The underlying impact of change orders on labor productivity

Tracking labor productivity is crucial for the success of construction projects. Generally, the

project duration relies on productivity. Change orders are common practice during construction.

Because each project is unique, change orders are mainly result from defective engineering

drawings along with others factors. These changes make disruptions on the project. There are

three pioneered published studies assessing the cumulative impact of change orders on the labor

productivity. Yet, these studies did not address two important element: change time, and

calculating extra working hours. Currently, these studies are the base of contractor argument to

accuse the owner for productivity loss claim. The first study (Leonard) was the bedrock of the

other studies. This article will review each study and indicate its limitation.

The first study was conducted by Leonard is 1988 in Canada. He investigated 57 different

projects on both commercial and institutional buildings. According to Leonard, he defined

multitude impact of change orders as Generally delays and disruptions caused by change orders

were found to bring about gradual deterioration of the contractors planning and scheduling.

Orderly sequences of operations were divided into several, perhaps isolated, activities completed

in piecemeal fashion over an extended period. The impact of change on labor productivity in

Leonards study are summarized as: re-sequencing of work, trade stacking, overtime, material

sourcing problems, weather conditions, labor problems, low morale, shift work and the need for

schedule compression (acceleration). Leonard calculated the productivity index, which is

generally agreed between researchers as a measurement of lost productivity. He found that

cumulative change orders are associated with labor productivity lost. He also discovered that the

loss of productivity would increase as the cumulative change orders are accompanied by another

factors, such as inclement weather or overmanning (Leonard). Leonards data was collected from
projects that reached dispute level. It is worthwhile to mention that all Leonards projects were

Canadian; therefore, Leonards model is not reliable to be applied in different weather

conditions. This study was the first, which connected change orders with productivity loss

quantitatively.

A study was conducted under the supervision of the Construction Industry institute by

Ibbs and Allen. This study showed that productivity loss because of change orders is less than

Leonards figures. They studied 104 projects, both domestically and internationally. In addition,

their data included industrial, commercial, and heavy civil projects. They compared the effect of

cumulative change orders on civil/architectural and mechanical/electrical. They found that there

is not a distinction on the basis of type of trade. The authors defined the percent change as the

number of work-hours expended on authorized changes that originated during the construction

phase divided by the total number of work-hours expended for construction. (Ibbs and Allen).

The study was general, and it is difficult to file a productivity loss claim based on the study.

In 1999, Hanna investigated the impact of changes orders on mechanical and electrical

projects. The values of the examined projects were between $61,000 and $13, 6000,000. He

found that the percent change calculated by dividing change order hours over the estimated

contract base hours is more significant than what had been performed by Leonard, Ibbs and

Allen. He introduced two empirical formulas for each trade (Hanna). It is not reliable to depend

on the project estimation as a base in finding insufficient working hours. In addition, the projects

that Hanna studied were limited to only two trades.

The findings of the three studies are restricted to calculating the percent loss due to

cumulative impact of change orders. They evaluated the impact on each trade, and concluded

that change orders hurt labor productivity drastically. The findings of this study have a number of
important implications for future practice such as arbitration and mediation the productivity loss,

and awarding the contractor extra time and compensation for the damages cause by such

changes. Further work needs to be done to establish whether the time of change has an effect on

the productivity loss figure or not. In addition, future field investigations are needed to estimate

the extra working insufficient hours.

Work Cited

Leonard, C A. "The Effect of Change Orders on Productivity." The Revay Report 6.2 (1987): N.

pag. Web. Spring .

Ibbs, C W., and W E. Allen. "Quantitative Impacts of Project Change." Construction Industry

Institute 43.2 (1995): N. pag. Web. Spring .

Hanna, A. "Impact of Change Orders on Labor Efficiency for Mechanical Construction."

J.C.E.M 125.3 (1999): 176-184. Web. Spring 2014.