RESPONDENT’S MOTION FOR PARTIAL SUMMARY
JUDGMENT GRANTED IN PART, DENIED IN PART:
March 9, 2022
CBCA 6597
ACTIVE CONSTRUCTION, INC.,
Appellant,
v.
DEPARTMENT OF TRANSPORTATION,
Respondent.
Terry R. Marston II of Marston Legal, PLLC, Kirkland, WA, counsel for Appellant.
Rayann L. Speakman, Office of the Chief Counsel, Federal Highway Administration,
Department of Transportation, Vancouver, WA, counsel for Respondent.
Before Board Judges LESTER, VERGILIO, and GOODMAN.
Opinion for the Board by Board Judge LESTER. Board Judge VERGILIO concurs.
LESTER, Board Judge.
The Federal Highway Administration (FHWA) has filed a motion for partial summary
judgment on two damages issues in this construction delay case. Specifically, the FHWA
asks us to find that, even if appellant, Active Construction, Inc. (ACI), were to prevail on its
argument that the Government is responsible for delays that entitle ACI to an equitable
adjustment, ACI is precluded as a matter of law from recovering extended field office
overhead as a direct cost and from recovering extended home office overhead using the
formula set forth in Eichleay Corp., ASBCA 5183, 60-2 BCA ¶ 2688. With regard to

CBCA 6597 2
extended field office overhead, the FHWA asserts that ACI is using an accounting practice
and allocation method for field office overhead in its claim that are inconsistent with the
practice and method that it used throughout contract performance, which the FHWA
contends ACI cannot do. With regard to extended home office overhead, the FHWA asserts
that, because such overhead is available under theEichleay formula only for periods of work
stoppage or suspension, neither of which (the FHWA alleges) occurred during contract
performance, Eichleay damages are unavailable to ACI.
Because Federal Acquisition Regulation (FAR) 31.105(d)(3) (48 CFR 31.105(d)(3)
(2014))1 requires a contractor consistently to treat extended field office overhead costs as
either direct costs or indirect costs under a contract, we grant the FHWA’s motion for partial
summary judgment insofar as it seeks to preclude ACI, which consistently allocated field
office costs as indirect costs throughout contract performance, from now attempting to
recover them as direct costs. Because factual disputes that the Board will have to resolve
through a hearing affect whether ACI qualifies for extended home office overhead expenses
under the Eichleay formula, we deny the FHWA’s motion on ACI’s extended home office
overhead claim.
Background
On March 12, 2014, the FHWA’s Western Federal Lands Highway Division awarded
to ACI a firm-fixed-price contract for just under $15 million to reconstruct approximately
9.7 miles of Middle Fork Road in King County, Washington. The contract incorporated
standard contract clauses from the Federal Acquisition Regulation (FAR), including the
Changes clause at FAR 52.243-4. In addition, in the Standard Specifications for
Construction of Roads and Bridges on Federal Highway Projects, FP-03, incorporated into
the contract, section 109.06, titled “Pricing of Adjustments,” required the parties to
“[d]etermine all costs [in equitable adjustments] according to the cost principles and
procedures of FAR Part 31” and to “[f]ollow the requirements of all FAR clauses providing
for an equitable adjustment.” Appeal File, Exhibit 3 at 48.2
During contract performance, ACI attached markups of 7.42% for home office
overhead and 5.99% for field office overhead to change order and contract modification
requests, treating both sets of costs as indirect costs. Exhibit 137-001 at 7, 11-15, 17-105;
see Exhibit 48-13 (accepting overhead rates as reasonable). Numerous bilateral contract
1 For purposes of this decision, we cite to and will rely on the version of the FAR
that was in effect when the contract was awarded.
2 Unless otherwise noted, all exhibits are found in the appeal file.

CBCA 6597 3
modifications negotiated based upon ACI’s cost proposals were executed during contract
performance.
The original contract completion date was August 31, 2016, but ACI did not complete
performance and demobilize from the site until July 7, 2017.
