Federal Circuit Relaxes Government’s Eichleay Burden of Proof

Kegler Brown Construction Newsletter

Under federal law, the three elements of entitlement to unabsorbed overhead under the Eichleay formula are (1) Government caused delay; (2) contractor was required to stand by during the delay; and (3) contractor could not have taken on other jobs during the delay. A decision in 1996 forced the government to prove that the contractor took on other work and absorbed the overhead of the delayed contract. A recent decision for the government stated that this burden was met by the government with a showing that the contractor was able to take on other work, without actually having to show that the contractor in fact found such replacement work. Satellite Electric Co. v. John H. Dalton, 105 F.3d 1418 (Fed. Cir. 1997).