Holloway Consulting is a Construction Consultant and Expert Witness providing services to law firms, public agencies, developers, owners, design professionals, construction managers, general and trade contractors. This page is intended for clients seeking to retain a claims consultant or expert witness to help prepare or rebut a contractor claim for home office overhead:
Claims Consultant – Expert Witness
Construction Home Office Overhead
DID F3d KILL EICHLEAY?
In Melka Marine Ins. V. United States, 187 F.3d 1370 (Fed. Cir. 1999), Melka sought recovery of its unabsorbed home office overhead via the Eichleay calculation for a government-caused delay that took place between November 16, 1994 and March 30, 1995. In October 1994, Melka was awarded a contract by the Department of the Navy to do dredging work on the Potomac River, construct a breakwall and make repairs to an existing ramp and pier. The contract required the Navy to obtain a permit from the Army Corps of Engineers prior to commencement of the dredging and breakwall construction, but not the repair work.
On November 4, 1994, the Navy advised Melka that it had not obtained the permit to allow the dredge work and breakwall construction to proceed, but that the other repair work could proceed. Melka mobilized on November 15 and immediately advised the government that although it would re-sequence its work to avoid any inactivity, its schedule was nevertheless being adversely impacted by the partial suspension of work. Two weeks later on December 1, the Navy informed Melka that the dredging permit was not expected until mid-January to mid-February and, therefore, Melka should take appropriate steps to minimize any costs due to this delay. As a result, Melka demobilized its dredging and breakwater equipment and was able to use it on two other smaller projects it already had under contract by performing these projects earlier than originally anticipated.
Melka essentially completed the repair work on January 4, 1995 and then awaited direction on the remaining dredge and breakwall work. On February 2 the Navy told Melka that this work would not now begin for another 8 months, until October 15. 1995. As a result, the parties agreed on a revised project completion date of February 29, 1996 and Melka was paid the demobilization/remobilization costs associated with the shut-down until October 15 and for its dredging and breakwater equipment for twelve days. The only remaining issue was Melka’s entitlement to unabsorbed home office overhead from November 16, 1994, the date of its initial delay notice, to March 30, 1995.1
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The Holloway Consulting Group, LLC
Construction Home Office Overhead Claims Consultants and Expert Witnesses
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Email: steve.holloway@disputesinconstruction.com
Blog: disputesinconstruction.com
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