LOSS OF EFFICIENCY DAMAGES

1. The Nature of Loss of Efficiency Damages
1. What are Loss of Efficiency Damages
2. Delay Damages
2. Causes of Loss of Efficiency Damages
1. Stacking of Trades
2. Out-of-Sequence Work
3. Weather Conditions
4. Changes
5. Acceleration
6. Differing Site Conditions
7. Preceding Work Not Complete
3. Elements of a Loss of Efficiency Claim
1. Defendant’s Acts or Omissions
2. Causation
3. Damages
1. Actual Cost
2. Measured Mile
3. Total Cost Method
4. Modified Total Cost Method
5. Jury Verdict
6. Jury Instructions
7. Methods of Proof
1. Experts
2. Pictures
3. Graphs and Charts
4. Publications
4. Defensive Tactics
1. Failure to Preserve Claim
2. Failure to Apportion Damages
3. Attack on Computations

Loss of efficiency damages are additional costs resulting from a contractor expending additional resources on a construction project without realizing the amount of productivity that would otherwise be realized in the absence of the event causing the additional costs. There is some confusion about the specific nature of loss of efficiency damages. This in part stems from the fact that loss of efficiency damages can result from a number of different events, but most often from delay. The courts typically describe loss of efficiency damages, therefore, as a form of delay damages. By way of example, in Net Const. Inc. v. C&C Rehab & Construction, Inc., 256 F. Supp. 2d 350 (E.D. Pa.) (“Net Construction”), the court stated as follows: “A claim of lost productivity is a claim arising out of a delay of a construction project that causes a contractor to alter its method of performance so as to proceed in less productive manner; the contractor may claim its inefficiency as a delay damage.” Id. at 354. Loss of efficiency damages can and most often do occur as a result of delay damages but they can also occur as a result of other causes, such as changed subsurface conditions and hindrance by a general contractor.

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