Section 12.23 Extended Home Office Overhead

• Library: Construction Law 2016 Supp

6. (§12.23) Extended Home Office Overhead

Contrasted with direct overhead or general conditions costs are those “home office” overhead costs, sometimes called “indirect overhead” or “general and administrative” costs, that are not directly charged to a specific project. For a detailed discussion of the factors and theories underlying recoverability of home office overhead, see Glen M. Darbyshire, Note, Home Office Overhead as Damages for Construction Delays, 17 GA. L. REV. 761 (1983). See also Adrian L. Bastianelli, III & Lori Ann Lange, Recovering Delay Damages for Home Office Overhead/Edition II, CONSTR. BRIEFINGS No. 97-3 (1997).

This area of damages is highly scrutinized because the costs appear to be “soft” and can vary greatly based simply on the accounting methods applied by the contractor. What one contractor may assign to a certain project as a direct overhead cost, another may consider extended home office overhead. The general rule is that home office overhead costs are costs incurred for the mutual benefit of all the contractor’s projects. Typical home office overhead expenses include:

· rent, depreciation, and mortgage payments;

· licenses and fees

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