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Pricing Delay Costs – How Owners Deal with Home Office & Jobsite Overhead Costs
March 10, 2022 @ 8:00 am - 10:00 am PST
This is one of the few webinars dealing directly with problems related to calculating jobsite overhead delay and extended home office overhead costs. It offers multiple alternatives, which owners may employ in their contract documents. We will discuss:
- recoverability of extended field office overhead costs in the event compensable delay arises on a project.
- various methods of specifying this element of delay damages in contracts to avoid disputes later, should compensable delay occur
- Issues surrounding the recovery of extended or unabsorbed home office overhead
Since 1960, the Eichleay Formula has been used to price extended and/or unabsorbed home office overhead. Most in the construction industry treat this formula as an accounting mechanism – seldom understanding this “formula” as an estimating tool, not an accounting method. Practical problems concerning Eichleay will be identified, and alternatives explained.
Participants will learn:
- issues with pricing of contractor jobsite delay damages
- various methods of calculating extended field office overhead costs
- methods to calculate contractor’s extended or unabsorbed home office overhead costs
- Eichleay Formula, including weaknesses/flaws from accountant/auditor, contractor, owner perspectives
- alternatives to the Eichleay Formula
Instructor: James G. Zack, Jr. is Principal of James Zack Consulting, LLC, a construction claims consultancy dedicated to helping Owners and Contractors complete projects in the field, not arbitration or court. He is a recognized, published expert in mitigation, analysis, and resolution or defense of construction claims and disputes. In his 49-year career, he has been involved in public and private projects throughout the U.S. and 39 countries, working with Owners and Contractors on 5,000+ claims.
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