8-CPI-U Based Price Adjustment Calculations.pdf
PDF 13 KB Posted
- Attached to
- ITB - High-Density Polyethylene Pipe (HDPE) and Related Items for Harris County Precinct 3
- Solicitation number
- 25/0329
- Issued by
- Harris County, Texas
About this file
This is a CPI-U Based Price Adjustment Calculations document applicable to Harris County Precinct 3's contract for High-Density Polyethylene Pipe (HDPE) and Related Items, with a contract term beginning approximately February 1, 2026. The document outlines the methodology for determining renewal year pricing by adjusting current contract year pricing based on the Consumer Price Index for All Urban Consumers (CPI-U) for the Houston, Texas area, as published by the U.S. Bureau of Labor Statistics. The adjustment calculation uses the average inflationary or deflationary effect measured across six consecutive twelve-month periods preceding contract expiration.
The price adjustment methodology requires averaging the CPI-U inflationary or deflationary effects across six twelve-month periods, with the most recent period ending five to six months prior to contract expiration to ensure current data availability. The calculation process uses CPI-U data published every other month beginning in February, with each twelve-month measurement period ending in even-numbered months (June, April, February, December, October, and August). This approach ensures that renewal pricing decisions can be made in the eighth month of the contract term with sufficient current economic data, allowing the contract price to reflect actual market conditions in the Houston area without requiring manual renegotiation of rates.
View the file
Other files
Show all 13
On GovTribe
Work with this file
- 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 .