(a) The Contractor warrants that the prices set forth in this contract-
(1) Are based upon the wage rates, allowances, and conditions set forth in the collective bargaining agreements between the Contractor and its employees, in effect as of (insert date), and which are generally applicable to the ports where work under this contract is performed;
(2) Apply to operations by the Contractor on non-Government work as well as under this contract; and
(3) Do not include any allowance for cost increases that may-
(i) Become effective under the terms of the collective bargaining agreements after the date in paragraph (a)(1) of this clause; or
(ii) Result from modification of the collective bargaining agreements after the date in paragraph (a)(1).
(b) The Contractor shall notify the Contracting Officer within 60 days of receipt of notice of any changes (increase or decrease) in the wage rates, allowances, fringe benefits, and conditions that apply to its direct labor employees, if the changes-
(1) Are pursuant to the provisions of the collective bargaining agreements; or
(2) Are a result of effective modifications to the agreements; and
(3) Would change the Contractor's costs to perform this contract.
(c) The Contractor shall include in its notification-
(1) A proposal for an adjustment in the contract commodity, activity, or work-hour prices; and
(2) Data, in such form as the Contracting Officer may require, explaining the-
(d) Promptly upon receipt of any notice and data described in paragraph (c), the Contractor and the Contracting Officer shall negotiate an adjustment in the existing contract commodity, activity, or man-hour prices. However, no upward adjustment of the existing commodity, activity, or work-hour prices will be allowed in excess of ____ percent per year, except as provided in the Changes clause of this contract.
(1) Changes in the contract prices shall reflect, in addition to the direct and variable indirect labor costs, the associated changes in the costs for social security, unemployment compensation, taxes, and workman's compensation insurance.
(2) There will be no adjustment to increase the dollar amount allowances of the Contractor's profit.
(3) The agreed upon adjustment, its effective date, and the revised commodity, activity, or work-hour prices for services set forth in the schedule of rates, shall be incorporated in the contract by supplemental agreement.
(e) There will be no adjustment for any changes in the quantities of labor that the Contractor contemplated for each specific commodity, except as may result from modifications of the collective bargaining agreements. For the purpose of administering this clause, the Contractor shall submit to the Contracting Officer, within five days after award, the accounting data and computations the Contractor used to determine its estimated efficiency rate in the performance of this contract, to include the Contractor's computation of the costs apportioned for each rate set forth in the schedule of rates.
(f) Failure of the parties to agree to an adjustment under this clause will be deemed to be a dispute concerning a question of fact within the meaning of the Disputes clause of this contract. The Contractor shall continue performance pending agreement on, or determination of, any such adjustment and its effective date.
(g) The Contractor shall include with the final invoice submitted under this contract a statement that the Contractor has not experienced a decrease in rates of pay for labor, or that the Contractor has given notice of all such decreases in compliance with paragraph (b) of this clause.
