Pilot Investigation of Underestimates: Likelihood, Severity, and Impact on Productivity

Abstract

Labor productivity is susceptible to many factors, including those related to working conditions, methods, and construction resources. It is not uncommon to see that contractors performed the work in a different manner than what was originally anticipated for factors either within or beyond contractor’s control. Similar to changes expressly or constructively directed by the owner, contractors’ underestimates could also lead to an unanticipated condition causing a decline in productivity. Many papers have focused on the impact on labor productivity from the changes beyond the contractor’s control, but little research has been done on underestimates, including their prevalence, severity, and impact on labor productivity, in a reliable, quantitative way. In order to help project owners, contractors, and other parties better understand the issues impacting labor productivity on their projects, this paper reports a quantitative analysis on the impact of underestimates on productivity, using data published in the past, investigating the amount, likelihood, and impacts of underestimates. This analysis generally confirms the negative impacts of underestimate from a statistical perspective. Findings presented in this paper can help provide valuable insight in determining the root causes of loss of productivity, and resolve issues related to construction productivity. It is also hoped that more research can be inspired by this pilot investigation to advance the body of knowledge on this subject.