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:
Learn the multiple alternatives concerning the pricing of home office overhead which you may employ in contract documents. Register now!
James G. Zack Jr.
James G. Zack Jr. is the Executive Director of the Navigant Construction Forum – the construction industry’s global resource for thought leadership and best practices on avoidance and resolution of construction project disputes globally. Formerly, Executive Director, Corporate Claims Management for Fluor Co... More info
Dr. 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 productivity analyses, construction management, project controls, and claims resolution assistance on a wide varie... More info