On November 18, 2018, ACI certified a claim to the FHWA contracting officer
seeking damages for 310 days of alleged Government-caused delay. Exhibit 9-2. ACI
asserted in its claim that it had encountered numerous differing site conditions and
Government-caused delays that affected performance, that the FHWA had not provided
appropriate responses to requests for assistance, and that the collective result of all changes
on the project was extreme disruption of the planned sequence and orderly performance of
the work, which, taken together, delayed completion of the project from August 31, 2016,
to July 7, 2017. In its claim, ACI requested payment of the following costs:
(1) $3,110,103 for unresolved change requests. See Exhibit 9-1 at 199, 204,
208-11. Each of its unresolved change request claims includes an indirect cost
markup for field office overhead (usually 5.99%, although sometimes 6.19%)
and an indirect cost markup for home office overhead (usually 7.42%). See,
e.g., Exhibits 80-1, 83-11, 96-7, 110-3, 114-1, 121-2.
(2) $2,136,910 in labor inefficiency costs arising from the alleged cumulative
impact of labor and equipment inefficiencies, which ACI calculated by
identifying a total man-hour loss of 21,733 hours and multiplying it by an
average composite daily labor rate of $98.33. Exhibit 9-1 at 199-200, 204-05.
ACI calculated the $98.33 composite daily labor rate by calculating a
composite daily rate of $61.97 for job trade labor, $26.43 for Type 5 and 6
equipment, and $4.37 for Type 8 equipment before adding $5.56 as a 5.99%
indirect cost markup for field overhead. Id. at 206.
(3) $688,347 as a direct cost for extended field office overhead (calculated by
multiplying a daily rate of $2222.48 by 310 days of alleged delay). Exhibit
9-1 at 201, 204, 212-13.3
3 ACI identifies the claim amount for extended field office overhead as $822,914
on one page on its claim, Exhibit 9-1 at 201, but we presume this figure was either identified
in error or encompasses markups that were not identified.

CBCA 6597 4
(4) A home office overhead markup of 7.42% on the claimed amounts for labor
inefficiency costs and the extended field office overhead, which, in ACI’s
claim summary, totaled $209,634. Exhibit 9-1 at 198, 204.
(5) $306,936 for extended home office overhead, purportedly calculated in
accordance with the Eichleay formula. Exhibit 9-1 at 201, 204, 214. 4
(6) $272,548 in consultant fees. Exhibit 9-1 at 202, 204, 215.
ACI’s total claim, inclusive of a profit markup and a bond and state taxes line item, was
identified as $7,101,818. Exhibit 9-1 at 202, 204.
On August 16, 2019, the FHWA contracting officer issued a 279-page decision
addressing each of ACI’s unresolved change order arguments and ultimately finding ACI
entitled to payment of $297,923.36, plus interest. Exhibit 10 at 278. That figure
encompassed payment for some of the unresolved change orders that ACI had identified, a
5.03% markup for field office overhead on those change orders, another markup for home
office overhead that ranged from 6.02% to 6.54% (depending on the year in which costs were
incurred), and a 10% profit markup. Id. at 4, 278. The contracting officer denied in their
entirety ACI’s requests for extended field office overhead as a direct cost, for extended home
office overhead under Eichleay, and for labor and equipment inefficiency costs. Id. at 278.
ACI elected not to accept the contracting officer’s decision and filed its notice of
appeal with the Board on September 9, 2019. Since then, the parties have engaged in
extensive discovery, and discovery disputes between the parties are still being resolved.
On November 5, 2021, the FHWA filed a motion for partial summary judgment
through which it seeks to preclude ACI from pursuing two damages issues. First, the FHWA
argues that, because ACI had chosen during contract performance to treat extended field
office overhead costs as indirect costs, FAR 31.105(d)(3) bars it from changing cost
accounting practices now and claiming them as direct costs, particularly since, in its claim,
it has extended field overhead markups added to each of its claimed direct costs. Second, the
FHWA argued that, as a matter of law, ACI cannot recover extended home office overhead
costs under Eichleay in this case.
4 On one page of its claim, ACI identifies $341,593 as the amount of itsEichleay
claim, Exhibit 9-1 at 201, but, given that ACI consistently lists $306,936 as the proper
amount elsewhere in its claim, we presume that one reference to $341,593 was in error.

