Cumulative Impact Claims – Quantifying Damages

Quantifying a cumulative impact claim caused by a multiplicity of changes on a construction project is a challenge.  Generally, liability is established showing the breach of contract, by the project owner who generated the changes and evidence of the consequent disruption caused by the multitude of changes.  Causation requires that the contractor prove that the inefficiency was proximately caused by the owner’s changes.  Damages do not have to be proved with mathematical certainty, the contractor must demonstrate a reasonable estimate of the loss of productivity caused by the changes to carry the evidentiary burden.  Often, the very factors that produce the loss of productivity can preclude the accurate and precise record keeping that would allow damages to be calculated with evidentiary certainty. [1] 

Loss of productivity claims, by their nature, do not allow for precise determination, however, by using the following accepted methods of damages computation, once the resultant injury is demonstrated, that is that damages are shown, as long as the damages are reasonably computed, (that neither the judge, jury nor arbitration panel has to guess at what the damages are) the cumulative impact can generally be demonstrated.  There are a number of accepted methods of computing the productivity losses:

1.  Measured Mile Analysis.  A measured mile analysis compares the productivity loss in the impacted period with the productivity in the unimpacted period.  The amount of lost productivity caused by a change is arrived at by comparing the unit productivity rates in an undisturbed time period or physical area to those in a disrupted time period or physical area.[2]

During construction of a new FBI building (cast in place concrete), in response to the Oklahoma City federal building tragedy, the GSA changed the structure to include blast walls.[3]  Clark’s (the concrete subcontractor) forming and stripping of concrete walls was drastically affected by the change.  Clark was able to successfully employ the measured mile method to prove that the productivity loss of construction caused by the design changes.  The predesign productivity rate for forming and striping of concrete slabs and columns was shown to be only 77% as efficient after the design changes were made when compared to the predesign production rates.  Measured mile analyses generally require identical or substantially similar work for productivity comparisons.  In the Clark case, the repetitive concrete work in a high-rise office building, where the floors are identical or substantially similar, lent itself well to a measured mile comparison.  If the affected work is unique, or the contractor did not keep good contemporaneous records, often times no measured mile exists, in such situations, the earned value analysis is more conducive to productivity loss computation.  

2.  Earned Value Analysis.  The difference between the actual hours expended and the earned hours for the impacted period are used to calculate the inefficiency experienced (or alternatively, the revenue per man-hour in the unimpacted period is compared with the revenue per-man hour in the impacted period) to arrive at a earned value or “financial measured mile.”  A number of variants of the measured mile/earned value analyses combine earned value and measured mile in hybrid approach.  In the following cases the contractors prevailed using the earned value analysis:

  • James Corp. d/b/a James Construction v. N. Allegheny Sch. Dist., et al.[4]  In this case a number of subsurface differing site conditions delayed and impacted the job.  The District argued that the contractor’s earned value analysis was nothing more than the disfavored “total cost” approach.  The expert however had divided the project into different time periods and analyzed each period on its own merits, including applying a conservative factor to account for the contractor’s own problems.
  • Bell BCI Co v. United States.[5] The owner had surplus funds and decided to add a new floor during construction of the project which delayed the job by 19.5 months and increased the contract price substantially.  This variant starts with identifying a “reasonable labor-hour level” as the ratio of the actual and planned labor-hours for the planned quantity installed in the unimpacted period.  It then identifies reasonable labor-hours for the impacted period and compares them with the actual labor-hours.
  • Appeal of P.J. Dick, Inc.[6] Here there was no period without owner caused disruptions available for the same work.  Therefore, similar work with an undisrupted period was identified on the same project (or similar project).  Productivities were not compared directly to find the loss of efficiency as in the measured mile analysis with similar work, instead, an “efficiency factor” was determined as the ratio of actual labor-hours and budgeted labor-hours for the similar work in the undisrupted period.  Realistic budgeted labor-hours for the disrupted work were calculated by multiplying the budgeted labor-hours by the efficiency factor. 

3.  Comparison of the Various Methods.

This blog is taken in large measure from a recent article by Professors Ibbs and Nuygen published in the Construction Lawyer (Winter 2012).[7]  The authors conclude with an interesting comparison chart using the various measured mile/earned value analyses.  The table uses the same data, but computes the lost productivity in a number of different ways.  The loss of productivity ranges between 3,976 hours and 11,393 hours.  Interestingly, the total cost approach does not end up resulting with the highest productivity loss.  [the total cost method does not take into account the productivity gain (even the original bid amount), particularly when learning curve efficiencies are realized].


 Method                                                                       Lost Productivity (labor-hours)

Total cost method                                                                       6,138

Earned value analysis                                                               6,277

Measured mile analysis                                                            6,858

Variant in James Corp. (2007)                                                 6,531

Variant in Bell BCI Co. (2008)                                                 11,393

Variant in the Appeal of P.J. Dick (2001)                                3,976


Comment: The method chosen will often depend upon what data is available.  Generally speaking, the measured mile analysis is commonly accepted in the construction industry as a method of quantifying loss of productivity associated with cumulative changes.  When the classical measured mile approach is not available, a variant of the earned value analysis may be the only option the contractor has at its disposal.  It is generally prudent to use more than one of these methods to corroborate the productivity losses if possible.


[1]  Thomas E. Shea, Proving Productivity Losses in Government Contracts, 18 Pub. Contract L.J. 414 (1989).

[2]  D.A. Zink, The Measured Mile: Proving Construction Inefficiency Costs, 28:4 J. Cost Engineering

[3]  Clark Concrete Contractors, Inc., Gen. Srvs. Admin. GSBCA No. 14340, 99-1 BCA ¶30, 280 (1999).

[4]  938 A.2d 474 (P.A. Commw. Ct. 2007).

[5]  81 Fed.Cl. 617 (2008), aff’d in part and vacated in part, 570 F.3d 1337 (Fed. Circ. 2009). 

[6]  GSBCA No. 6080-82, 01-2BCA ¶31647 (2001).

[7]  Ibbs, Nuygen Construction Lawyer (Winter 2012), Using the Classical Measured Mile Approach and Variance to Quantify Cumulative Impact Claims.

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