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24 Pub. Cont. L.J. 319 (1994-1995)
The Eichleay Formula: A Resilient Means for Recovering Unabsorbed Overhead

handle is hein.journals/pubclj24 and id is 331 raw text is: The Eichleay Formula: A Resilient Means For Recovering Unabsorbed Overhead MICHAEL W. KAUFFMAN AND CRAIG A. HOLMAN* I. Introduction 319 II. Unabsorbed and Extended Overhead Defined 320 III. Origin and Evolution of the Eichleay Formula 322 IV. Applying the Eichleay Formula 325 A. The Eichleay Prerequisites 325 1. Government-Caused Delay 326 2. The Standby Test 327 3. Mitigation of Damages 328 B. Establishing the Eichleay Overhead Pool 329 C. Documenting the Delay Damages 331 D. A Sample Eichleay Formula Application 332 V. Exclusivity of the Eichleay Formula 333 VI. Exceptions to Applying the Eichleay Formula 335 A. Lack of Scheduling Uncertainty 335 B. Timely Contract Completion 336 C. Substantial Contract Completion 337 VII. Arguments Against the Eichleay Formula 339 VIII. Conclusion 340 I. Introduction The courts and boards of contract appeals have permitted contractors to recover unabsorbed overhead arising from government-caused delay for over fifty years.' Throughout that course of time, the courts and boards have strug- gled to determine the prerequisites to such a recovery, as well as how to cal- culate the amount of the recovery. While most tribunals have intuitively sensed the equity of permitting the recovery of unabsorbed overhead, few have settled on a consistent and fair approach. *Messrs. Kauffman and Holnan practice with the Washington, D.C., law firm of Riley & Artabane, P.C. Both concentrate in all aspects of federal procurement law. 1. See Herbert M. Baruch Corp., Ltd. v. United States, 93 Ct. Cl. 107 (1941). 319

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