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LABOUR DISRUPTION:

10 TOP TIPS

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Jonathan Bowcott By Jonathan Bowcott BSc(Hons) MRICS MCIArb, Managing Director

[Read as PDF Article]

Working efficiently can make you money. Inefficient working can seriously erode profit margins and rack up costs. For many contractors, or more probably subcontractors (such as those installing mechanical and electrical services or curtain walling), the productivity they can achieve is of the utmost importance. Most people are aware of the measured mile principle for measuring productivity, however in practice it seems very few contractors seem to be geared up to produce records which allow such an analysis. Considering how much money is spent winning a project any failure to instigate effective record keeping is staggering. The following should help to provide some thoughts for when you are setting out on a new project and also when you are in that situation when you realise you’ve spent all your planned labour hours and there’s still bucket loads of work to do

Here are ten tips to help when preparing labour disruption claims:

  1. Set up to record productivity

Unless you are geared up for recording productivity from the start it is very unlikely that you will have satisfactory records to be able to prove either that productivity has changed or the causes of that productivity change. Most contractors typically only realise there is a problem once the man hour allowance has been spent. This is too late!

  1. Effective programming is essential

An effective baseline programme is an essential tool in being able to monitor progress of activities. It is vital to accurately record progress of activities on a periodic basis so that the durations taken and workscope completed can be recorded. Ideally labour levels utilised on each activity should be recorded.

  1. Know when you have a claim!

Being able to calculate the manhours that have been spent in comparison to the manhours that have been recovered or earned is only the start of the process. This may demonstrate that you have lost money on your installation, but it does not demonstrate that you have any entitlement to recover those losses!

  1. Measured Miles & Planned Allowances

The ideal scenario to show that productivity was reduced is to compare an uninterrupted section of work with a similar disrupted section. All very easy in theory! Sometime you may never have had an uninterrupted section. If you have to rely on planned allowances you should always be able to prove that planned allowances were a reasonable allowance. Again, bear in mind tip 3, just because productivity may have been affected you still need to explain why and who was responsible!

  1. Compare apples with apples

If you are comparing earned hours (i.e. labour norms x quantities installed) against actual hours spent are the two a correct comparison? Actual hours may include for tea breaks or time walking to the workface, whilst the earned hours may not.

  1. Gather Contemporaneous Evidence

Too many labour disruption claims fail because they cannot provide sufficient evidence of the causes of the disruption. Too often the evidence is neglected until the need for a claim arises at which point the site team get together to think up the reasons that have affected progress. These reasons may or may not be correct but the problem will be demonstrating precisely how they have affected productivity.

  1. Have systems to capture the event

Often the causes of lost productivity are very detailed. As such that you need to be prepared to record these events in detail. For example if you are working and you need to raise a query, you must record the fact that work stopped, a TQ was raised, operatives had to be reallocated etc. If you are diligent you can implement systems to record these events, how long they took and where on site.

  1. Don’t rely on glib evidence

Too often the old clichés are rolled out to explain why productivity losses cannot be demonstrated and explained. The causes are cumulative and rolled up, the interaction of so many variations etc etc.  All this shows is that you haven’t implemented an effective recording system. If you can’t prove it, you lose it!

  1. Answer the ‘what happens next’ question

There needs to be an explanation as to how specific causes have actually affected progress on site. General explanations such as “lack of access” may or may not be valid. If an operative has gone to a workface but cannot get access to an area this is a valid reason. However, what happened next? Did he report back to the supervisor and get reassigned to another workface, thereby losing little productive time or was the shift aborted?

  1. Don’t go global!

Usually because of a lack of records and understanding as to how to put a claim together all that is produced is a global claim. If you do this then your recovery is in the lap of the gods! Often there are elements of the disruption claim which can be particularised to a better level of detail. Particularise each aspect as far as you can. These will have a far better chance of recovery whilst demonstrating that disruption has occurred. Also any remaining amounts that are pleaded globally will be viewed on the basis that there has been some disruption and potentially could be viewed more favourably as a result.

Far too often, disruption claims are seen as the negotiating margin; something that can be included to increase the value of a claim, but in full knowledge that it will be knocked back. It should not be like this. It is not difficult to set up some basic systems to capture progress and evidence of disruption. The problem is most chose not to consider it from the outset and are not diligent enough to keep the recording systems going consistently. If a little time and effort is put into the process the benefits would almost certainly outweigh the cost!

Key Contact
Jonathan Bowcott
jonathanbowcott@mbmconsult.com

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