Extended Home Office Overhead Calculation

Extended home office overhead is calculated as a fixed percentage markup of costs incurred during the contract time extension.

Extended home office overhead calculation. Our sample calculation of home office overhead damages follows. Unabsorbed home office overhead is also a well known but not well understood delay damage and like extended field overhead is only caused by a critical project delay. For a discussion on the eichleay formula and the recovery of unabsorbed home office overhead see our earlier article. Abstract since 1960 the eichleay formula has been used to price extended and or unabsorbed home office overhead.

The eichleay formula is one of the most used calculations when computing home office extended overhead costs or damages in construction delay claims construction delay claims about extended overhead are among the most complicated claims and almost always require the services of an expert to both determine damages and how those costs can be recovered. This project s allocable overhead. Kemmons wilson inc asbca no. 29848 85 1 bca 17 858 1985.

Job site overhead a well recognized method of proving extended job site overhead is to derive a daily rate by dividing the total job site overhead costs by the total number of days of performance and then multiplying the daily rate by the number of days of delay. Recoverable home office overhead. Actual period 37 156 795 planned contract duration 365 calendar days cd s actual duration 655 cd s extended duration 290 cd s owner caused delay 235 cd s planned overhead profit at bid 7 0 normal home office overhead 4 5 actual home office overhead 5 3. Shirley contracting corp asbca no.

Unabsorbed home office overhead based on current court rulings at the federal level there is now a clear distinction between extended and unabsorbed hooh as follows. 3 first the overhead allocable to the contract was deter mined by multiplying the total overhead by a ratio of the. Home office overhead costs are costs that are incurred to support the work but are not directly chargeable to a specific project. Halligan phd p e 3 navigant consulting inc.

The contractor s home office overhead during this period totaled 250 000. Formula was the exclusive formula to use to calculate home office overhead damages when the eichleay prerequisites were met. 55197 55248 october 4 2007. The duration of this project including delays totals 265 days.

Home office overhead damages. 16167 72 2 bca 9689. Zack jr ccm cfcc faacei frics pmp2 david w. Fru con construction corporation asbca no.

Total overhead profit. Most in the construction industry treat the eichleay formula as an. Extended hooh stands for the proposition that for every day of owner caused delay the owner owes the contractor hooh based on a rate derived from one of the.