CBCA 6597 5
Discussion
Standard for Partial Summary Judgment
Pursuant to Board Rule 8(f), “[a] party may move for summary judgment on all or part
of a claim or defense.” 48 CFR 6101.8(f) (2020). “Partial summary judgment, at the request
of a party, is appropriate if there is no genuine issue as to any material fact (a fact that may
affect the outcome of the litigation) regarding the issue at hand and the moving party is
entitled to judgment as a matter of law.”Mayberry Enterprises, LLC v. Department of
Energy, CBCA 5961, 20-1 BCA ¶ 37,616. The Government, as the moving party, bears the
burden of demonstrating the absence of genuine issues of material facts. Id.
Field Office Overhead
The general rule is that “a contractor can recover extended [field office] overhead as
damages for government-caused delay.”K-Con Building Systems, Inc. v. United States, 107
Fed. Cl. 571, 597 (2012); see George Sollitt Construction Co. v. United States, 64 Fed. Cl.
229, 242 (2005) (“Extended field office overhead also may sometimes be recovered as delay
damages.”). The FHWA does not challenge that general rule. Its complaint here is that ACI
is attempting to recover field office overhead as a direct cost item when, over the course of
contract performance, it treated field office overhead as an indirect cost, recovering it
through a percentage markup to change orders. The FHWA argues that ACI’s change in
accounting practice violates FAR 31.105(d)(3), framing its argument as follows:
By applying a Field Office Overhead markup . . . on negotiated contract
modifications and change requests, ACI recovered its field office/job site
overhead as a percentage markup on its direct costs. If ACI is successful in its
appeal of the 53 unresolved change requests, it will continue to recover its
field office/job site overhead as a percent markup on its direct costs. The job
site cost principle at FAR 31.105(d)(3) expressly authorizes a contractor to use
this allocation method by charging these costs indirectly (as a percent markup
on direct costs) as ACI did throughout the project and within its certified
claim, but FAR 31.105(d)(3) requires that the accounting practice is
consistently followed. In its certified claim, ACI now attempts to use a
different allocation method to recover its field office/job site overhead by
switching from its percentage markup on direct costs distribution method to
a time distribution base (per diem rate), and furthermore ACI now claims both
methods of quantification simultaneously. FAR 31.203 does not allow a
contractor to switch between a percentage markup on direct costs distribution
base and a time distribution base (per diem rate).

CBCA 6597 6
Respondent’s Motion for Partial Summary Judgment at 6 (citations omitted).
FAR 2.101 defines a direct cost as “any cost that is identified specifically with a
particular final cost objective” and provides that “[c]osts identified specifically with a
contract are direct costs of that contract.” The FAR defines an indirect cost as “any cost not
directly identified with a single final cost objective” – in the circumstances here, a specific
contract – “but identified with two or more final cost objectives or with at least one
intermediate cost objective.”Id. If a contractor is working only one contract at a particular
job site, “any field office overhead costs incurred on [that] contract, [at that] job site, are in
reality direct costs” of performing that contract.Watts Constructors, LLC, ASBCA 59602,
15-1 BCA ¶ 35,873; see 2 Karen L. Manos, Government Contract Costs & Pricing§ 87:24
(2d ed. 2009) (“Job site overhead costs, which are also sometimes referred to as field office
overhead costs, are not really ‘overhead’ costs at all (unless the contractor happens to be
performing two or more contracts at the same job site). They are direct costs of performing
a construction . . . contract at that site.”).
Nevertheless, FAR 31.105(d)(3), which applies to construction contracts like this one,
gives contractors the option of treating costs incurred at a job site, also known as field office
costs, as either direct costs or indirect costs, but it makes clear that the contractor must
maintain consistency in whichever accounting practice it chooses:
Costs incurred at the job site incident to performing the work, such as the cost
of superintendence, timekeeping and clerical work, engineering, utility costs,
supplies, material handling, restoration and cleanup, etc., are allowable as
direct or indirect costs, provided the accounting practice used is in accordance
with the contractor’s established and consistently followed cost accounting
practices for all work.
