Construction Law

Court Endorses the “Measured Mile” Method of Calculating Contractor Inefficiency

By John P. Ahlers

The Pennsylvania Appeals Court recently endorsed the "measured mile" method as the preferred method of calculating loss of productivity damages.  The court explained that this method compares the cost of completing work not subject to delay or acceleration, with the cost of completing the work during the period of impact.  The work compared may not be exactly the same as the ascertainment of damages for labor inefficiency, which generally is not susceptible to absolute exactness.

On a school district project, the work was delayed by late issuance of a notice to proceed, the late procurement of an erosion and sedimentation permit, a failure to prepare a construction schedule until four months after the project had commenced.  When the construction manager recommended that a time extension be granted to the contractors (the project was built by trade contractors, no general contractor was hired, the construction manager was fired).  The trade contractors, when they were not granted a time extension, hired additional manpower to complete the job.  (accelerated)

The contractor, in calculating its claim compared the labor hours expended to complete the project before the acceleration commenced with the labor hours expended to complete the project after the acceleration.  Using the unimpacted earlier time frame as the "measured mile".  The court found this method of calculating damages credible.

James Corp. v. North Allegheny School District, 2007 WL 4208589 (PA Commonwealth, Nov. 30, 2007)

Full post as published by Construction Law Blog on February 25, 2008 (boomark / email).