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Unabsorbed Overhead Allowed Prior To Commencement Termination-convenience; Overhead

Tuesday, September 02, 2003 05:23 pm

 
Unabsorbed Overhead Allowed Prior To Commencement Termination-convenience; Overhead

The U.S. Court of Appeals for the Federal Circuit has ruled that a contractor may recover unabsorbed home office overhead when a contract is terminated for convenience prior to commencement of the work. And the Eichleay formula, usually required for calculation of such damages, does not apply.

The Army Corps of Engineers awarded a contract to Nicon, Inc. to repair a dormitory building at MacDill Air Force Base in Tampa, Florida. A disappointed bidder on the contract filed a protest. The government told Nicon to take no further action in preparing for contract performance pending resolution of the bid protest. [...]

 
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