Where records will not support a comparison, claims frequently fall back on published factors: a percentage for working out of sequence, a percentage for overcrowding, a percentage for stacking of trades. The approach is understandable and it is the weakest available, which is worth knowing before it is used in loss and expense claim preparation.
The factors themselves come from studies of construction productivity and they are not invented. The difficulty is in applying them to a particular project.
What the approach does
It takes the labour value of affected work and applies a percentage uplift for each identified cause of inefficiency.
The percentages come from published tables, which draw on productivity studies of varying age and relevance.
The result is a figure that is arithmetically clean and evidentially unsupported.
Why it is attractive
It produces a calculation where records would not support one.
It appears objective, because the percentages come from a published source rather than from the claimant.
And it is quick, which matters when a claim has to be put in.
Why it gets refused
Because nothing links the percentage to this project. The table describes construction in general and the claim concerns particular work.
Because the factors frequently compound, so that applying several produces an uplift no assessor will accept.
And because the choice of which factors apply, and at what level within each range, is the claimant’s own, which is exactly what the approach was supposed to avoid.
The compounding problem
Where four factors are applied, each at the middle of its range, the combined uplift can approach or exceed the original labour value.
A claim that says the work took twice the labour it should have needs more than a table to support it.
Assessors test the total rather than each factor, and a total that fails the common sense test discredits the whole submission.
Where the approach has some use
As a cross check on a figure established another way, which is a legitimate use.
As an order of magnitude at the start, to decide whether a claim is worth preparing at all.
And in negotiation, where both sides understand it is an approximation and are using it as a reference point.
What to do instead
Look harder for a comparison. A single activity with usable records supports a stronger claim than the whole project supports with factors.
Consider whether a prolongation claim covers more of the loss, since it is proved differently and usually more easily.
And consider whether the real answer is a narrower claim, which is frequently where this analysis ends up.
Presenting it honestly if it is used
Say what the source is, what each factor is for, and why each applies to this work.
Use the lower end of each range rather than the middle, and apply fewer factors rather than more.
And present it as an estimate rather than as a calculation, because an assessor who finds it dressed up as something firmer will discount all of it.
What the other side will say
That the factors are generic, which is true. That the selection is self serving, which it may be.
That the affected labour value includes work that was not affected, which is worth checking before submission.
And that the contractor’s own performance accounts for the difference, which is hard to answer without productivity records.
The underlying issue
This approach is reached for when the records do not exist, which means the real failure happened during the project.
No calculation method recovers from missing records, and presenting one as though it does wastes the claim.
The useful conclusion from this analysis is usually about what to record from now on.
Proportionate preparation
Deciding whether the records support a real disruption claim takes days and determines everything that follows.
Where they do not, the time is better spent on the heads that can be proved.
A short, provable claim settles. A long, unprovable one does not, however much work went into it.
Where the factors came from
The published tables draw on productivity studies carried out on particular types of work, in particular conditions, some of them decades ago and most of them outside the United Kingdom. That is not a reason to dismiss them and it is a reason to say where they came from.
A submission that cites the source, the study population and the date allows the assessor to weigh it. One that presents a percentage as though it were an established constant invites a much shorter answer.
Where the work in question is nothing like the work studied, the factor is of very little use, and saying so before the other side does costs nothing and preserves credibility across the rest of the claim.
Using them to decide whether to claim
The legitimate use of a factor table is at the start, as an order of magnitude. If the indicative figure is small, the disruption head may not justify the work of preparing it, and the budget belongs on prolongation instead.
If the indicative figure is large, that is a reason to look harder for records that would support a proper calculation, including records held by subcontractors and by the other side.
Either way the table has done its job without appearing in the submission, which is where it is most useful and where it causes the least damage.
Where it fits
This is a method within a disruption claim, used when better methods are unavailable, and it should be the last option considered.
The question of what the records support is settled first, as part of initial dispute review work.
The records that make better methods possible are kept during the project, through commercial management rather than afterwards.
Costs incurred that nobody has agreed to pay?
Loss and expense claim preparation sets out the contractual provisions relied on, the costs actually incurred and the link between each matter and each head of cost, in a form that can be tested.