(h) Revised prices will become effective on the 1st Sunday of the next month and will remain in effect until the next price change occurs.
(i) Price adjustments pursuant to this clause will not be made by separate contract modifications. Adjustments will be implemented by the government as follows, and these actions shall constitute a modification to the contract:
(1) The adjusted contract unit price(s) for the following month will be input in STORES,
(2) A facsimile transmission will be sent to contractors who do not have electronic access, and
(3) The calculations used to derive the adjusted contract unit price(s) for the following month will be posted on the internet at http://www.dscp.dla.mil/subs/pv/mrepa/index.asp.
(j) The aggregate of the increases in any contract unit price under this clause shall not exceed 30% of the original contract unit price. The original contract unit price is the price in effect on the date of award. If at any time during the term of the contract, a proposed economic price adjustment will exceed this ceiling, the Government reserves the right to raise this ceiling where changes in market conditions during the contract period support an increase There is no percentage limitation on the amount of downward adjustments that may be made under this clause.
(k) In the event publication of the economic indicator is discontinued or its method of calculation substantially altered so that it no longer reflects market prices, the parties shall mutually agree upon an appropriate substitute for price adjustment(s) under this clause.
(l) Any dispute arising under this clause is subject to the “disputes” clause of the contract.
(End of Clause)
52.216-9032 ECONOMIC PRICE ADJUSTMENT (EPA) - ESTABLISHED MARKET PRICE - MILK
ALTERNATE II
As prescribed in 16.203-4-90(f)(ii) use the following clause:
52.216-9032 ECONOMIC PRICE ADJUSTMENT (EPA) - ESTABLISHED MARKET PRICE - MILK
ALTERNATE II (Feb 2009)
(a) To the extent that contingent cost increases are provided for by this clause, the contractor warrants that prices included in the contract do not include any amount to protect against such contingent cost increases.
(b) This EPA clause applies to Skim Milk and Butterfat Fluid Milk Products classified as Class I Milk only (i.e., whole milk, fat-free milk, low fat milk, light milk, reduced fat milk, milk drinks, eggnog and cultured buttermilk, including any such beverage products that are flavored, cultured, modified with added nonfat milk solids, sterilized, concentrated, or reconstituted. As used in this paragraph, the term concentrated milk means milk that contains not less than 25.5 percent, and not more than 50 percent, total milk solids). Any package sizes other than gallons will be pro-rated based upon the price adjustment per gallon.
(c) Class I milk, as described in this clause, is subject to the regulations of the United States Department of Agriculture under the Federal Milk Marketing Orders.
(d) The economic indicator for the purpose of prospective adjustments to contract prices under this clause shall be the Class I price [(Base Skim Milk Price for Class I times 0.965) plus (Advanced Butterfat Pricing Factor times 3.5)] in the Announcement of Advanced Prices and Pricing Factors released by the U.S. Department of Agriculture, Agricultural Marketing Service, Dairy Programs. The Announcement is released on the Friday before the 23rd of the month unless the 23rd of the month falls on a Friday in which case, Friday the 23rd will be the release date.
(e) Price adjustments shall be based on the following:
(1) The “base price” for the purpose of the initial adjustment calculation under this clause shall be the current month price of the economic indicator in effect at
(i) the closing date for proposals, if no discussions are held, or
(ii) the due date for final proposal revisions, if discussions are held.
The “base price” for each subsequent monthly adjustment calculation shall be the adjusting price from the previous month.
(2) The “adjusting price” shall be the monthly price of the economic indicator released following the month used to determine the “base price”.
(f) For the purpose of price adjustments pursuant to this clause:
(1) Adjustments will be made when and only when the change per gallon in either direction is equal to or greater than +/-$0.0100.
(2) Adjustments will be rounded to two decimal places to accommodate systems requirements of the Subsistence Total Order Receipt Electronic System (STORES).
(3) One hundred weight (CWT) as used in the price of the economic indicator equates to 11.63 gallons of milk deliverable under this contract.
(g) Promptly following release of the Announcement of Advanced Prices and Pricing Factors applicable to the following month, the contracting officer shall compute the adjustments, if any, to the current contract prices for the purpose of determining any revised prices applicable to orders for the next month in the manner detailed below:
(1) Compute adjusting price.
(2) Compute base price.
(3) Compute change from base price.
(4) Convert the price change to price per gallon.
(5) Compute price change for a box of 27 half pints (1.6875 gallons).
(6) Compute adjusted contract unit price(s).
The following sample price computation is an illustration using January as the Base Price and February as the Adjusting Price.
