Claims for Unabsorbed Overhead on Defense Contracts.
Abstract
This research effort investigated the Allegheny, Carteret, Eichleay, Allied Materials and Equipment Company, A.C.E.S. and Simulation formulas that were used or recommended to determine quantum on unabsorbed overhead claims. These claims arise from contracts that have been delayed by the government. When the government contracting officer and the contractor cannot come to an agreement, there is a claim filed by the contractor to the appropriate board of contract Appeals. These formulas investigated were the product of different claims heard before the appropriate Board of Contract Appeals, with the exception of one, the Simulation formula. The analysis was accomplished by developing very basic examples which portray different aspects of the real world. Three examples were created, each one more extensive than the preceding. Then the true unabsorbed for each example was calculated. By using algebraic equatios, each formula in this form was equated to the true unabsorbed. From this it was shown that the Allegheny and Allied Materials and Equipment Company formulas generally underestimate the true unabsorbed overhead. It also showed that the Eichleay, A.C.E.S. and Simulation formulas generally overestimate true unabsorbed overhead. The Carteret formula did equate to the true unabsorbed overhead in each example, but not all real world situations were covered within this research. At least one more complexity needs to be examined.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1985
- Accession Number
- ADA161710
Entities
People
- Timothy E. Edem
Organizations
- Air Force Institute of Technology