Practical Problems Pricing Delay Using the Eichleay Formula
Jan 19, 2022
90 Mins
James G. Zack, Jr.
Since 1960 the Eichleay Formula has been used to price extended and/or unabsorbed home office overhead. Most 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. This webinar examines the traditional Eichleay Formula from all three viewpoints to identify the problems and offer some recommendations on how to alleviate them.
The session will provide attendees with a better understanding of the Eichleay Formula including its weaknesses and flaws from the perspectives of the accountant/auditor, the contractor, and the owner. The session will offer attendees 19 different alternatives to the Eichleay Formula which may be employed through incorporation in the contract documents prior to bidding.
Jim is the Principal, James Zack Consulting, LLC and Senior Advisor, Ankura Construction Forum™. The Forum strives to be the construction industry’s resource for thought leadership and best practices on avoidance and resolution of construction project disputes globally. Formerly he was the Executive Director of the Navigant Construction Forum™ and earlier, the Executive Director, Corporate Claims Management Group, Fluor Corporation, one of the world’s largest EPCM contractors. Mr. Zack was previously Vice President of PinnacleOne and the Executive Director of the PinnacleOne Institute and a Senior Construction Claims Consultant for CH2M HILL, Inc. Mr. Zack has, for more than 48years, worked on both private and public projects throughout the U.S. and in 39 countries abroad. Mr. Zack is a Fellow of AACE, Royal Institution of Chartered Surveyors, Guild of Project Controls and Society of Construction Claims Specialists International. In the construction claims field, he is a recognized and published expert in mitigation, analysis and resolution or defense of construction claims and disputes. Mr. Zack is a Certified Construction Manager (CCM), a Certified Forensic Claims Consultant (CFCC), an Expert Certified Construction Claims Specialist (ECCCS), an Expert Certified Construction Delay Analyst (ECCDA) and a Project Management Professional (PMP).
Recorded Webinar -
Pacing Delay – The Practical Effects on Construction Projects & Delay Claims
567 Oaklynn Ct, TB, Pittsburgh, PA 15220
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