Construction Law/HOOH

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Question
Dear Sir

Emden formula is given by: H x C x PD/ 100 X CP

where :
H = head office percentage arrived at by dividing
the total overhead cost and profit of the Contractor’s
organization as a whole, by the total turnover.

C = contract sum

CP = contract period in weeks

PD = period of delay in weeks

My query is if the average overhead cost% is H1 & average profit% is H2 according to the past audited reports.

In the above formula whether the H is H1+H2 or H1 x H2.

Please explain

Br

Sudantha

Answer
Hi Sudantha
The value H in Emden's is a simple division of overhead divided by turnover to get a percentage value. There is no + or x in the formula.
You have to understand that before you can apply this - or Hudson's - formula you have to pass through at least 5 credibility gateways - one of which is demonstrable proof that the company has turned away tenders because of lack of vital staff resources.
Best regards
Mike Testro

Construction Law

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Mike Testro

Expertise

Anything related to extensions of time and delay analysis.

Experience

45 years in the Construction Industry 15 Years as a consultant delay analyst - I now hold myself to be expert in this field.

Organizations
Society of Construction Law Adjudication Society ex Planning Engineers Organisation

Publications
6 articles on the relevance of the India Contract Act 1872 and its relevance to modern construction in India. Waiting Publication

Education/Credentials
Associate Member of the Institue of Building

Past/Present Clients
Currently employed in India by Punj Lloyd as expert delay analyst. Engaged in ongoing arbitrations and EoT claims. Prior an Indepenent consultant in delay analysis.

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