” Revay Rep. 26 (1): 1–8.
Pickrell, D. H. 1990. Urban rail transit projects: Forecast versus actual ridership and cost. Washington, DC: USDOT.
Pickrell, D. H. 1992. “A desire named streetcar fantasy and fact in rail transit planning.” J. Am. Plann. Assoc. 58 (2): 158–176. https://doi.org/10.1080/01944369208975791.
Seals, R., and M. C. Friedlander. 2011. “Examining studies used to support expert opinions: Does the study make the grade? An illustrative test for suitability.” J. Am. College Constr. Lawyers 5 (1): 127–129.
Smith, A. J. 1995. Estimating, tendering and bidding for construction: Theory and practice. Basingstoke, UK: Macmillan Education.
Thomas, H. R. 2010. “Why are loss of labor efficiency damages so difficult to recover?” J. Leg. Aff. Dispute Resolut. Eng. Constr. 2 (4): 190–193. https://doi.org/10.1061/(ASCE)1943-4162(2010)2:4(190).
Zhao, T., and J. M. Dungan. 2018. “Quantifying lost labor productivity in domestic and international claims.” J. Leg. Aff. Dispute Resolut. Eng. Constr. 10 (3): 04518013. https://doi.org/10.1061/(ASCE)LA.1943-4170.0000269.

Information & Authors

Information

Published In

Go to Journal of Legal Affairs and Dispute Resolution in Engineering and Construction
Journal of Legal Affairs and Dispute Resolution in Engineering and Construction
Volume 13Issue 4November 2021

History

Received: Jul 23, 2020
Accepted: Apr 16, 2021
Published online: Jul 8, 2021
Published in print: Nov 1, 2021
Discussion open until: Dec 8, 2021

Permissions

Request permissions for this article.

ASCE Technical Topics:

Authors

Affiliations

Tong Zhao, Ph.D., M.ASCE [email protected]
P.E.
Senior Director, Delta Consulting Group, Inc., 4330 Prince William Pkwy., Suite 301, Woodbridge, VA 22192 (corresponding author). Email: [email protected]
J. Mark Dungan, M.ASCE [email protected]
Executive Vice President and Co-Founding Partner, Delta Consulting Group, Inc., 4330 Prince William Pkwy., Suite 301, Woodbridge, VA 22192. Email: [email protected]

Metrics & Citations

Metrics

Citations

Download citation

If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.

Cited by

  • Critical Factors Affecting the Bid Cost of Building Construction Projects, Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, 10.1061/JLADAH.LADR-960, 15, 3, (2023).
  • Sensitivity Study on Loss of Productivity Quantification Methods, Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, 10.1061/JLADAH.LADR-917, 15, 2, (2023).
  • Timing and Severity of Cumulative Impact of Changes on Labor Productivity, Journal of Legal Affairs and Dispute Resolution in Engineering and Construction, 10.1061/(ASCE)LA.1943-4170.0000586, 15, 1, (2023).

View Options

Get Access

Access content

Please select your options to get access

Log in/Register Log in via your institution (Shibboleth)
ASCE Members: Please log in to see member pricing

Purchase

Save for later Information on ASCE Library Cards
ASCE Library Cards let you download journal articles, proceedings papers, and available book chapters across the entire ASCE Library platform. ASCE Library Cards remain active for 24 months or until all downloads are used. Note: This content will be debited as one download at time of checkout.

Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.
ASCE Library Card (5 downloads)
$105.00
Add to cart
ASCE Library Card (20 downloads)
$280.00
Add to cart
Buy Single Article
$35.00
Add to cart

Get Access

Access content

Please select your options to get access

Log in/Register Log in via your institution (Shibboleth)
ASCE Members: Please log in to see member pricing

Purchase

Save for later Information on ASCE Library Cards
ASCE Library Cards let you download journal articles, proceedings papers, and available book chapters across the entire ASCE Library platform. ASCE Library Cards remain active for 24 months or until all downloads are used. Note: This content will be debited as one download at time of checkout.

Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.
ASCE Library Card (5 downloads)
$105.00
Add to cart
ASCE Library Card (20 downloads)
$280.00
Add to cart
Buy Single Article
$35.00
Add to cart

Media

Figures

Other

Tables

Share

Share

Copy the content Link

Share with email

Email a colleague

Share