48 CFR 31.105(d)(3) (2014). Applying this provision, “contractors may charge [field office]
overhead costs either directly (per diem) or indirectly (percentage), as long as they are
charged consistently.”Watts Constructors; see Defense Contract Audit Agency Contract
Audit Manual 7640.1, § 12-802.4(b) (Jan. 2015) (“Job site/field overhead costs are allowable
as direct or indirect costs provided the costs are charged in accordance with the contractor’s
established accounting system and consistently applied for all contracts (FAR
31.105(d)(3)).”).
Here, during contract performance, ACI elected to treat its field office overhead
expenses as indirect costs and to recover them when there were contract changes through a
markup added to direct cost charges that were then paid through contract modifications. In
the claim now before the Board, ACI continues to allocate field office overhead as an indirect
cost in some instances (those involving unresolved change order requests and labor and

CBCA 6597 7
equipment inefficiencies resulting from delays) but also seeks to recover field office
overhead as an independent direct cost. FAR 31.105(d)(3) precludes that type of inconsistent
treatment. ACI had the right under FAR 31.105(d)(3) to elect to allocate field office
overhead as either direct costs or indirect costs. Once it elected to view them as indirect
costs, it was bound to act consistently with that election.
That limitation is further supported by FAR 31.202(a), which, in addressing what
costs can be charged as direct, provides that, once costs “have been included in any indirect
cost pool to be allocated to . . . any [particular] final cost objective,” “other costs [later]
incurred for the same purpose in like circumstances” cannot be reallocated as a direct cost.
FAR 31.202(a). Similarly, FAR 31.203(d) provides that, “[o]nce an appropriate base for
allocating indirect costs has been accepted, the contractor shall not fragment the base by
removing individual elements” and move them into a direct cost pool.
In M.A. Mortenson Co. , ASBCA 40750, et al., 98-1 BCA ¶ 29,658, the Armed
Services Board of Contract Appeals (ASBCA) recognized that FAR 31.203(d)(3), when
applicable, prohibits a contractor from doing exactly what ACI is trying to do here – use
more than one accounting practice for recovery of field office overhead. InM.A. Mortenson,
the contractor used a direct cost per diem method (with a daily field overhead rate) when
claiming job site overhead for changes and delays that increased the contract performance
period, but it attempted to use an indirect cost percentage markup for changes that did not
affect the contract performance period. The ASBCA found that the contractor’s attempt to
allocate some field office overhead costs as indirect was inconsistent with the contractor’s
normal direct cost per diem practice and violated the FAR requirement.
Appellant’s job site overhead claims must be denied because they violate the
requirement of the FAR cost principles for the use of one distribution base for
allocating a given indirect cost pool.
FAR 31.203, “Indirect costs,” subparagraph (b), requires grouping of indirect
costs “so as to permit distribution of the grouping on the basis of the benefits
accruing to the several cost objectives,” and then selection of “adistribution
base common to all cost objectives to which the grouping is to be allocated”
(emphasis added). In our view, this reference to “a distribution base” requires
use of a single distribution base for allocating a given overhead pool to cost
objectives (such as changes). A contractor may choose any acceptable
distribution base for allocating its job site overhead pool to particular cost
objectives, but not more than one. We hold that appellant’s practice of
switching between a time distribution base (per diem rate) and a direct cost
distribution base (percentage markup) for allocating job site overhead costs to
changes, depending on whether a time extension was involved, on its face

CBCA 6597 8
violated the FAR requirement for a single distribution base for allocating a
given overhead pool.
Id.
ACI argues that “[t]he board inM.A. Mortenson was not presented with and did not
rule on facts comparable to those here where, because the claim is a pure delay claim with
no direct cost component, [i]t would be impossible to use a percentage rate . . . because there
are no direct costs to apply it to.” Appellant’s Memorandum in Opposition to Government’s
Motion for Partial Summary Judgment at 1-2. Even if that were a sufficient reason to evade
FAR 31.105(d)(3), which it is not, ACI is ignoring the fact that, on the more than $2 million
in labor and equipment inefficiency costs that it is seeking, it has added a 5.99% field office
overhead markup. ACI has also included 5.99% (or greater) field office overhead markups
in all of its unresolved change payment requests. It is impossible to see how ACI’s effort to
recover its field office overhead both as a direct cost of delay and as an indirect cost markup
to its other delay costs is anything other than double-counting. Pursuant to FAR
31.105(d)(3), ACI had to choose how to treat its field office overhead, and, during contract
performance, it chose to treat it as an indirect cost. FAR 31.105(d)(3) and the other cost
principles at FAR 31.202 and 31.203 preclude ACI from changing that election now.
