In a decision earlier this month, the Armed Services Board of Contract Appeals reiterated that the recovery of unabsorbed home office overhead, based on the Eichleay formula, is for "a stand-by of an uncertain duration." The Board held that where a contractor is entitled to a compensable contract time extension for additional work, the contractor is
Eichleay Formula
Recovering Unabsorbed Home Office Overhead Using the Eichleay Formula
By Timothy Sullivan on
Posted in Contract Performance Issues
The Armed Services Board of Contract Appeals recently reiterated the requirements a contractor must meet in order to recover unabsorbed home office overhead using the Eichleay Formula. In Kato Corporation, ASBCA No. 51462, the Board held that a contractor must establish three elements to successfully maintain a claim for recovery of its…