Common use of Economic Price Adjustment Clause in Contracts

Economic Price Adjustment. The Adjustment Factors may be updated on each anniversary of the award date to account for changes in construction costs, provided, the Contractor requests in writing, thirty days prior to the anniversary of the award date, that the Adjustment Factors be updated. Such request shall be delivered to the County and to Gordian. In the event the Contractor fails to deliver the request timely, then the County shall determine the date on which the Adjustment Factors will be updated, but in no event will such date be later than thirty days after the written request to update the Adjustment Factors is received by the County. Thereafter, the Contractor’s Adjustment Factors will be adjusted according to the following: 6.1.1. The Contractor’s Normal Working Hours and Restricted Working Hours Adjustment Factors will be adjusted according to the following: 6.1.1.1. A Base Year Index shall be calculated by averaging the 12 month Construction Cost Indices (CCI) for the average of the twenty cities published in the Engineering News Record (ENR) for the 12 months immediately prior to the month of the bid due date (e.g. April bid date, Base Year Index is April of the prior year to March of the bid date year). 6.1.1.2. A Current Year Index shall be calculated by averaging the 12 month Construction Cost Indices (CCI) for the average of the twenty cities published in the Engineering News Record (ENR) for the 12 months beginning with the month of anniversary of the bid due date (e.g. April bid date, Current Year Index is April of the prior year to March of the current year). 6.1.1.3. The Economic Price Adjustment shall be calculated by dividing the Current Year Index by the Base Year Index. 6.1.1.4. The Contractor’s original Adjustment Factors shall be multiplied by the Economic Price Adjustment to obtain the Contractor’s new Adjustment Factors effective for the next 12 months. 6.1.1.5. Averages shall be obtained by summing the 12 month indices and dividing by 12. 6.1.1.6. All calculations in this article shall be carried to the fifth decimal place and rounded to the fourth decimal place. The following rules shall be used for rounding: 6.1.1.7. The fourth decimal place shall be rounded up when the fifth decimal place is five (5) or greater. 6.1.1.8. The fourth decimal place shall remain unchanged when the fifth decimal place is less than five (5).