ACI also asserts that, unlike in M.A. Mortenson, it is pursuing not only a changes
claim but also a suspension of work claim, and it argues that different kinds of claims
warrant different accounting practices and cost allocation methods. As an initial matter, we
note that nowhere in ACI’s lengthy certified claim or in its complaint does ACI ever mention
that it is pursuing a claim under the Suspension of Work clause. Both the certified claim and
the complaint focus exclusively on alleged changes caused by delays or differing site
conditions for which the FHWA is allegedly responsible. In any event, ACI’s argument that
it should be allowed to treat field office overhead costs as indirect costs on its changes claim
and as direct costs when seeking damages under a different but related theory ignores the
rationale underlying M.A. Mortenson and, more importantly, is inconsistent with FAR
31.105(d)(3) itself. Were we to adopt the rule that ACI advocates, it would seem virtually
impossible to maintain any kind of consistency in the contractor’s allocation bases and to
preclude the type of double-counting that seems prevalent in ACI’s current claim.
Finally, to the extent that ACI suggests that it is unfair to limit its ability to treat field
office overhead as a direct cost now, it ignores the benefits that it gained by electing to treat
field office overhead as an indirect cost throughout contract performance. “[T]reatment as
a direct cost would [have] require[d] the contractor to substantiate its job site overhead
expenses ‘change-by-change,’” rather than just being able to add a simple percentage markup
to other direct costs.Caddell Construction Co., ASBCA 53144, 02-1 BCA ¶ 31,850 (quoting
M.A. Mortenson ). “Moreover, if field office overhead were treated as direct costs, a

CBCA 6597 9
contractor often could not expect any significant recovery for change orders that did not
extend contract performance because field office overhead expenses . . . tend to be fixed
costs which do not increase in the absence of a time extension.”Id. By electing to treat its
field office overhead as an indirect cost throughout contract performance, ACI eliminated
the burden of having to prove impact on overhead for each change and was able instead to
apply indirect cost markups to changes that, had field office overhead been viewed as a direct
cost, it might not otherwise have been able to recover. ACI’s current argument about
inequity is unpersuasive and, in any event, does not change the regulatory requirement.
We grant the FHWA’s motion for partial summary judgment to preclude ACI from
recovering field office overhead as a direct cost. ACI may continue to apply a field office
overhead markup to the direct cost claims that it is asserting in this appeal.
ACI’s Request for Home Office Overhead
“Home office overhead costs are those [costs] that are expended for the benefit of the
whole business, which by their nature cannot be attributed or charged to any particular
contract.”Altmayer v. Johnson , 79 F.3d 1129, 1132 (Fed. Cir. 1996). Because FAR
31.105(d)(3) is limited to field office overhead costs, it does not apply to or control the
accounting of extended home office overhead. Manos, supra, § 87:24.
“Generally, a contractor recovers [home office overhead as] indirect costs by
allocating a proportionate share to each of its contracts.”Nicon, Inc. v. United States, 331
F.3d 878, 882 (Fed. Cir. 2003);see Manos, supra, § 87:24 (“Home office overhead is almost
always an indirect cost (unless the contractor has only one contract), and expressed as a
[general and administrative (G&A)] rate or other indirect cost rate.”). “However, when the
government causes a delay or suspension of performance, this ‘decreases the stream of direct
costs against which to assess a percentage rate for reimbursement,’” such that a portion of
the home office overhead remains “unabsorbed.”Nicon, 331 F.3d at 882 (quoting C.B.C.
