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Article Date: 06/19/2015


Recovery of Unabsorbed Overhead Required Proof of Standby


Although unabsorbed home office overhead may be recovered even though contract performance never commenced, and formulas other than the Eichleay formula may be used in those situations, a contractor still must prove the basic prerequisites to recovery. When a contractor was never forced to stand by for immediate commencement of the work, the contractor was not allowed to recover unabsorbed overhead using any formula.

 

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