Key takeaways
- Prolongation cost belongs to the period of delay actually established, not to the whole overrun.
- Disruption and prolongation are different heads of claim and should never be blended into one number.
- Formula-based head office overhead recovery is a fallback, not a starting point.
Start from the established time
Quantum follows causation. If the delay analysis establishes eleven weeks of critical delay attributable to the other party, the prolongation cost is the time-related cost incurred in that specific period, evidenced from the accounting record.
Pricing the entire overrun and then arguing about attribution afterwards is the fastest way to have a whole submission treated as opportunistic.
Separating the heads of claim
Delay and disruption are different phenomena with different proof requirements, and combining them obscures both.
- Prolongation — time-related site cost during the established delay period: supervision, site establishment, plant standing, insurances, bonds
- Disruption — loss of productivity on work that was performed less efficiently, proved through measured mile or a comparable technique
- Acceleration — cost of mitigating measures, whether instructed or constructive, with the instruction or the practical compulsion evidenced
- Finance and interest — as the contract and the applicable law allow
- Head office overhead and profit — the head most often overstated and least often substantiated
The overhead argument, handled honestly
Formulae such as Hudson, Emden and Eichleay exist because proving unabsorbed head office overhead directly is difficult. They are not a licence to skip the attempt. Where the contractor's accounts can show under-recovery of overhead during the delay period, or a demonstrable opportunity that was foregone, that evidence carries far more weight than a formula applied to a contract value.
We use a formula only where the direct evidence genuinely is unavailable, we say plainly that it is a fallback, and we show the sensitivity of the result to its assumptions.
What makes quantum survive scrutiny
Every figure should be traceable to a source document in one step: a ledger extract, a payroll record, an invoice, a plant hire schedule. A reviewer who can follow the arithmetic without asking a question is a reviewer who will engage with the substance.
We build quantum so the other side's expert can reproduce it. Anything that cannot be reproduced will be discounted, and discounting is worse than presenting a smaller, solid number.
Written by Elite Analytics Claims Practice. For advice on a specific project or claim, get in touch.
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