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Construction Claims Monthly - Devoted exclusively to the problems of construction contracting since 1963

Practical Problems with Pricing Delay Using Eichleay (CCL1301)

  • Product Format
    Pre Recorded Audio Conference
  • Presenter(s)
    James G. Zack Jr. CCM, CFCC, FAACE, FRICS, PMP, Dr. Halligan
  • Conference Date
    Tue, November 12, 2013
  • Length
    90 minutes

Since 1960 the Eichleay Formula has been used to price extended and/or unabsorbed home office overhead. Most of the people in the construction industry treat the Eichleay Formula as an accounting mechanism – seldom understanding that the Armed Services Board of Contract Appeals created this "formula" as an estimating tool, not an accounting method.

There are some practical problems with the Eichleay Formula. From the accounting perspective there are several major flaws built into the formula. From the project owner's perspective, there is a risk of overcompensation unless certain contractual defenses are employed and from the contractor's perspective there are issues with the applicability and the use of the formula.

Join two great minds James G. Zack, Jr., & David W Halligan for a mind-opening audio conference, Practical Problems with Pricing Delay Using Eichleay to get a better understanding of the Eichleay Formula including its weaknesses and flaws from the perspectives of the accountant/auditor, the contractor and the owner.

Here is a taste of what you will learn:

  • The elements of Home Office Overhead (HOOH)
  • How HOOH is typically recovered
  • What is the Eichleay Formula
  • How the Eichleay Formula operates
  • History of the formula
  • Potential problems with using the Eichleay Formula to price delay from the viewpoint of the accountant/auditor, the owner and the contractor
  • Potential remedies including
  • 1. Some ways to prohibit recovery
    2. Ways to change the rules concerning HOOH recovery
    3. Creation of a mid-course HOOH recovery method
    4. Bid daily delay cost

Learn the multiple alternatives concerning the pricing of home office overhead which you may employ in contract documents. Register now!

 

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About the Presenter(s)

 

Jim is the Senior Advisor to the recently formed Ankura Construction Forum™. The Forum strives to be the construction industry’s resource for thought leadership and best practices on avoidance and resolution of construction project disputes globally. Jim was the founder and Executive ...More Info


Dr. HalliganDr. Halligan is an Associate Director in the Global Construction Practice of Navigant Consulting Inc. Dr. Halligan has twenty-three years of experience providing clients with schedule delay analyses, labor product...More Info

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