Enterprises, Inc. v. United States, 978 F.2d 669, 671 (Fed. Cir. 1992)). TheEichleay formula
“is used to ‘equitably determine allocation of unabsorbed overhead to allow fair
compensation of a contractor [for its home office overhead expenses resulting from]
government delay.’”Nicon, 331 F.3d at 882 (quotingWickham Contracting Co. v. Fischer,
12 F.3d 1574, 1578 (Fed. Cir. 1994)).
Eichleay is viewed as “an extraordinary remedy.”West v. All State Boiler, Inc., 146
F.3d 1368, 1377 (Fed. Cir. 1998). As a result, “[b]efore using theEichleay formula to
quantify an amount of damages, the contractor must meet certain strict prerequisites for the
application of the formula.”Nicon, 331 F.3d at 883. The concept underlyingEichleay is that
it is impractical for a contractor to “obtain[] replacement work or reduc[e] home office
overhead when it must ‘standby’ during an ‘uncertain’ period of government-imposed

CBCA 6597 10
delay.”Mech-Con Corp. v. West , 61 F.3d 883, 886 (Fed. Cir. 1995). Accordingly, to
establish a prima facie case in support of anEichleay recovery, a contractor must show that
there was “a government-caused delay of uncertain duration,” that “the delay extended the
original time for performance” or precluded the contractor from finishing earlier than
scheduled, and that “the contractor [was] on standby and unable to take on other work during
the delay period.”Nicon, 331 F.3d at 883. The burden of production then shifts to the
Government “to show either that it was not impractical for the contractor to obtain
‘replacement work’ during the delay, or that the contractor’s inability to obtain or perform
replacement work was caused by a factor other than the government’s delay.”Id. “If the
government shows that the contractor was able to handle other work – whether or not it
actually did so, which may have depended upon circumstances other than the delay – it
refutes the underlying fact on whichEichleay damages are based.”Satellite Electric Co. v.
Dalton, 105 F.3d 1418, 1423 (Fed. Cir. 1997).
In its motion for partial summary judgment, the FHWA challenges ACI’s ability to
meet two specific, though related, prerequisites for recovery under the Eichleay formula.
First, the FHWA argues that “Eichleay damages are limited only to periods for which a
contractor is on standbybecause of work stoppage or suspension of work, not times in which
it was on the job performing the original and additional contract work.” Respondent’s
Motion for Partial Summary Judgment at 7 (emphasis added). Because there was no
complete work stoppage or suspension during contract performance, the FHWA argues,
Eichleay is automatically unavailable. Yet, the Federal Circuit in Altmayer expressly held
that “[t]here is no requirement that a contract be suspended before a contractor is entitled to
recover under Eichleay.” 79 F.3d at 1134. It recognized that “an extended project – like a
suspended project – may result in reduced income vis-a-vis overhead costs” and provide the
same type of home office overhead allocation loss as a suspended contract. Id. (quoting
Williams Enterprises v. Sherman R. Smoot Co., 938 F.2d 230, 235 (D.C. Cir. 1991));see Roy
McGinnis & Co. , ASBCA 49867, 01-2 BCA ¶ 31,622 (allowing contractor to recover
unabsorbed home office overhead even though it performed contract work during the
Government-caused delay where its performance, though not suspended, was “significantly
interrupted”). We recognize that the Federal Circuit later clarified the holding inAltmayer
to require that the delay creating the extension must effectively act like “a suspension,
whether formal or functional, of all or most of the work on the contract,”P.J. Dick Inc. v.
Principi, 324 F.3d 1364, 1373 (Fed. Cir. 2003), and that it can be difficult to determine,
when reviewing all of the Federal Circuit’s guidance on the availability ofEichleay, the exact
degree of delay and disruption necessary to find a “functional” suspension. Nevertheless,
the factual record before us is sufficiently disputed to preclude us from deciding in the
FHWA’s favor on summary judgment on this issue.
The second basis of the FHWA’s motion for partial summary judgment onEichleay
is that ACI was performing “additional contract work” during any periods of delay that

CBCA 6597 11
should be viewed as absorbing ACI’s home office overhead, renderingEichleay unavailable.
