COURT HOLDS THE "MEASURED MILE ANALYSIS" IS PROPER DAMAGE MEASURE FOR LOST LABOR CLAIMS

By: Brian S. Case, Esq.

Clark Concrete Contractors, Inc. v. General Services Administration, GSBCA No. 14340 (March 15, 1999) The General Services Board of Contract Appeals has determined that a contractor’s use of a "measured mile analysis" to determine the amount of its damages for a lost labor efficiency claim suffered as a result of an owner’s design changes. Clark Concrete Contractors, Inc. was building a public works project where the owner implemented design changes causing delays and out-of-sequence work. A series of disputes ensued regarding the indirect impact costs incurred by the contractors as a result of the design changes. The contractor compared labor costs incurred in performing unaffected portions of the work with labor costs incurred in performing impacted portions of the work. Certain percentage adjustments were made in an effort to make the comparisons more accurate. The owner objected to the use of this so-called "measured mile" technique, arguing that it was nothing more than a "total cost" method of pricing a claim. The owner also noted that the work being performed during the various periods of time was far from identical. The Board ruled that while some adjustments needed to be made to the contractor’s percentage adjustments, the measured mile analysis is a legitimate technique for measuring lost labor efficiency. "GSA is correct in asserting that the work performed during the periods compared was not identical in each period. We would be surprised to learn that worked performed in periods being compared is ever identical on a construction project, however. And it need not be. The ascertainment of damages for labor inefficiency is not susceptible to absolute exactness. We will accept a comparison if it is between kinds of work which are reasonably alike, such that the approximations it involves will be meaningful."