SECTION_H.docx

SECTION H: SPECIAL CONTRACT REQUIREMENTS

H.1 ANNUAL ECONOMIC PRICE ADJUSTMENT

This contract includes an annual economic price adjustment for the price of diesel fuel for future years. The adjustment will be made for 20% of each line item’s hourly rates. Note that the adjustment percentage can be either negative or positive. Adjustments will be made based on the web-based U.S. Department of Energy (DOE) Energy Information Administration (EIA) Diesel Fuel Components History (Diesel History), found at URL: http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=emd_epd2d_pte_nus_dpg&f=m. The base price per gallon of diesel for this contract is 2.7150 (Diesel History). Rates will be adjusted on an annual basis effective January 1st for the option year of the contract. In order to account for a single month’s unusual high or low fluctuation, an average of the preceding 4 months of, September, October, November and December published diesel prices will be used as the basis for the economic price adjustment.

Sample: January 1, 2016 adjustment: If the average monthly EIA Diesel History of the preceding 4 months is 3.944 [(3.861 + 3.833 + 3.953 + 4.127)/4], an adjustment to a $100.00 hourly rate would be as follows:

Example: Current Diesel Price $392.0 Option Year: January 1, 2016 – Price $394.4 (average of last 4 months)

(394.4 – 392.0) / 392.0 = 2.4 / 392.0 = .006

The 2016 hourly rate would increase from $100.00 to $100.01

(.80)($100.00) + (.20)($100.00)(1+.006) = $80.00 + $20.00(1.01) = $80.00 + $20.20

Sample January 1, 2016, adjustment: If the average monthly EIA Diesel History of the preceding 4 months is 3.865 [(3.837+ 3.798+ 3.962+ 3.861)/4], an adjustment to a $100.00 hourly rate would be as follows:

(386.5 – 392.0) / 392.0 = -5.5 / 392.0 = -.014

The 2016 hourly rate would decrease from $100 to $99.99.

(.80)($100.00) + (.20)($100.00)(1-.014) = $80.00 + $20.00($.986) = $80.00 + $19.72