As prescribed in 5516.203-4(d), insert a clause that is substantially the same in all contracts for less than full-plane load scheduled services when an economic price adjustment based on the Bureau of Labor Statistics, Producer Price Index for North American Industrial Classification System (NAICS) codes is anticipated.
ECONOMIC PRICE ADJUSTMENT FOR LESS FULL-PLANE LOAD (LPL) SCHEDULED SERVICES - AIRLIFT (MAY 2010)
In order to protect the contractor and government against significant market fluctuations, the unit prices shall be adjusted on (Day/Month fillable field) of each Option Year beginning (Day/Month/Year fillable field). The adjustment shall be based on the Bureau of Labor Statistics, Producer Price Index for North American Industrial Classification System (NAICS) codes for insert NAICS index here. In the event publication of the index is discontinued, the parties shall agree upon an appropriate substitute index.
(a) Index figures subsequently revised by the Bureau of Labor Statistics (e.g., amending formerly released indices by removing or replacing components within the index, describing revisions by footnote or appendix, significantly altering the method of calculating the index, or any other method) shall not warrant a retroactive price adjustment under the terms and conditions of this contract.
(b) Price adjustments shall be executed via a contract modification.
(c) Any price adjustments under this EPA clause shall be rounded to two decimal positions (e.g. $1.50).
(d) The formula for determining the adjusted unit prices for the Option Year is -
Where:
P = Base contract unit price listed in the Schedule. These prices are fixed and establish the base for all adjustments to future option years. Exception: If at any time the adjusted unit price falls below the base contract unit price, the adjusted unit price shall become the new base contract unit price for calculating future economic price adjustments.
I1 = Index for Base Period (average of the index figures for the 12 month period from (Month Year fillable field) through (Month Year fillable field). This figure will be provided by contract modification after index data for that period is finalized. This number will not change for the life of the contract.
I2 = Index for the Adjustment Period is the average of the index figures for the most recent 12 month period ending 4 months prior to start of the next option period:
Option Year 1 = Average of index figures from (Month Year fillable field) through (Month Year fillable field)
* * * * * * * * * * * * *
EXAMPLE:
Contract performance start date is 01 October 2009. The first EPA will take place on 1 October 2010.
Sample Index:
|
|
Jan
|
Feb
|
Mar
|
Apr
|
May
|
Jun
|
Jul
|
Aug
|
Sep
|
Oct
|
Nov
|
Dec
|
Year
08
|
|
|
|
|
|
110.1
|
111.3
|
107.8
|
107.9
|
107.3
|
106.7
|
106.7
|
Year
09
|
106.9
|
106.0
|
106.0
|
106.2
|
109.4
|
109.4
|
109.4
|
109.4
|
109.6
|
111.2
|
109.5
|
112.2p
|
Year
10
|
113.4p
|
118.0p
|
117.8p
|
118.0p
|
118.0p
|
|
|
|
|
|
|
|
Note: The below figures are provided as an example only. The exact numbers for the base year ( I1 ) and ( I2 ) cannot be determined at this point.
Example P = $2.34
Example I1 = Avg from June 2008 through May 2009
(110.1+111.3+107.8+107.9+107.3+106.7+106.7+106.9+106.0+106.0+106.2+109.4)/12 = 107.7
Example I2 = Avg from June 2009 through May 2010
(109.4+109.4+109.4+109.6+111.2+109.5+112.2+113.4+118.0+117.8+118.0+118.0))/12 = 113.0
Example Adjustment: [(113.0/107.7) x $2.34] = [1.05 x $2.34] = $2.46
* * * * * * * * * * * * *
(e) Notwithstanding the economic price adjustment discussed above, the Government will accept downward price adjustments. The revised pricing must be submitted no later than 30 January, for prices to be effective by 1 April. The downward adjustment percentage shall apply to all pricing within the identified CLIN(s).
(f) In addition, carriers may waive the EPA for an increase that results in higher prices or any part of thereof for the entire contract or identified CLIN(s). The adjustment percentage shall apply to all pricing within the identified CLIN(s). Secondly, if the carrier elects to do so, they can offer the Government an additional downward price adjustment, effective at time of option exercise, in lieu of an EPA option year adjustment.
(End of clause)
