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DSCR

DSCR I82: ECONOMIC PRICE ADJUSTMENT (EPA) - METAL/METAL PRODUCTS

I82   52.216-9G05   ECONOMIC PRICE ADJUSTMENT   DSCR (JAN 1997)
AND                 -METAL/METAL PRODUCTS
I16F34


    (a)  The economic indicator for the purpose of price adjustment 
under this clause shall be the producer price index for Code No. 10 
(1967-100), Metals and Metal Products, as contained in the monthly 
publication entitled, "Producer Prices and Price Indexes" published 
by the U.S. Department of Labor, Bureau of Labor Statistics.  The 
base for the purpose of price adjustment under this clause shall be 
the three month arithmetical average of the published index of the 
economic indicator for the month preceding, the month of, and the 
month following the opening date of the invitation for bids.

    (b)  To the extent that contingent contract performance cost 
increases are provided for by this economic price adjustment clause, 
the bidder warrants that the prices in the bid do not include any 
amount to protect against such contingent cost increases.

    (c)  For the purpose of this clause, it will be conclusively 
presumed that 45% of the contract unit price represents the cost 
of materials, and as a consequence only 45% of the initial contract 
unit price is subject to adjustment under this clause.  Price 
adjustments pursuant to this clause, made by contract modification 
issued by the Contracting Officer, will show the base price index 
(as defined in paragraph (a) above), the adjusting index, the initial 
contract unit price, and the mathematical calculations used to arrive 
at the adjusted contract unit price for the delivered items.

    (d)  In respect to increases under this clause, the adjusting 
index is the arithmetical average of the indices (for the code 
number in paragraph (a) above) published for the three preceding 
months prior to the schedule delivery or actual delivery, whichever 
is earlier.  As to decrease, the adjusting index is the arithmetical 
average of the indices (for the code number in paragraph (a) above) 
published for the three preceding months prior to actual delivery.
The following illustrates the adjustment process:

ASSUME:     Base Price Index = 150.00
            Adjusting Index* = 167.80
            Initial Contract Unit Price = $10,150.77

ADJUSTMENT FORMULA:

     Contract Unit Price (1+.45 (Adjusting Index - Base Index))
                     Base Index       = Adjusted Contract Unit Price

EXAMPLE:    $10,150.77 (1+.45 (167.8 - 150.0))
                                  150.0        =   Adjusted Contract 
                                                   Unit Price

            $10,150.77 (1+.45 (0.11867 **    )) =  Adjusted Contract 
                                                   Unit Price

            $10,150.77 (1+0.05340 **         ) =   Adjusted Contract 
                                                   Unit Price

            $10,150.77 (1.05340              ) =   Adjusted Contract 
                                                   Unit Price

            $10,692.82 ***                     =   Adjusted Contract 
                                                   Unit Price

    * In computing the adjusting index, the resulting figure shall 
be rounded to the second decimal place.  When the third decimal is 
1 to 4, round downward.  When the third decimal is 5 to 9, round 
upward.

   ** This figure shall be rounded to the fifth decimal place.  
When the sixth decimal is 1 to 4, round downward.  When the sixth 
decimal is 5 to 9 round upward.

  *** All dollar figures shall be rounded to the nearest cent.  
Increase amounting to $.001 to $.004 shall be rounded downward.
Increases amounting to $.005 to $.009 shall be rounded upward.

    (e)  Payment on this contract shall be at the current contract 
price pending issuance of an adjusting modification.  The first 
amendment hereunder will be made six months after the contract 
date, provided there is at least a three percent change in the 
economic indicator from the base referred to in paragraph (a) 
of this clause.  Subsequent adjustments hereunder will be made on 
a semi-annual basis (from the date of the first adjustment), 
provided there has been at least a three percent change from the 
economic indicator level upon which most recent adjustment under 
this clause was made.  The semi-annual and three percent change 
limitations of this paragraph shall not apply to any final 
adjustment required after delivery of the last unit called for 
by this contract and subject to adjustment under this clause.

    (f)  Notwithstanding the foregoing, the aggregate of the 
increase(s) in any unit price under this clause shall not exceed 
25% of the original contract price for such unit.
There shall be no limit on the downward economic price adjustments 
made pursuant to this clause.

    (g)  Pricing actions pursuant to the Changes Clause or other 
provisions of the contract will be priced as though there were no 
provision for economic price adjustment.

    (h)  In the event the Bureau of Labor Statistics discontinues, 
or alters substantially its method of calculating, the index cited 
herein, the parties shall mutually agree upon an appropriate 
substitute for determining the price adjustment described herein.

    (i)  If the Contracting Officer determines that the index 
consistently and substantially fails to reflect market conditions, 
the Contracting Officer may amend the contract to specify use of 
an appropriate index, effective on the date the index specified 
in the contract begins to consistently and substantially fail to 
reflect market conditions.

    (j)  Any dispute arising under this clause shall be determined 
in accordance with and subject to the "Disputes" Clause of the 
contract.

    (k)  This economic price adjustment clause is applicable to any 
option units added to this contract under the provisions of Clause 
52.217-9G07 (Section I) of this contract only if option unit prices 
are the same as or less than basic quantity unit prices.