Section 12.25 Computing Unabsorbed General Overhead Costs Attributable to Delay

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b. (§12.25) Computing Unabsorbed General Overhead Costs Attributable to Delay

Most courts relax the precision required for the quantum of damages once the claimant has established the fact of damages. Havens Steel Co. v. Randolph Eng’g Co., 613 F. Supp. 514 (W.D. Mo. 1985). On that basis, the Eichleay formula, named after a landmark 1960 decision of the Armed Services Board of Contract Appeals, Appeal of Eichleay Corp., ASBCA No. 5183, 60-2 B.C.A. (CCH) ¶ 2688 (1960), has been approved for use by almost all federal contract tribunals and state courts. See:

· J.D. Hedin Constr. Co. v. United States, 347 F.2d 235 (Ct. Cl. 1965);

· PDM Plumbing & Heating, Inc. v. Findlen, 431 N.E.2d 594 (Mass. App. Ct. 1982);

· S. New England Contracting Co. v. State, 345 A.2d 550 (Conn. 1974) (cases rejecting Eichleay are considered aberrations not reflecting realities of construction contracting);

· Golf Landscaping, Inc. v. Century Constr. Co., 696 P.2d 590 (Wash. Ct. App. 1984);

· Broward County v. Russell, Inc., 589 So.2d 983 (Fla. Dist. Ct. App. 1991) (reiterates the fact that state courts are usually more concerned with proof of damages than the manner in which damages are calculated).

See Del-Rio Drilling Programs Inc. v. United States, 146 F.3d 1358 (Fed. Cir. 1998), for a detailed discussion of the elements and evidence necessary to support a claim using the Eichleay formula.

The Eichleay formula allocates extended home office...