As prescribed in 16.203-4-90(c), use the following clause in solicitations and the resulting contracts for batteries acquired under the Battery Consignment Program, when the circumstances in FAR 16.203-4(d)(1) exist, unpredictable increases or decreases in the cost of the lead are expected, and the changes can be tracked by the London Metals Exchange standard lead pricing.
52.216-9029 ECONOMIC PRICE ADJUSTMENT LEAD, BATTERY CONSIGNMENT PROGRAM (FEB 2009)
(a) WARRANTIES. The contractor warrants that -
(1) The prices set forth in the Schedule do not include allowances for any contingency covered by this clause; and
(2) The contractor further agrees that there will be no price adjustment in the contract unit prices as provided by this clause for any additional costs incurred applicable to items purchased under this contract during the first 12 month contract period, nor prior to the effective date of a contract modification effecting such an adjustment.
(3) The prices to be invoiced shall be computed in accordance with the provisions of this clause.
(b) DEFINITIONS. As used throughout this clause-
(1) “Unit Price Subject to Adjustment” (UPSA) is the estimated unit lead price per battery. The Contracting Officer will calculate the UPSA at the time of award using the London Metals Exchange Standard Lead average price for the most recent month available at the time of award, and the Government estimate of the number of pounds of lead required for each battery. The UPSA shall remain fixed throughout the life of the contract, including option periods and shall not be affected by any adjustment under this clause. For purposes of this contract, the Government’s estimate of the number of pounds of lead required for each battery is as follows:
CLIN/NSN GOVT ESTIMATED LBS OF LEAD/BATTERY
______________________ __________________________
______________________ __________________________
______________________ __________________________
(2) “Total Adjusted Lead Price” (TALP) for each contract year after the first is the price of the lead contained in each battery at the time of adjustment based on the Government estimated pounds and the London Metal Exchange Standard Lead monthly average from the tenth month of the preceding contract year.
(3) For purposes of this clause, “contract year” is a 365-day (366-day for leap year) period beginning with and including the first effective day of each contract performance/ordering period.
(4) “Adjustment Band” is the minimum percentage increase or decrease in the TALP compared to the UPSA (for the first adjustment) or the previous contract year’s TALP (for subsequent adjustments) required in order to warrant a price adjustment. For purposes of this contract, the adjustment band is +___% to -___%. When the percentage change is less than the specified percentages, no price adjustment will be made.
(5) “Adjusted Contract Unit Price” is the revised unit price of the specified CLIN/NSN, based on the TALP.
(c) ADJUSTMENTS.
(1) The calculation required for adjustment of the contract item unit prices shall be calculated before the beginning of each contract year after the first. Not more than 60 days and not less than 30 days prior to the end of the current contract year the contractor will submit the calculated TALP and, if applicable based on the adjustment band, the adjusted increased or decreased contract unit price to the contracting officer. The contractor shall also submit the London Metals Exchange Standard Lead prices used in the calculations.
(2) The calculation of the TALP for the next contract year shall be made by multiplying the Government estimated pounds of lead for each battery line item by the average of published final prices per pound for Standard Lead from the London Metals Exchange for the 10th month of the contract year in which the calculation is being made.
(3) If the percentage change between the TALP for the next contract year and the UPSA (for the first adjustment) or the current TALP (for subsequent adjustments) is equal to or greater than the percentages established in the adjusting band, then the calculated percentage change (up or down) will be applied to the current contract unit price to arrive at the adjusted contract unit price (correspondingly up or down) for each battery line item, which is applicable in the next contract year in accordance with (4) below.
(4) Any price adjustment under this clause will be effected by a contract modification showing the revised contract unit prices in Section B. The contracting officer may unilaterally determine the applicable price adjustment if the data required in paragraph (c)(1) of this clause is not submitted as required in paragraph (c)(1).
(6) UPWARD CEILING ON ECONOMIC PRICE ADJUSTMENT. The Contractor agrees that the total cumulative increase in any contract unit price pursuant to this economic price adjustment provision shall not exceed ___% (percent) of the original UPSA for each contract year. There is no limitation on the amount of decreases that may be made under this clause.
(7) REVISION OF MARKET PRICE INDICATOR. In the event -
(ii) The Contracting Officer determines that the market price indicator consistently and substantially fails to reflect market conditions, the parties shall mutually agree upon an appropriate and comparable substitute and the contract shall be modified to reflect such substitute effective on the date the price was discontinued, altered, or began to consistently and substantially fail to reflect market conditions.
(d) FINAL INVOICE. The Contractor shall include a statement on the final invoice that the amounts invoiced hereunder have applied all decreases required by this clause.
(e) DISPUTES. Any dispute arising under this clause shall be determined in accordance with and subject to the “Disputes” clause of the contract.
(END OF CLAUSE)
