22-CPI-U Based Price Adjustment Calculations.pdf
PDF 13 KB Posted
- Attached to
- ITB - Concrete Pavement Repair and Related Items (South Zone) for Harris County Precinct 2 State and local contract opportunity
- Solicitation number
- 26/0113
- Issued by
- Harris County, Texas
About this file
This document is a CPI-U Based Price Adjustment Calculations guide for Harris County Precinct 2, Texas, establishing the methodology for adjusting contract pricing during renewal periods. The document outlines the procedure for determining renewal year pricing by applying the Consumer Price Index for All Urban Consumers (CPI-U) for the Houston, Texas metropolitan area, as published by the U.S. Bureau of Labor Statistics. The adjustment calculation utilizes the average inflationary or deflationary effect measured across six consecutive twelve-month periods preceding contract expiration, with data requirements becoming current five to six months prior to the scheduled contract end date. The methodology accommodates the BLS's bimonthly publication schedule for Houston-area CPI-U data, beginning in February.
The pricing adjustment mechanism operates by totaling the inflationary/deflationary effects across the six twelve-month periods and dividing by six to determine the average adjustment rate applied to current contract year pricing. The CPI-U measure covers approximately 80 percent of the total population and includes wage earners, clerical workers, professionals, managers, technical workers, the self-employed, retirees, and others not in the labor force. The document provides a detailed example for contracts expiring in November or December, establishing the specific six-month period endpoints and calculation framework. This approach ensures that renewal pricing adjustments reflect actual market conditions as measured by the CPI-U and provides transparency and consistency in price escalation calculations for contract renewals.
View the file
Other files for this state and local contract opportunity
Show all 22
On GovTribe
Work with this file on GovTribe
- Download the original file
- Contacts named in this file
- Similar government files
- Ask GovTribe AI about this file
Text version
CPI-U Based Price Adjustment Calculations
CPI-U Based Price Adjustment Calculations
For any year in which a current contract is renewed, the renewal year pricing will be determined by adjusting the current contract year pricing by the average inflationary/deflationary effect, as reported in the Consumer Price Index of All Consumers (CPI-U) for Houston, Texas, between the current contract year as compared to the year preceding the current contract year of the contract. The CPI-U, as published by the U.S. Bureau of Labor Statistics (BLS), is a measure, over time, of the average change in prices in a fixed market basket of goods and services and covers approximately 80 percent of the total populations, including wage earners, clerical workers, as well as groups such as a professional, managerial, and technical workers, the self-employed, retirees and others not in the labor force.
The average inflationary/deflationary effect will be determined by totaling, and dividing by six (6), the inflationary/deflationary effects of six (6) twelve (12) month periods occurring prior to expiration of the current contract. Since the inflationary/deflationary effect for the Houston area is calculated by the BLS every other month beginning in February, and since the intention to renew a contract should be determined in the eighth month of the contract, all required data for calculating the average adjustment rate need be current only five (5) or six (6) months prior to the scheduled expiration of the current contract.
For example, assuming a contract expires in November or December, the end of the most recent twelve (12) month period will be June of the year of the current contract. The end of each of the other five (5) twelve (12) month periods will be the second month before the end of the immediately preceding twelve (12) month period.
Therefore, the six (6) twelve (12) month periods applicable to a contract expiring in November or December, 2008, are:
Period #: 1 2 3 4 5 6
From: 6/07 4/07 2/07 12/06 10/06 8/06 To: 6/08 4/08 2/08 12/07 10/07 8/07
Period #1 is from June of the first year before the contract period to June of the year of the contract period, Period #2 is from April of the first year before the contract period to April of the year of the contract period, Period #3 is from February of the first year before the contract period to February of the year of the contract period, Period #4 is from December of the second year before the contract period to December of the first year before the contract period, Period #5 is from October of the second year before the contract period to October of the first year before the contract period, Period #6 is from August of the second year before the contract period to December of the first year before the contract period.
File details come from the government source that posted it. Updated .