Common use of Retroactive Price Adjustments Not Permitted Clause in Contracts

Retroactive Price Adjustments Not Permitted. Price adjustment requests will not be granted retroactively for past years or years in which the Contractor failed to request price increase(s). However, contractor shall be entitled to “bank” potential price increases/decreases until such time Contract formally make a Price adjustment request. Example: Year 0: Price at Bid Due Date: $1.00 Year 1: No price adjustment request is made by Contractor. Had request been made, price would have been adjusted upward by 10%, measured from Year 0. New price, measured from Year 0, would have been $1.10. Year 2: No price adjustment request is made by Contractor. Had request been made, price would have been adjusted upward by 10%, measured from Year 1. New price, measured from Year 1. New price, measured from Year 1, would have been $1.21. Year 3: Price adjustment request is formally made by Contractor. Price can be adjusted upward by 10%, measured from Year 2. New price, measured from Year

Retroactive Price Adjustments Not Permitted. Price adjustment requests will not be granted retroactively for past years or years in which the Contractor failed to request price increase(s). However, contractor Contractor shall be entitled to “bank” potential price increases/decreases until such time Contract Contractor formally make makes a Price adjustment request. Example: Year 0: Price at Bid Due Date: $1.00 Year 1: No price adjustment request is made by Contractor. Had request been made, price would have been adjusted upward by 10%, measured from Year 0. New price, measured from Year 0, would have been $1.10. Year 2: No price adjustment request is made by Contractor. Had request been made, price would have been adjusted upward by 10%, measured from Year Year 1. New price, measured from Year 1. New price, measured from Year 1, would have been $1.21. Year 3: Price adjustment request is formally made by Contractor. Price can be adjusted upward by 10%, measured from Year 2. New price, measured from YearYear 2. New price will be $1.33. In the above example, Contractor may charge for Year 3 at $1.33 but may not recover forgone price increase it would have been entitled to from years 1 and 2.