Common use of ECONOMIC PRICE ADJUSTMENTS Clause in Contracts

ECONOMIC PRICE ADJUSTMENTS. Beginning upon completion of the Initial Term of the Agreement, Contractor’s Adjustment Factors shall be adjusted on each subsequent annual anniversary date of the Agreement to account for construction cost escalation or de-escalation according to the following: A Base Year Index shall be calculated by averaging the 12 month Construction Cost Indices (CCI) for the appropriate area (see below) published in the Engineering News Record (“ENR”) for the 12 months immediately prior to the month of the Agreement Effective Date. A Current Year Index shall be calculated by averaging the 12 month Construction Cost Indices (CCI) for the appropriate area (see below) published in the ENR for the 12 months immediately prior to the month of the annual Agreement anniversary. The Economic Price Adjustment shall be calculated by dividing the Current Year Index by the Base Year Index. Contractor’s original Adjustment Factors shall be multiplied by the Economic Price Adjustment to obtain Contractor’s new Adjustment Factors effective for the next 12 months. Averages shall be obtained by summing the 12 month indices and dividing by 12. 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: The fourth decimal place shall be rounded up when the fifth decimal place is five (5) or greater. The fourth decimal place shall remain unchanged when the fifth decimal place is less than five (5). ENR occasionally revises indices following their issuance. CCI’s used in the calculations described above shall be those currently published at the time the Economic Price Adjustment calculation is performed. No retroactive adjustments shall be made as a result of any ENR revision to its published indices. The economic price adjustment changes provided for above shall apply to both Primary and Alternate JOC Zones. For zones 1-9, the San Francisco CCI published in ENR shall be utilized as the basis for the adjustment. For zones 10-14, the Los Angeles CCI published in ENR shall be utilized as the basis for the adjustment. The Progen software program will implement the changes to the Adjustment Factors.

ECONOMIC PRICE ADJUSTMENTS. Beginning upon completion of the Initial Term of the Agreement, Contractor’s Adjustment Factors shall be adjusted on each subsequent annual anniversary date of the Agreement to account for construction cost escalation or de-escalation according to the following: A Base Year Index shall be calculated by averaging the 12 month Construction Cost Indices (CCI) for the appropriate area (see below) published in the Engineering News Record (“ENR”) for the 12 months immediately prior to the month of the Agreement Effective Date. A Current Year Index shall be calculated by averaging the 12 month Construction Cost Indices (CCI) for the appropriate area (see below) published in the ENR for the 12 months immediately prior to the month of the annual Agreement anniversary. The Economic Price Adjustment shall be calculated by dividing the Current Year Index by the Base Year Index. Contractor’s original Adjustment Factors shall be multiplied by the Economic Price Adjustment to obtain Contractor’s new Adjustment Factors effective for the next 12 months. Averages shall be obtained by summing the 12 month indices and dividing by 12. 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: The fourth decimal place shall be rounded up when the fifth decimal place is five (5) or greater. The fourth decimal place shall remain unchanged when the fifth decimal place is less than five (5). ENR occasionally revises indices following their issuance. CCI’s used in the calculations described above shall be those currently published at the time the Economic Price Adjustment calculation is performed. No retroactive adjustments shall be made as a result of any ENR revision to its published indices. The economic price adjustment changes provided for above shall apply to both Primary and Alternate all JOC Zones. For zones 1-9, the San Francisco CCI published in ENR shall be utilized as the basis for the adjustment. For zones 10-14, the Los Angeles CCI published in ENR shall be utilized as the basis for the adjustment. The Progen software program will implement the changes to the Adjustment Factors.