If ACI was able to find replacement work (which could have been through change orders
adding work to this contract or other work outside the context of this contract) during periods
of constructive suspension or delay, that would mean that there was another revenue stream
to which ACI could temporarily have assigned the home office overhead expenses at issue
here, which, as the FHWA argues, would render Eichleay relief unnecessary. Nicon, 331
F.3d at 883. The FHWA finds support for its assertion that ACI was able to find additional
work in a declaration that ACI provided from its expert witness:
ACI was constructively suspended throughout the 310 day period because the
only work it was able to perform related to either disputed changed contract
work, undisputed changed contract work, or original base contract work
dependent upon the completion of the changed work.
Declaration of Bruce Blake (Nov. 22, 2021) ¶ 53. Yet, the record here does not tell us what
additional work ACI was performing or whether the additional work was sufficient to be
viewed as “replacement” work. The Federal Circuit has made clear that “the appropriate
inquiry [in analyzing whetherEichleay is available] is whether . . . [the contractor] was able
to take on ‘replacement work,’ not just any additional work.”Melka Marine, Inc. v. United
States, 187 F.3d 1370, 1377 (Fed. Cir. 1999); see All State Boiler , 149 F.3d at 1137 n.2
(“[A]dditional work is not automatically considered replacement work which would preclude
recovery under the Eichleay formula.”). Further, the replacement work has to be sufficient
“to compensate for the disruptive effect” of any Government-caused suspension.Alderman
Building Co., ASBCA 58082, 20-1 BCA ¶ 37,613. If the contractor is performing “some
work” on “minor items” susceptible to prompt completion, that might not be sufficient to
absorb all of the home office overhead originally allocated to the delayed or suspended work
or to preclude the application of Eichleay. Altmayer, 79 F.3d at 1134.
ACI’sEichleay request is inherently tied to its fact-intensive construction delay
claims, which, given their fact-based nature, are understandably not a part of the FHWA’s
summary judgment motion. The Board therefore does not have a sufficiently detailed factual
record to rule upon ACI’sEichleay claim. Resolution of ACI’s Eichleay request will have
to await a more fulsome factual development of those claims at a hearing.
The FHWA does not in its motion ask us to address ACI’s other home office overhead
claim – ACI’s attempt to recover home office overhead through markups to its labor
inefficiency and extended field office overhead claims. Having now reviewed that claim,
though, we note that the Federal Circuit has made clear that Eichleay “is the exclusive
formula for the calculation of damages for unabsorbed overhead due to a period of
government-caused delay in situations in which contract performance has begun.”Nicon,

CBCA 6597 12
331 F.3d at 888. The parties can address in future proceedings the extent to which ACI’s
home office overhead indirect cost markups are consistent with that direction.
Decision
For the foregoing reasons, we GRANT IN PART the FHWA’s motion for partial
summaryjudgment to preclude ACI from recovering extended field office overhead expenses
as direct costs, rather than as indirect cost markups to its direct cost claims. We DENY IN
PART the FHWA’s motion for partial summary judgment on ACI’s request for extended
home office overhead expenses under Eichleay.
Harold D. Lester, Jr.
HAROLD D. LESTER, JR.
Board Judge
I concur:
Allan H. Goodman
ALLAN H. GOODMAN
Board Judge
VERGILIO, Board Judge, concurring.
I concur in the result, but with a simplified explanation. The standards of summary
judgment review are well-established, not contested, and here applied.
ACI consistently has treated field office costs as indirect costs. Federal Acquisition
Regulation (FAR) 31.105(d)(3) (48 CFR 31.105(d)(3) (2014)) requires a contractor to treat
such costs as either direct costs or indirect costs under a contract. ACI is precluded from
recovering these costs as direct costs. I grant FHWA’s request for summary judgment on this
issue. However, as the agency seems to recognize, this result does not preclude the
contractor from obtaining an appropriate mark-up on its claims as indirect costs.
Regarding the recovery of unabsorbed overhead, FHWA has not demonstrated that
factually or legally the contractor is precluded from recovering such costs that it incurred.
Changes, suspensions, and delays do not absolve an agency from providing relief available

CBCA 6597 13
under the contract. The contractor is entitled to present its case; I deny this aspect of the
agency’s motion.
Joseph A. Vergilio
JOSEPH A. VERGILIO
Board Judge