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DSCR

DSCR I84V: ECONOMIC PRICE ADJUSTMENT-PRICE INDEX

I84V	52.216-9G46 ECONOMIC PRICE ADJUSTMENT – PRICE INDEX  (JUL 2006)        
and 
I16F49

(a)  WARRANTIES.  The Contractor warrants that--
	
	(1)  The base unit prices set forth in the Schedule do not include
allowances for any portion of the contingency covered by this clause; and

	(2)  The prices to be invoiced shall be computed in accordance with
the provisions of this clause.

(b)  DEFINITIONS.  As used throughout this clause--
         	
	(1)  "Price Index" is the economic indicator for the purpose of 
price adjustment.  For purposes of this contract the index shall be: 
_________________________________________________________________________

         (2)  "Base unit price" is the unit price applicable to a quantity
of a contract line item scheduled for delivery 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 date of bid opening under sealed bid 
procedures or the closing date for receipt of offers (best and final offers,
if discussions were held) under negotiation procedures.

       	 (4)  "Base price index" is the arithmetic average of the price 
index values for the base period.

       	 (5)  "Adjusting price index" for items scheduled for delivery during
the first three calendar months of contract performance is the arithmetic 
average of the initial price index values applicable to the three months 
immediately preceding the month prior to the first month of contract
performance.  For subsequent quarterly periods, the adjusting price index is
the arithmetic average of the three calendar months immediately preceding
the month prior to the first month of the three month contract period for
which a prospective adjustment is being calculated.

	 (6)  "Adjusted contract unit price" is the base unit price, adjusted
quarterly on a prospective basis and rounded to four decimal places.

	 (7)  "Final adjusting index" is used for retroactive adjustments to
the contract price.  For timely and for excused late shipments, it is the
arithmetic average of the final index values applicable to the three months
immediately preceding the month of shipment specified in the contract 
schedule or relevant delivery order.  For any unexcused late shipment, the 
final adjusting index is computed by using either: 

		(i) the final index values applicable to the three months
immediately preceding the month in which shipment is specified in the 
schedule or relevant delivery order or, 

	    (ii) the final index values applicable to the three months 
immediately preceding the month in which actual shipment was made, whichever
produces the lower final adjusting market indicator value.
	
(c)  ADJUSTMENTS.

	(1) Two types of price adjustments shall be used:

		(i)  PROSPECTIVE.  Promptly following publication of the 
price index for the second month in each consecutive three calendar month 
period of contract performance, the Contracting Officer shall calculate the
adjusting index and any adjusted contract unit price(s), and modify the 
contract accordingly.

		(ii)  RETROACTIVE.  A further adjustment to prices paid for
shipments shall be made in the event publication of a revised index value 
would result in an increase or decrease from the initial adjusting index 
(if any, otherwise the base index), subject to the limitations in paragraphs
(3) and (6) below.  The Contractor shall promptly notify the Contracting 
Officer in writing upon such publication.  The notice shall include the 
Contractor's calculations of the contract price adjustment, along with proof
of shipment dates, quantities, and any other supporting documentation required
by the Contracting Officer.  If the contractor fails to notify the Contracting 
Officer promptly of a decrease, or agreement on any adjustment cannot be 
reached, the Contracting Officer may determine the applicable change and make 
a unilateral contract price adjustment.

	(2)  CALCULATIONS.  All calculations shall be rounded to four 
decimal places.

	(3)  MODIFICATIONS.   Price adjustments under this clause shall be 
effected by contract modification showing the base index, calculation of the 
adjusting index, the base unit price, and the calculations used to arrive at 
the adjusted contract unit price(s).		
		(i) Modifications for retroactive adjustments shall identify
prior invoices and payments for the shipped items, and the total net price 
adjustment (increase or decrease).

		(ii)  No adjustment shall be made under this clause unless the 
total change in the contract amount is $1,000 or more.

	    (iii)  The contractor’s entitlement to a price increase based on 
the final adjusting index shall be waived unless the contractor’s written 
request is received by the Contracting Officer within 240 days following the 
contract delivery date.	

	 (4)  INVOICES.  The prices payable under this contract will be based 
on the latest adjusted unit price incorporated into the contract.  In the 
event the adjusted unit price is not yet available for the month in which 
deliveries were made, the most recent adjusted unit price for the particular 
item shall be invoiced subject to retroactive adjustment.

	(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.  The Contractor agrees 
that the total increase in any contract unit price pursuant to these economic 
price adjustment provisions shall not exceed ___% (percent) of the original 
base unit price in any applicable contract year (whether a single year or 
multiyear program), except as provided hereafter.

          (i)  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 carevised 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.

			 (ii)  If an actual increase in the price index 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 PRICE INDEX.  In the event –

			(i)  Any applicable price index is discontinued or its 
method of derivation is altered substantially; or

			 (ii)  The Contracting Officer determines that the price 
index 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 index 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]