Attachment_1__Sample_Price_Adjustment_Calculation.pdf
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- Attached to
- MDAD HVAC CHILLERS
- Solicitation number
- EVN0060585
- Issued by
- Miami-Dade County, Fruitville CDP, Florida
About this file
This is a Sample Price Adjustment Calculation attachment related to the Miami-Dade Aviation Department (MDAD) HVAC Chillers full-service maintenance contract in Florida. The document provides a methodology for calculating annual price adjustments throughout the contract term, establishing a framework for how contractor costs may be escalated based on predetermined indices or formulas. The sample calculation demonstrates the application of adjustment mechanisms that would allow the contract price to reflect changes in labor costs, materials, and other relevant economic factors over the duration of the service agreement while maintaining cost transparency and predictability for both the department and the contractor.
The price adjustment calculation model outlined in this attachment establishes the contractual basis for managing cost escalation without requiring formal contract modifications. By utilizing standardized adjustment formulas, the contracting parties can accommodate inflation and market fluctuations in a systematic manner, ensuring that the contractor's compensation remains aligned with actual cost increases while protecting the department's budget interests. This approach is typical in long-term service contracts where multi-year pricing must account for economic variability, allowing both parties to execute the agreement with confidence in the fairness and sustainability of the pricing structure throughout the contract period.
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Attachment 1 – Sample CPI Price Adjustment Calculation
PRICES
The Bidders’ prices shall be inclusive of all costs, delivery, charges, and fees. Additional charges of any kind will not be accepted. The initial contract prices shall remain fixed and firm for a period of no less than twelve (12) months from the solicitation’s end date. Thereafter, prices may be adjusted upward or downward as follows:
The County may elect to negotiate price adjustments with Awarded Bidder(s) (decreases or increases) based on changes in the following pricing index: Consumer Price Index for All Urban Consumers (CPI-U), Series ID:
CUURS35BSA0, CUUSS35BSA0, Titled: All items in Miami-Fort Lauderdale-West Palm Beach, FL, All Urban Consumers, Not Seasonally Adjusted, as published by the U.S. Bureau of Labor Statistics (BLS). The Base CPI Index for adjustments will be the Index published by the BLS for the referenced CPI Series in the month and year when the solicitation ended (or the month prior to the solicitation’s end date if the solicitation’s end month is not published by the BLS), and the Base Price shall be the contract’s initial price(s).
The period used to calculate the adjustment will begin in the month when the solicitation ended (or the month prior to the solicitation’s end date if the solicitation’s end month is not published by the BLS) and will include as many months as have been published by the BLS at the time of the adjustment.
The following is an example of how to calculate an adjustment:
Contract’s Effective Date: May 1, 2022 Solicitation’s End Date: May 7, 2021
Index Point Change Calculation:
Current CPI Index (August 2022) 232.945 Less: Base CPI Index (April 2021) 229.815 Equals: Index Point Change 3.130
Percentage Change Calculation:
Index Point Change 3.130 Divided by: Base CPI Index 229.815 Equals: 0.01362 Multiplied by 100: 1.3620 Equals: Percent Change 1.37%
Price Calculation:
Percent Change: 1.37% Multiplied by Initial Contract Price (Base Price): $100.00 Equals: Applicable CPI Increase: $1.37 Adjusted Price According to CPI: $101.37
The Base Price and the Base CPI Index shall remain constant throughout the contract term and shall be the basis of all adjustments.
https://data.bls.gov/PDQWeb/cu
The following is an example of how to calculate a subsequent adjustment:
Index Point Change Calculation:
Current CPI Index (October 2023) 240.100 Less: Base CPI Index (April 2021) 229.815 Equals: Index Point Change 10.285
Percentage Change Calculation:
Index Point Change 10.285 Divided by: Base CPI Index 229.815 Equals: 0.04475 Multiplied by 100: 4.4753 Equals: Percent Change 4.48%
Price Calculation:
Percent Change: 4.48% Multiplied by Initial Contract Price (Base Price): $100.00 Equals: Applicable CPI Increase: $4.48 Adjusted Price According to CPI: $104.48
Should the referenced index be discontinued by the BLS, or should its data be unavailable, the County will use the successor index designated by BLS, not seasonally adjusted, as published by the U.S. Bureau of Labor Statistics (BLS). Price adjustments may also be negotiated based on other indexes published by the BLS (CPI or PPI) or other economic factors if these economic indicators are evidently proven to have directly affected the contract prices during the contract period.
An Awarded Bidder may initiate a request for price adjustment, the County will review such request as prescribed above and will grant the price adjustment as requested, negotiate with the Awarded Bidder to determine the appropriate price adjustment, or reject the request in its best interest. If the County elects to reject an Awarded Bidder's request for an adjustment, the Awarded Bidder is not excused from continuing to perform under the Contract. Failure of an Awarded Bidder to perform under these circumstances may result in such Awarded Bidder being deemed in breach of contract and the County terminating its Contract with such Awarded Bidder in accordance with Section 1-General Terms and Conditions, Paragraph 1.26-Termination for Default.
Adjusted prices shall remain firm for at least twelve (12) months; thereafter, prices may be readjusted as prescribed above.
Any price adjustments authorized by the County shall be formalized by a Contract Modification, originated, and published by the Strategic Procurement Department. Under no circumstances should an Awarded Bidder invoice the County a price that is higher than the price authorized through the contract award or an approved Contract Modification.
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