223004 Supplemental Letter No. 1.pdf

CITY OF SALEM

DEPARTMENT OF FINANCE SERVICES

CONTRACTS & PROCUREMENT

SUPPLEMENTAL INFORMATION LETTER NO. 1

March 2, 2022

BID NO. 223004

FOR: MISCELLANEOUS BRASS FITTINGS

CLOSING DATE: MARCH 9, 2022 AT 11:00 AM (LOCAL TIME)

Dear Bidder:

THE FOLLOWING SECTION HAS BEEN REVISED IN THE BID MANUAL:

9. ESCALATION/DE-ESCALATION AGREEMENT

Prices shall remain firm for the first three (3) months of the initial agreement term except in the case of price decreases. After the first three (3) months of the agreement, the successful Bidder furnishing supplies or materials under this contract will be allowed to increase or decrease prices charged to the City in the same proportion as charged to the successful Bidder, except as hereinafter provided.

The contract unit price(s) shall be the basis for such increase or decrease, by application of a percentage or fixed amount against the contract unit price(s). Price changes involving materials or supplies which are re-sold to the City may be increased or decreased by submitting documentation in the form of invoices, payment documents or other evidence of the unit prices actually charged by the successful Bidder's supplier(s).

Prices of raw materials which constitute a portion of a finished product, manufactured by the successful Bidder, and sold directly to the City, may be increased or decreased as that portion of the raw material applies to the finished product, and in direct proportion to the price increase or decrease, documented as set forth above.

Price increase not eligible for escalation shall be considered as any of the successful

Bidder's actual costs of doing business such as overhead, supplies, labor, utilities, appliances and appurtenant machinery.

Application for a price increase shall be submitted to the Contracts & Procurement

Manager, along with documentation substantiating such increase. When the Contracts &

Procurement Manager has been notified in the above manner, by the successful Bidder, that they wish to increase prices, the Contracts & Procurement Manager shall have authority to re-negotiate with others and cancel the balance of the existing agreement, if materials of equal quality may be obtained at lower prices than proposed by the successful

Bidder. All documentation of the basis for a price escalation is subject to review by the

Contracts & Procurement Manager who may demand such further documentation and/or conduct such further investigation as may be deemed necessary.

Increase or decrease of prices will be allowed the first of the month following receipt of communication, or the effective date, whichever is later.

No price escalation in excess of 15% of the unit price bid will be allowed during any thirty

(30) calendar day period.

The City will calculate price increases as follows:

• Subtract the new unit price from the previous unit price. Example: $47.50 - $44.40

= $3.10

• Divide the difference by the previous unit price. Example: $3.10 / $44.40 = $0.06

• Covert to a percentage. Example: 6%

Shawna Self, CPPB

Purchasing Manager cc: PEGGY FISCHER, Contract Administrator

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