For years, owners and contractors have battled over whether extended home office overhead is recoverable for project delays, and if so, how to best measure it.
Our firm has successfully represented contractors in recovering extended home office overhead for project delays – even on non-ODOT jobs – utilizing ODOT’s well-accepted HOOP formula. Our firm has recovered these damages in three court of claims cases and upheld those awards on appeal. Some examples:
J&H Reinforcing & Structural Erectors, Inc. v. Ohio School Facilities Comm., 2013-Ohio-3827, 2013 WL 4779008 at ¶106 (Ohio App. 10th 2013).
- Holding that the “Eichleay formula is discretionary” and thus “the referee acted within its discretion in applying a formula rather than the Eichleay formula in calculating home office overhead damages”
Wood Electric, Inc. v. Ohio School Facilities Construction Comm., 2017-Ohio-2743 90 N.E.3d. 371 at ¶36 (Ohio App. 10th 2017)
- Affirming the trial court’s use of the HOOP formula when calculating overhead damages caused by delays
A Hamilton County Court of Appeals decision has recently cited these cases with approval, and has noted that the federal Eichleay formula is simply one way of determining extended home office overhead. Jindal Builders v. Cincinnati Metropolitan Housing Auth., 157 N.E.3d 279 (Ohio App. 1st Dist. 2020). The Court of Appeals ruled that the lower court “erred by prohibiting overhead damages” and remanded the case to the trial court to calculate the amount of extended home office overhead damages. The Court stated:
“Consequently, a trial court maintains discretion in calculating overhead damages resulting from government-caused delay, with the Eichleay formula but one arrow in its quiver.”
This case emphasizes the trend developing toward allowing the recovery of extended home office overhead damages in Ohio cases where the contractor did not cause the project delay.
