An application of regression analysis to quantify a claim for increased costs

This paper is a case study of the use of multiple linear regression analysis to quantify a claim for extra payment to a subcontractor for work on a substantial construction earth-moving project. The basis of the claim was that the client and main contractor required the work to be executed in ways other than that originally planned by the subcontractor, reducing efficiency and so increasing costs. The authors of this paper represented the earth-moving subcontractor in a legal arbitration, in which this application of multiple linear regression analysis was fundamental to quantifying the amount claimed in the case. The analysis determined the time required to perform earth-moving tasks, based on a set of explanatory variables, using data sets recorded on-site. The same equation was then applied to the plan of work used for the tender and was used to show that the comparative efficiency between tender and actual was as low as 25%. The claim was successful, and the calculations described in this paper were used to quantify a total additional payment of approximately £;380 000.