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Contractors Corner FIND OUTMORE If you are interested in learning more about FIS Benchmarking and Productivity Indices, email info@thefis.org or call the office on 0121 707 0077 The CLC COVID-19 Cost Assessment Toolkit is available for download from http://www. constructionleadershipcouncil. co.uk/ i www.thefis.org 23 The FIS indices In recent weeks we have been working with FIS to look at the viability of producing a collection of indices relating to key activities in the sector. These could build on the Cost Assessment Toolkit launched in recent weeks by the Construction Leadership Council. The starting point was to look at whether indices could be an authoritative measuring tool to facilitate the amicable and fair resolution of disputes due to delays and disruption to the project works, effectively replicating the measured mile approach. Support to develop this index from the sector is encouraging, but it gives us pause to look at the issues from a number of angles. The application of the indices as an authority will be accepted by dispute resolvers but may be limited in its use, for example: • Source data for the studies is not always known and may be anecdotal rather than empirical and viewed as self-serving for industry participants, and • General industry studies provide no guidelines in how to apply factors where multiple causes have been identified. The provision of FIS indices may address these concerns by using the benchmark offered by the COVID-19 outbreak and could allow: • The findings in the post COVID-19 period to be calculated on a quarterly basis to provide almost conclusive analysis of the loss/gains in productivity by demonstrating their clear application and direct relationship to COVID-19 pandemic. The benefit of authoritative indices would mean that: • Dispute resolvers may be more willing to accept the studies as support or rebuttal evidence rather than direct evidence of lost productivity, and • The indices are prepared for the purpose of forward pricing of drylining works and, therefore, are not restricted to hindsight use in claims for lost productivity. Alternatively, a claimant who continues to submit on a total cost basis may not have the level of detail to satisfy any employer enquiry into the intrinsic or extrinsic factors that have caused a loss of productivity, indeed, the time taken to produce and analyse that detail would be significant. The claimant will rely on the clemency of a dispute resolver to satisfy the evidential burden and to plead that there was no other means of measuring the costs other than the submission of total costs. The best placed claimant is one who can justify that the productivity rates used in its tender were reasonable, that the costs that (the claimant) has incurred as a result of a change are not excessive, and that the resulting additional costs were the responsibility of the respondent. When indices are provided and can be tested in the courts or tribunals, they will offer some insight into the true value of loss of productivity claims when reasonable rates and costs submitted are considered both reasonable and not excessive when compared to the indices. Ultimately, the contract prevails, and the contractor must provide evidence in the form of contemporaneous records to present its claim correctly. The benefit would almost certainly extend beyond the COVID era and with further uncertainty on the horizon with Brexit, it could form the basis to revise the use of fluctuation clauses, so often struck out of contracts. I’d like to get more views on this work, but as it stands there are currently no sector-specific indices readily available and there is no doubt this would be a big body of work for FIS, but indices would provide an invaluable method of understanding the intrinsic and extrinsic factors that influence an operative when confronted by a change to its activities or workload. Author Damian James is widely experienced in construction claims and dispute resolution. He has undertaken expert determinations having been appointed in arbitrations and in adjudications. He provides expert opinion and evidence in the area of delay and disruption assessment and quantum/cost evaluation and has prepared and presented expert reports under JCT/FIDIC/ JBCC/bespoke and NEC forms of contract. Planned output/actual output