DFTS_Atch_12_-_Instructions_for_Obtaining_IHS_Index_Values_(20150529).pdf

HTC711‐15‐R‐R003

DoD Freight Transportation Service (DFTS) Solicitation

Instructions for Obtaining IHS Trucking Indices

21 MAY 2015

This document is produced to assist interested parties in understanding which indices are used in the

Economic Price Adjustment clause for solicitation HTC711‐15‐R‐R003, DoD Transportation Freight

Service (DFTS) and the resultant contract.

The clause states:

For all unit rates and minimum charges with the exception of the time‐definite service level (TDef) unit rates and minimum charges, the adjustment shall be based on a derived, composite index based on input cost and demand indices from the IHS Global Insight Pricing and Purchasing Industry Forecasting for the North American Industrial Classification System (NAICS) code 484122, General Freight Trucking, Long Distance, Less Than Truckload. The derived, composite index to be applied to the trucking unit rates and minimum charges is based on the Input Cost Index (exclusive of fuel) and the Demand Index for NAICS 484122. The Input Cost Index (exclusive of fuel) is weighted 69% while the Demand Index is weighted 31%. The resultant composite index will be used for adjustments as it is representative of production costs, exclusive of fuel costs, as well as market activity.

This document is meant to aide in the understanding of what the referenced indices are (input cost exclusive of fuel and demand index) and how to obtain them from the IHS DataInsight webtool.

1) The first step is to open the IHS datainsight webtool and select the “Purchasing Analyzer” under “Applications” on the left hand side of the screen. This will pull up a window similar to the following screenshot.

2) The second step is to either select the “Next” button at the bottom of the page or simply click on the “Date Range” tab at the top. In doing this, the screen will advance to show the following screenshot.

3) The date range can be chosen based on the user’s preference, but should correspond to a date range of interest with respect to the performance periods of the contract. The frequency should be selected as “Quarterly” since the EPA clause specifies that the index is an average of 4 quarters of index values. After these selections are made, select “Next” at the bottom or select the tab labeled “Select Industries”. In doing this, the screen will advance to show the following screenshot.

4) Expand the Transportation Equipment and Logistics industry to be able to select the General

Freight Trucking Industry index. When complete, select “Next” or the “Concepts” tab at the top.

In doing this, the screen will advance to show the following screenshot.

5) Under the “Concepts” tab, users should select “Prices”, “Input Costs”, “Demand” and “Show

Input Cost Breakdown”. These selections are necessary to have the appropriate indices reported. When complete, select “Next” or the “Statistics” tab at the top. In doing this, the screen will advance to show the following screenshot.

6) No selection is required on this tab (“Statistics”), but users may elect to have percentage change values reported with the indices if they choose. When complete, select “Next” or the “Finish” tab at the top. In doing this, the screen will advance to show the following screenshot.

7) Users should save these settings as a Purchasing Analyzer Workbook. This is necessary to have the Purchasing Analyzer re‐calculate the input cost index after fuel is excluded. Users have the ability to export the data into excel within the workbook. Once the workbook is named and saved, it will show up under the “PA Workbooks” on the left hand side of the screen. Once saved, select the workbook which will advance to a screen similar to the one below.

8) The “Criteria” tab will show selections previously made and allow users to make alternative selections within the workbook. Users should select the “Preview” tab to view the indices. In doing this, the screen will advance to show the following screenshot.

9) In the screen shot above, the index values for “Prices”, “Input Costs” and “Demand” would be reported where the black boxes/bars are shown. Below these indices, the workbook reports each of the input cost indices that go into developing the overall input cost index. The input cost indices would be reported where the blue box is shown. The red column on the left would show the IHS default for the share or weighting of each of the input costs. The red column on the right would show any user specified weightings of each of the input costs. The green block is where the user would specify the weighting for fuel costs. The orange blocks are where users would specify the weighting for the other input costs. These should not be altered. Since the

EPA clause specifies the use of the input cost index exclusive of fuel, the user should input 0 where the green block is shown and then select “Refresh” at the bottom of the workbook.

Selecting “refresh” will update and recalculate the overall input cost index reported at the top.

The Price index and Demand index will remain unchanged.

LEGEND

This box is where the Price/Input Cost/Demand indices are reported.

This box is where the input cost indices are reported.

This box is where the input cost weightings are shown.

This box is where users could adjust the weightings for other input costs

This box is where users should adjust the weighting to “0” for the fuel input cost.

10) Once the weighting for the fuel cost is set to “0” and the workbook is refreshed, the input cost index now represents the input cost exclusive of fuel. Users would then use the input cost index exclusive of fuel and the demand index for the relevant time periods to determine the composite index according to the EPA clause.