Clause 852.216-72 Amendment 0009.pdf

36C77623R0021/Amendment 0009

C.14 VAAR 852.216-72 PROPORTIONAL ECONOMIC PRICE ADJUSTMENT

OF CONTRACT PRICE(S) BASED ON A PRICE INDEX (MAR 2018)

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

(b) The cost index, for the purpose of price adjustment under this clause, shall be Aluminum Extruded Product Series ID PCU331318331318 as contained in www.bls.gov/PPI as published by https.bls.gov/PPI All adjustments authorized under this clause shall be made by using the Base Index and Adjusting Indexes, which are published .

(1) The Base Index, for the purposes of price adjustment under this clause, shall be the most recent Index published prior to the closing date for receipt of offers, or the due date for receipt of best and final offers if discussions are held. This Base Index shall remain constant throughout the life of the contract, including all pricing periods.

(2) The Adjusting Index shall be the most recent Index published prior to the date of contract adjustment, as specified in paragraph (f).

(c) For purposes of this clause, it will be conclusively presumed that 45.00 percent (%) of the price of

All aluminum modular ramp components represents the Base Cost of All aluminum modular ramp components and the resulting Base Cost will be the basis upon which adjustment will be made under this clause. This Base Cost will be used in calculating all adjustments to the following line items:

0001-0011AA, 0023-0033AA, 0045-0055AA, 0067-0077AA,0089-0099AA, 0111-0121AA,

1001-1011AA, 1023-1033AA, 1045-1055AA,1067-1077AA,1089-1099AA, 1111-1121AA,

2001-2011AA, 2023-2033AA, 2045-2055AA, 2067-2077AA, 2089-2099AA, 2111-2121AA,

3001-3011AA, 3023-3033AA, 3045-3055AA, 3067-3077AA, 3089-3099AA. 3111-3121AA,

4001-4011AA, 4023-4033AA, 4045-4055AA, 4067-4077AA, 4089-4099AA, 4111-4121AA

A new Base Cost will be calculated for each pricing period based on the new pricing period prices.

(d) The percentage of the price of the indexed commodity (see paragraph (c)) remains fixed throughout the life of the contract and is not subject to modification under this clause. Any pricing actions pursuant to the ‘‘Changes’’ clause or other clause or provision of the contract, except for this clause, will be priced as though there were no provisions for economic price adjustment.

36C77623R0021

(e) All price adjustments shall be applicable only to the specific contract adjustment period to which the calculations are made. For every contract adjustment period, new calculations shall be made and new prices determined. Every adjustment during the Base Year shall be based on the original contract prices for that contract year and every adjustment during a pricing period shall be based on the original contract prices for that pricing period. The Contracting Officer must make new calculations for each and every contract adjustment period specified in paragraph (f) and at the beginning of each new pricing period, if different.

(f) The dates of contract adjustment shall be every 6 months and the starting dates of each pricing period, if not already included in these dates. The Contracting Officer shall retain a copy of the Base Index in the contract file and, on each date of adjustment specified herein, obtain a copy of the Adjusting Index. The Contracting Officer shall calculate the adjustment due and shall, within 5 business days, issue a modification to the contract adjusting the contract or unit price(s). The adjusted contract or unit price(s) shall be effective for all orders placed or services provided after the date of contract adjustment, as specified in this paragraph (f), until the date of the next contract adjustment. If the Contracting Officer fails to act, the Contractor shall request a contract adjustment in writing and any subsequent adjustment shall be retroactive to the applicable date of contract adjustment. The Contractor’s entitlement to price increases for a prior contract pricing period shall be waived unless the Contractor’s written request for an adjustment under this clause is received by the Contracting Officer no later than 30 days following the end of the base year for changes applicable to the base year, or 30 days following the end of each pricing period for changes applicable to that pricing period. The Government’s right to contract decreases for prior pricing periods shall be waived unless the Contracting Officer processes a contract modification no later than 30 days following the end of the base year for changes applicable to the base year, or 30 days following the end of each pricing period for changes applicable to that pricing period.

(g) An example of an adjustment calculation is provided herein for informational purposes only.

(1) For purposes of this example, assume that a contract is for ambulance services, that the contract price is $2.10 per mile one way, that price adjustments will be made on the basis of the cost of gasoline, that the cost of gasoline represents 10% of the total cost per mile (the Base Cost is 10% of $2.10 (the per mile one way price in Line Item X), or $0.21), and that contract adjustments will be made quarterly. If the Base Index (the price of gasoline the week prior to receipt of bids) is $1.559 per gallon and the price of gasoline at the first date of contract adjustment is $2.129 per gallon, the calculations for contract price adjustment would be as follows:

Adjusting Index (most recent Index cost of gasoline as of the date of the first adjustment period

$2.129 per gallon

Minus the Base Index (Index cost of gasoline as of the date of receipt of offers)

-$1.559 per gallon

Equals increase (or decrease) to the Base Index

$0.570

Divide increase (or decrease) to the Base Index by the Base Index

$0.570 + $1.559 = .3656 * (36.56% increase

Base Cost of $0.21 (10% of $2.10) multiplied by .3656 = $0.0768 unit price increase

New Unit price following the adjustment is $2.10 plus $0.0768 = $2.1768 per mile (rounded to $2.18) **

* This figure shall be rounded to the fourth decimal place. When the fifth decimal is 1 to 4, the figure shall be rounded down, 5 to 9, rounded up.

