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Section 5452.216-9071: ECONOMIC PRICE ADJUSTMENT - MARKET PRICE - POSTS, CAMPS, & STATIONS - KOREA/GUAM/JAPAN (MAY 2010)

As prescribed at 16.203-4(a)(2)(100), insert the following clause:

    ECONOMIC PRICE ADJUSTMENT - MARKET PRICE (PC&S) (KOREA/GUAM/JAPAN (MAY 2010)

    (a) WARRANTIES. The Contractor warrants that-

        (1) The unit prices set forth in the Schedule do not include allowances for any portion of the contingency covered by this clause; and

        (2) The prices to be invoiced hereunder shall be computed in accordance with the provisions of this clause.

    (b) DEFINITIONS. As used throughout this clause, the term-

        (1) Base unit price means the unit price set forth opposite the item in Section B of the Schedule.

        (2) Market price means a price determined by an independent trade association, governmental body, or other third party and reported or made available in a consistent manner in a publication, electronic data base, or other form. This price may be either a single market price or a combination of market prices for price adjustment for individual items by product, market area, and publication as specified in the Table in (g) below. For purposes of this procurement, the market price is the average of the prices published in Platt's Oilgram Price Report. The applicable market price is identified by product following the Table in (g) below.

            (i) Base market price means the price as shown in column IV of the Table in (g) below and is the market price from which economic price adjustments are calculated pursuant to this clause.

            (ii) Adjusting market price means the market price in effect on the date of delivery and that will be used to determine the change in market price as defined in (c)(1) below.

        (3) Date of delivery is defined as follows:

            (i) FOR F.O.B. DESTINATION TRUCK DELIVERIES. The date product is received, on a truck-by-truck basis.

            (ii) FOR ALL OTHER TYPES OF DELIVERIES. The date and time product commences moving past the specified f.o.b. point.

    (c) See Note 1 .

        (1) Subject to the provisions of this clause, the prices payable hereunder shall be determined by adding to the base unit price the same number of cents, or fraction thereof, that the adjusting market price increases or decreases, per like unit of measure, subsequent to the date on which the base market price is established (see column IV of the Table). The prices payable shall be issued through semimonthly contract notifications effective the first and third Monday of each month.

        (2) Contract price adjustments shall be provided via notification through contract modifications and/or posting to the DESC web page at http://www.desc.dla.mil under the heading Vendor Resources and then Product Price Adjustments.

        (3) All arithmetical calculations, including the final adjusted unit price, shall be rounded to four decimal places.

        (4) FAILURE TO DELIVER. Notwithstanding any other provisions of this clause, no upward adjustment shall apply to product scheduled under the contract to be delivered before the effective date of the adjustment, unless the Contractor’s failure to deliver according to the delivery schedule results from causes beyond the Contractor’s control and without its fault or negligence, within the meaning of paragraphs (f), Excusable Delays, and (m), Termination for Cause, of the CONTRACT TERMS AND CONDITIONS - COMMERCIAL ITEMS clause of this contract, in which case the contract shall be amended to make an equitable extension of the delivery schedule.

        (5) UPWARD CEILING ON ECONOMIC PRICE ADJUSTMENT. The Contractor agrees that the total increase in any contract unit price, pursuant to these economic price adjustment provisions, shall not exceed See Note 2____ percent of the base unit price in any applicable program year (whether a single year or a multiyear program), except as provided hereafter.

            (i) If at any time the Contractor has reason to believe that within the near future a price adjustment under the provisions of this clause will be required that will exceed the current contract ceiling price for any item, the Contractor shall promptly notify the Contracting Officer in writing of the expected increase. The notification shall include a revised ceiling the Contractor believes is sufficient to permit completion of remaining contract performance, along with an appropriate explanation and documentation as required by the Contracting Officer.

            (ii) If an actual increase in the market price would raise a contract unit price for an item above the current ceiling, the Contractor shall have no obligation under this contract to fill pending or future orders for such item, as of the effective date of the increase, unless the Contracting Officer issues a contract modification to raise the ceiling. If the contract ceiling will not be raised, the Contracting Officer shall so promptly notify the Contractor in writing.

        (6) REVISION OF MARKET PRICE INDICATOR. In the event-

            (i) Any applicable market price indicator is discontinued or its method of derivation is altered substantially; or

            (ii) The Contracting Officer determines that the market price indicator consistently and substantially fails to reflect market conditions,-

the parties shall mutually agree upon an appropriate and comparable substitute for determining the price adjustments hereunder. The contract shall be modified to reflect such substitute effective on the date the indicator was discontinued, altered, or began to consistently and substantially fail to reflect market conditions. If the parties fail to agree on an appropriate substitute, the matter shall be resolved in accordance with paragraph (d), Disputes, of the CONTRACT TERMS AND CONDITIONS - COMMERCIAL ITEMS clause of this contract.

    (d) CONVERSION FACTORS. If this clause requires quantity conversion for economic price adjustment purposes, the conversion factors for applicable products, as specified in the DESC Conversion Factor Instruction, apply unless otherwise specified in the Schedule.

    (e) EXAMINATION OF RECORDS. The Contractor agrees that the Contracting Officer or designated representatives shall have the right to examine the Contractor's books, records, documents, and other data the Contracting Officer deems necessary to verify Contractor adherence to the provisions of this clause.

    (f) FINAL INVOICE. The Contractor shall include a statement on the final invoice that the amounts invoiced hereunder have applied all decreases required by this clause.

    (g) TABLE.

I II III IV

        Heading under

        which market price Base market price

    Name of publication is published and as of ____________

Item no. (see (b)(2) above) name of product (date of publication)

(SEE NOTE 3)

                (End of Clause)

NOTE 1: The Contracting Officer shall insert the following:

    (For Korea and Guam only):

    (c) ADJUSTMENTS.

    (For Japan only):

    (c) ADJUSTMENTS. For products delivered by barge or tanker, the Contractor shall notify the DESC Contracting Officer of any delivery and associated change in the adjusting market price within 15 days from the date thereof. For products delivered via other modes (TT, TW, etc.), price adjustments shall be semimonthly and shall occur on the first and third Monday of each month. No increase in a contract unit price for barge or tanker deliveries shall be executed pursuant to this provision until the increase in the applicable adjusting market price has been verified by the Contracting Officer.

NOTE 2: The Contracting Officer shall insert the appropriate ceiling percentage in paragraph (c)(4) as determined by the Chief of the Contracting Office or designee (reference note 2 of the clause). Explicit approval must be obtained for any ceiling exceeding ten (10) percent in accordance with DLAD 16.203-3 (94).

NOTE 3: The Contracting Officer shall coordinate with the Market Research Section (DESC-RN) before completion of fill in the blank information sections of the clause such as base market, and publication dates, to ensure the accuracy of the information and the correct selection of the market price.




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