As prescribed in 5516.203-4(b), insert the following clause in solicitations and contracts when an economic price adjustment based on actual cost of fuel for airlift is anticipated and reporting will be accomplished per month.
Economic Price Adjustment based on Actual Cost of Fuel - Airlift (FEB 2009)
In order to protect the contractor and the government from significant market fluctuations in the price of fuel, an adjustment will be made based on actual costs incurred. Adjustments will be made as indicated below.
(a) Economic price adjustment (EPA) pursuant to this clause is limited to changes in the contractor’s cost for fuel only.
(b) Allowable fuel adjustments will be made upward or downward only if the price of fuel varies by more than one cent per gallon from the following pegged rate for fuel:
FUEL TYPE PEGGED RATE (Base Price)
(FILLABLE FIELD)
(1) When the average price per gallon paid by the contractor is greater than the established base price indicated above, the government will reimburse the contractor the difference between the price paid and the established base price.
(2) When the average price per gallon paid by the contractor is below the established base price indicated above, the contractor will reimburse the government the difference between the price paid and the established base price. Under these circumstances, the contracting officer will issue a demand letter and funds will be reimbursed as directed.
(c) Required reports for adjustments shall be received no later than 30 days after the month ends. A sample report format labeled, “Monthly Fuel Report Summary” is provided as an attachment to the contract.
(d) The actual average cost per gallon under this EPA clause shall be rounded to four decimal positions (e.g., $2.6308).
(e) For the contracting officer to consider a request for adjustment, the contractor shall submit data that clearly supports the request for adjustment. At a minimum, the contractor shall submit: 1) total mileage flown in performance of the USTRANSCOM contract 2) fuel costs associated with that performance, and 3) associated financial data or receipts, if requested by the Contracting Officer.
(f) Fuel adjustments will be made using the CLIN titled Fuel EPA Reimbursable. The following steps will be taken to determine the adjustment:
(1) The contractor’s fuel burn rate, established in the List of Aircraft in the contract, is multiplied by the total mileage flown in performance of the contract. In the case of a substitute aircraft not listed in the schedule, the lower burn rate of the substitute aircraft or the aircraft normally used in performance of the contract shall be used.
(2) The product is then multiplied by the difference between the average price per gallon paid and the established base price in the contract (also known as the variance).
Example:
Miles flown in support of the USTRANSCOM contract = 23,654
Burn rate for aircraft type (in schedule) = 4.21 gallons per mile
Base price of fuel established in the contract = $2.50
Actual average cost per gallon = $2.6308
Calculation:
Miles * Burn Rate * EPA Price Variance = Adjustment
23,654 * 4.21 = 99,583.34* $0.1308 = $13,025.50
ALTERNATE I (FEB 2009)
As prescribed by 5516.203-4 (b), when an economic price adjustment based on actual cost of fuel for airlift is anticipated and reporting will be accomplished per mission, substitute the following paragraph (c) to the basic clause.
(c) Required reports adjustments shall be provided on a per mission basis no later than __XX__days after completion of the mission. A sample report format is provided as an attachment to the contract.
ALTERNATE II (FEB 2009)
As prescribed by 5516.203-4 (b), when an economic price adjustment based on actual cost of fuel for airlift is anticipated for Civil Reserve Air Fleet (CRAF) International Services, replace paragraphs (b) through (f) of the basic clause with the following paragraphs (b) and (c).
(b) Allowable fuel adjustments will be made upward or downward when the price of fuel varies by more than one cent per gallon from the pegged rate established in the Uniform Rates and Rules.
(1) When the average price per gallon paid by the contractor is greater than the pegged price established in the Uniform Rates and Rules, the government will reimburse the contractor the difference between the price paid and the pegged price.
(2) When the average price per gallon paid by the contractor is below the pegged price established in the Uniform Rates and Rules, the contractor will reimburse the government the difference between the price paid and the pegged price. Under these circumstances, the contracting officer will issue a demand letter and funds will be reimbursed as directed.
(c) The fuel adjustment process shall be in accordance with Attachment 1 of this contract, Performance Work Statement, Appendix 3.
(End of clause)
