Pursuant to 16.203-4(91)(iv) insert the following clause:
(a) WARRANTIES. The Contractor warrants that-
allowances for any portion of the contingency covered by this clause;
(2) The Contract Line Items included in the TABLE (paragraph (f)) are subject to the Preference for Domestic Specialty Metals clause of this contract; and
(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) "Market price indicator," as specified in column 5 of the TABLE is the measure of changes in the market price of the material cost for the specialty metal(s) included in the contract price of the contract line item Numbers (CLINs) subject to adjustment under this clause.
(2) "Base unit price" is the unit price of a CLIN listed in the TABLE, as applicable, during the initial contract period, or during an option period, exclusive of any price adjustment pursuant to this clause.
(3) "Base period" is the three calendar months preceding the month containing, as applicable, the closing date for receipt of offers (final proposal revisions if discussions were held) under negotiation procedures or the date of bid opening under sealed bid procedures. In addition, if the contract includes a period option, the base period is the arithmetic average of the three calendar months immediately preceding the month prior to the month containing the effective date for the option exercised.
(4) "Base market price indicator" (BMPI) for a CLIN listed in the TABLE is the arithmetic average of the market price indicator values for the base period for the specialty metal(s) specified in column (2) of the TABLE for that CLIN.
(5) “Base specialty metals cost” (BSMC) for a CLIN listed in the TABLE is the dollar value of the direct materials cost of a specialty metal as recorded in Column (4) of the TABLE for such item.
(6) “Adjustment period” for purposes of this contract, will be: (if none marked, adjustments will be done annually)
( ) Quarterly - adjustments will be calculated following the publication of the market price indicator for the second month in each consecutive three calendar month period.
( ) Semi-annually - adjustments will be calculated following the publication of the market price indicator for the fifth month in each consecutive six calendar month period.
( ) Annually - adjustments will be calculated following the publication of the market price indicator for the eleventh month in each consecutive twelve calendar month period.
(7) "Adjusting market price indicator" (AMPI) for a CLIN listed in the TABLE during the first adjustment period of contract performance is the arithmetic average of the market price indicator values for the three months immediately preceding the month prior to the first month of contract performance. For subsequent adjustment periods, the adjusting market price indicator for such CLIN is the arithmetic average of the three calendar months immediately preceding the month prior to the first month of the current adjustment period for which a prospective adjustment is being calculated.
(8) “Adjusted specialty metal material cost” is the base specialty material cost, adjusted as specified in paragraph (c)(2) on a prospective basis.
(9) “Non-specialty metals base price” is the base unit price for a CLIN minus the base specialty metal material cost for that CLIN.
(10) “Adjusted CLIN unit price” is sum of the adjusted specialty metal material unit cost and the non-specialty metals unit price rounded to four decimal places.
(c) ADJUSTMENTS.
(1) Promptly following publication of the market price indicator(s) for the month specified in paragraph (b)(5) of the current adjustment period, the Contracting Officer shall calculate the adjusted specialty metal material price(s) and adjusted contract line item unit price(s), and modify the contract accordingly to incorporate CLIN prices that will be applicable to new orders issued during the next adjustment period.
(2) CALCULATIONS. All calculations shall be rounded to four decimal places. On the month prior to the beginning of the next adjustment period, the price adjustment(s) shall be calculated as follows:
(A) Compute the adjusting market price indicator (AMPI) for a CLIN, i.e., the arithmetic average of prices published for the indicator(s) shown in Column (5) of the TABLE for such CLIN, for the three month period preceding the current month.
(B) Using the base market price indicator (BMPI) (Column (6) of TABLE and the adjusting market price indicator (AMPI) computed per (A) above, calculate the market price indicator percentage change as follows:
AMPI - BMPI = ± market price indicator change percentage (MPIC %)
BMPI
BSMC $ x MPIC % = ± specialty metal price change (SMPC)($)
± SMPC + BSMC = adjusted specialty metal cost per CLIN Material Price
Note: If more than one specialty metal is included in the TABLE for a CLIN, the SMPC is calculated for each using the former of the above two formulas and the change for each (increase or decrease) added to the BSMC to calculate the adjusted specialty metal cost per CLIN (vice the latter formula above.)
(3) MODIFICATIONS. Price adjustments under this clause shall be effected by contract modification showing the base unit price(s), calculation of the adjusting market price(s), the base contract line item unit price, and the calculations used to arrive at the adjusted contract line item unit price(s).
(4) INVOICES. The prices invoiced and payable under this contract shall be based on the unit price(s) in the contract on the date the order is awarded.
(5) FAILURE TO DELIVER. Notwithstanding any other provisions of this clause, no upward adjustment shall apply to product scheduled under the contract to be delivered before the effective date of the adjustment, unless the Contractor’s failure to deliver according to the delivery schedule results from causes beyond the Contractor’s control and without its fault or negligence, within the meaning of the Default clause of this contract.
(6) UPWARD CEILING ON ECONOMIC PRICE ADJUSTMENT.
(i) The Contractor agrees that the total increase in any specialty metal material cost pursuant to these economic price adjustment provisions shall not exceed ___% (percent) of the original material cost in any applicable contract year (whether a single year or multiyear program), except as provided hereafter.
(ii) If at any time the Contractor has reason to believe that within the near future a price adjustment under the provisions of this clause will be required that will exceed the current contract ceiling price for any item, the Contractor shall promptly notify the Contracting Officer in writing of the expected increase. The notification shall include a revised ceiling the Contractor believes is sufficient to permit completion of remaining contract performance, along with appropriate explanation and documentation as required by the Contracting Officer.
(iii) If an actual increase in the indicator would raise a contract unit price for an item above the current ceiling, the Contracting Officer may issue a contract modification to raise the ceiling. If the contract ceiling will not be raised, the Contracting Officer shall so promptly notify the Contractor in writing.
(7) REVISION OF MARKET PRICE INDICATOR. In the event -
(i) Any applicable market price indicator is discontinued or its method of derivation is altered substantially; or
(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 under (1) the basic contract and under (2) each option period, that the amounts invoiced during the period have applied all adjustments 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.
(f) TABLE. The offeror shall complete columns (1) through (4) in the TABLE which follows, for all items containing specialty metals subject to adjustment under this clause (see paragraph (a)(2)). The offeror shall include with its offer adequate data to support derivation of the dollar value of specified material in the base unit price subject to adjustment (column (4)). Data supplied shall, at a minimum, provide an informal cost breakdown reflecting the current raw material cost, the specialty metal specification and the quantity of material per contract line item unit price.
(1)
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(2)
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(3)
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(4)
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(5)
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(6)
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CLIN Subject to Adjustment
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Specialty Metal Subject to Adjustment
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Specialty Metal Amount per CLIN Unit of Issue
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Base Specialty Metals Cost (see paragraph (b)(5)) in CLIN Base Unit Price
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Specialty Metals Market price indicator identification and/or Name
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Base Market Price Indicator
(see paragraph (b)(4))
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SAMPLE CLIN 0000
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Titanium TT35
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2 lb
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$30
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Platts US SG INGOT Producer
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$14.10/lb
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(End of Clause)
Paragraph (b)(5) - Buyer fill-in of frequency of adjustment period (quarterly, semi-annually or annually).
Paragraph (c)(7)(i) - Buyer fill-in of EPA ceiling percentage. Unless approved by the Chief of the Contracting Office, the ceiling shall be no more than 10%.
Table (f) columns (1) though (4) are vendor fill-ins, column (5) is a buyer fill-in.
Use with Clause 52.217-9001 if contract will include options.
