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Suspension Determinacy Questioned In Establishing Standby Requirement For Eichleay

Thursday, October 04, 2007 12:52 pm

Suspension Determinacy Questioned In Establishing Standby Requirement For Eichleay

A court ruled that the existence of a letter indicating a specific time period for a government-ordered contract suspension is not enough to prove that the suspension was for a definite period -- thus opening the door for possible recovery of unabsorbed home overhead expenses under the Eichleay formula (a formula for calculating such expenses based on 60-2 B.C.A. (CCH) P2688 (ASBCA 1960)).

In September 2002, the government awarded Oak Environmental Consultants, Inc. (Oak) a contract to repair naval station housing. After work began, the government suspended the project at its convenience, as allowed by the contract, because of possible plans for demolition and privatization of the property. The letter informing Oak of the suspension described the suspension as being fo [...]

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