** The unit price adjustment shall be rounded up or down, as above, to match the number of decimal places in the original bid.

(2) For the second contract adjustment period, all calculations would be based on the original contract bid price for that contract year, $2.10 per mile in this example. If the price of gasoline goes down during the second adjustment period to the original Base Index price of $1.559 per gallon, the adjusted contract price for that second period would return to $2.10 per mile (there would be a zero percent increase or decrease to the Base Cost and thus no change to the original bid price for that contract adjustment period). The Contracting Officer would then issue a contract modification returning the contract price from $2.18 to $2.10 per mile for that contract adjustment period. If, on the other hand, the price of gasoline actually went below the Base Index price, say to $1.449 per gallon, the calculations for the second economic price adjustment period would be as follows:

Adjusting Index (most recent Index cost of gasoline as of the date of the second adjustment period)

$1.449 per gallon

Minus the Base Index (Index cost of gasoline as of the date of receipt of offers)

-$1.559 per gallon

Equals increase (or decrease) to Base Index ($0.110) (a negative $.11) Divide increase (or decrease) to the Base Index by the Base Index

($0.11) + $1.559 = (.0706) (7.06% decrease)

Base Cost of $0.21 (10% of $2.10) multiplied by (.0706) = ($0.0148) unit price decrease New Unit price following the second economic price adjustment is $2.10 minus $0.0148 = $2.0852 per mile (rounded to $2.09)

(3) At the start of the first pricing period, the Contracting Officer shall recalculate the price per mile based on any changes in the price of gasoline from the original contract award date and based on the Contractor’s new second pricing period price per mile. Assuming the Contractor’s bid price per mile for the second pricing period was $2.25 per mile, the new Base Cost for gasoline would be 10% of $2.25, or $0.225 (note that the original percent figure from paragraph

(c) (10% in this sample) stays constant throughout the life of the contract), but the Base Cost would change if the pricing period contract price changes. If the Adjusting Index for gasoline at the start of the second pricing period was now up to $1.899 per gallon, the new second pricing period price for the first contract adjustment period would be calculated as follows:

Adjusting Index (most recent Index cost of gasoline as of the first day of the second pricing period

$1.899 per gallon

Minus the Base Index (Index cost of gasoline as of the date of receipt of offers

-$1.559 per gallon

Equals increase (or decrease) to the Base Index $0.340 Divide the increase (or decrease) to the Base Index by the Base

$0.34 + $1.559 = .2181 (21.81% increase)

Base Cost of $0.225 (10%* of $2.25) multiplied by .2181 = $0.0491 unit price increase.

New Unit price for the first contract adjustment period in the second pricing period is $2.25 plus $0.0491 = $2.2991 per mile (rounded to $2.30 per mile).

* Note that the percentage remains constant (10%) but that the Base Cost has been increased for the first contract adjustment period in the second pricing period, since the Base Cost is a percentage of the second pricing period unit cost per mile (in this sample), and the unit cost per mile has increased in this sample for the second pricing period from $2.10 to $2.25. Although the new unit price for the first contract adjustment period of the second pricing period following application of the economic price adjustment in this sample would be $2.30 per mile, all economic price adjustment calculations made during that second pricing period would be based on the original second pricing period bid price ($2.25 in this sample). If in the second contract adjustment period of the second pricing period, the calculations resulted in a unit price increase for gasoline of $0.0332, the adjusted price for that period would be $2.25 + $0.0332 = $2.2832, rounded to $2.28 per mile.

(h) Price adjustments pursuant to this clause, which shall be made by contract modification issued by the Contracting Officer, shall show the Base Index (see paragraph (b)(1)), the Adjusting Index, the Base Cost (see paragraph (c), the mathematical calculations used to arrive at the adjusted contract unit price, and the effective date of the adjustment.

(i) In the event that https.bls.gov/PPI 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. If the Contracting Officer determines that the Index consistently and substantially fails to reflect market conditions, the Contracting Officer may modify the contract to specify use of an appropriate substitute index, effective on the date the Index specified herein begins to consistently and substantially fail to reflect market conditions.

(j) Any dispute arising under this clause shall subject to the ‘‘Disputes’’ clause of the contract.

(End of Clause)