Formula for Use in Unabsorbed Overhead Claims in Government Contracts

摘要

This thesis is a continuation of the research conducted by First Lieutenant Timothy Edem in 1985. While Edem's research studied the accuracy of a variety of formulas, this thesis concentrated on development of a new formula and its comparison to the two most popular formulas currently in use, the Allegheny and the Eichleay. The goal of this research was to develop a formula for use in unabsorbed overhead claims that would equitably determine the government's liability. The formula development was based on the contract law principle of making the injured person whole. It was using this principle that the government's share of delay period overhead was determined. The analysis and formula development were conducted in much the same manner as Edem's. Simple examples of possible real world situations were used to develop and evaluate the Fair Share Formula, as the new formula is called, and the results compared to solutions using the Allegheny and Eichleay Formulas. Edem's findings concerning the Allegheny Formula were validated here, however, his findings concerning the Eichleay Formula, while generally valid, were not completely valid.