######### Section 109. --- MEASUREMENT AND PAYMENT

Revised 23 September 2008

[]{.mark}

+-----------------------------------------------------------------------+
| **FUeL Price Adjustment Provision**                                   |
|                                                                       |
| **Coordination on the use of this provision must be sought with       |
| Acquisitions, Construction, and Materials.**                          |
|                                                                       |
| The use of this price adjustment provision **must be evaluated on a   |
| project-by-project basis** and is only applicable when included by    |
| the Government for a specific project. Use this price adjustment      |
| provision on single or multiple season contracts/projects, when (1)   |
| the contract involves an extended period of performance with          |
| significant costs to be incurred beyond one year after performance    |
| begins, (2) the contract amount subject to adjustment is substantial, |
| (3) the economic variables for materials and supplies are too         |
| unstable to permit a reasonable division of risk between the          |
| Government and the Contractor, without this type of provision; (4)    |
| the price of materials and/or supplies is extremely volatile, (5)     |
| suppliers are unable to provide price quotations for the usual term   |
| of the contract, (6) price quotes are based on the date of delivery   |
| or spot market conditions and (7) shortages are expected. The price   |
| adjustment provision should only be applied to the specific price     |
| volatile materials and/or supplies called out below.                  |
+-----------------------------------------------------------------------+

**109.06 Pricing of Adjustments.** Add the following:

**FUEL PRICE ADJUSTMENT PROVISION**

**[GENERAL]{.underline}** The Fuel Price Adjustment Provision provides
for a price adjustment in the form of a payment to the Contractor or a
rebate to the Government for fluctuations in the cost of diesel fuel
consumed in the performance of applicable construction work. The price
adjustment provisions are applicable only to those contract items listed
as eligible pay items in Table 1 below, if diesel is used as the primary
fuel in the production of the affected items.

The price adjustment provisions are also applicable when the Government
adds extra work to the eligible pay items already existing under the
Contract.

The provision will remain in effect throughout the duration of the
contract. Enactment of the Fuel Price Adjustment Provision will only be
considered when the **increase or decrease** in the price of diesel fuel
as defined herein exceeds 10 percent.

The Fuel Price Adjustment Provision is intended to reduce but not
eliminate the cost effects of price uncertainty to the Contractor and
the Government for diesel fuel consumed in the construction of this
contract. It provides for sharing by the Government in a portion of the
Contractor's risk, which could result from unusual price fluctuations.
The provision is not intended to compensate the Contractor for normal
day-to-day fluctuations and seasonal changes or to serve as a guarantee
of full compensation for diesel fuel price fluctuations.

+-----------------------------------------------------------------------+
| EFLHD will revise the following policy/procedures.                    |
|                                                                       |
| The Construction Branch is responsible for (1) purchasing the Oil     |
| Price Information Service (OPIS) newsletter; (2) selecting the        |
| applicable region and city; (3) calculating and posting price indexes |
| on an accessible web page and; (4) calculating and paying price       |
| adjustment compensations. In order to establish a reference for the   |
| base and monthly performance price indexes, the Oil Price Information |
| Service (OPIS) newsletter should be surveyed and an applicable region |
| and city inserted below. If possible, the city should be a large      |
| metropolitan area (i.e. a state capital) near the project site. A     |
| website address must also be inserted below where the Contractor and  |
| other interested parties can check Government postings of monthly     |
| price indexes. There could potentially be one web page for each       |
| project unless reference cities can be strategically selected to      |
| serve more than one project site. The Base and Monthly Performance    |
| Price Indexes for Low Sulfur No. 2 Diesel Fuel must also be           |
| calculated using weekly average rack price data obtained from OPIS    |
| for the applicable city. Weekly average rack price data from four     |
| consecutive reports will be averaged to obtain a Base Price Index as  |
| well as a Monthly Performance Price Index. The Base Price Index (BPI) |
| must be inserted below by Acquisitions in the conformed set. The      |
| Monthly Performance Price Index must be posted monthly by             |
| Construction on the website.                                          |
+-----------------------------------------------------------------------+

**[PRICE INDEXES]{.underline}** The Government will generate a monthly
performance price index for Ultra Low Sulfur, No. 2 Diesel Fuel using
price data obtained from the Oil Price Information Service (OPIS), which
publishes a weekly report on gasoline and distillate reseller prices for
major cities in five regions throughout the United States including the
East Coast (PADD 1), the Midwest (PADD 2), the Gulf Coast (PADD 3), the
Rockies (PADD 4) and the West Coast (PADD 5). Weekly average rack price
data reported for [(insert the applicable region and city)]{.mark} will
be averaged and used to establish a base price index, BPI, for this
project and a monthly performance price index, MPPI, for the duration of
the contract. These indexes are defined as follows:

-   **[BASE PRICE INDEX]{.underline}** The base price index, BPI, is the
    price index determined by the arithmetic average, as specified
    above, shown in the four weekly publications immediately preceding
    the bid opening. The BPI will be provided by the Government after
    contract award. It is as follows:

BASE PRICE INDEX (BPI) FOR ULTRA LOW SULFUR, NO. 2 DIESEL FUEL

PER GALLON = \$

-   **[MONTHLY PERFORMANCE PRICE INDEX]{.underline}** The monthly
    performance price index, MPPI, is the monthly price index at the
    time of performance of applicable work as determined by the
    arithmetic average, as specified above, shown in the four weekly
    publications issued prior to the last Wednesday of the month (i.e.
    the monthly performance price index during which diesel fuel is
    consumed in the performance of applicable construction work).

**[PRICE ADJUSTMENTS]{.underline}** Price adjustments are calculated by
the Government for average conditions and are not intended to reflect
the Contractor's actual purchase price. The ratio of the monthly
performance price index and the base price index (MPPI/BPI) is
calculated and used to determine price adjustments for eligible pay
items as follows:

-   **No Price Adjustment** -- When the ratio MPPI/BPI falls within the
    range of 0.90 to 1.10, no price adjustment will be made for any
    diesel fuel consumed in construction work performed during the
    relevant month.

-   **Government Rebate** -- When the ratio MPPI/BPI is calculated to be
    less than 0.90, the Government is due a rebate determined in
    accordance with the following formula:

> Government Rebate = \[0.90 -- (MPPI/BPI)\] (BPI) (Q) (FUF)

-   **Contractor Payment** -- When the ratio MPPI/BPI is calculated to
    be greater than 1.10, the Contractor is due additional payment
    determined in accordance with the following formula:

> Contractor Payment = \[(MPPI/BPI) -- 1.10\] (BPI) (Q) (FUF)
>
> The following definitions are applicable to both the Government Rebate
> and the Contractor Payment formulas:
>
> MPPI = Monthly Performance Price Index for the month during which
> diesel fuel is consumed in the performance of applicable construction
> work.
>
> BPI = Base Price Index that is established immediately preceding the
> bid opening.
>
> Q = Quantity of work on the project during the progress payment period
> for eligible pay items shown in Table 1 below. The Government will
> convert work quantities, as necessary, to agree with the units
> associated with the applicable Fuel Usage Factor.
>
> FUF = Fuel Usage Factor shown in Table 1 below applicable to both
> diesel and gasoline.

+--------------------------------+-----------------+------------------+
| **Table 1 -- Eligible Pay      |                 |                  |
| Items For Price Adjustments    |                 |                  |
| and Associated Fuel Usage      |                 |                  |
| Factors**                      |                 |                  |
+--------------------------------+-----------------+------------------+
| **Eligible Pay Items**         | **Fuel Usage    | **Fuel Usage     |
|                                | Factor**        | Factor**         |
|                                |                 |                  |
|                                | **U.S.          | **Metric Units** |
|                                | Customary       |                  |
|                                | Units**         |                  |
+--------------------------------+-----------------+------------------+
| **Earthwork:**                 |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 204 -- Excavation    | 0.30 gallons    | 0.39 gallons per |
| and Embankment**               | per cubic yard  | cubic meter      |
|                                |                 |                  |
| 20401 Roadway excavation       |                 |                  |
|                                |                 |                  |
| 20402 Subexcavation            |                 |                  |
|                                |                 |                  |
| 20403 Unclassified borrow      |                 |                  |
|                                |                 |                  |
| 20410 Select borrow            |                 |                  |
|                                |                 |                  |
| 20411 Select borrow            |                 |                  |
|                                |                 |                  |
| 20415 Select topping           |                 |                  |
|                                |                 |                  |
| 20416 Select topping           |                 |                  |
|                                |                 |                  |
| 20420 Embankment construction  |                 |                  |
|                                |                 |                  |
| 20421 Rock excavation          |                 |                  |
+--------------------------------+-----------------+------------------+
| **Aggregate Courses:**         |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 301 -- Untreated     | 0.70 gallons    | 0.77 gallons per |
| Aggregate Courses**            | per ton         | metric ton       |
|                                |                 |                  |
| 30101 Aggregate base           |                 |                  |
|                                |                 |                  |
| 30102 Aggregate base\*         |                 |                  |
|                                |                 |                  |
| 30103 Aggregate base\*         |                 |                  |
|                                |                 |                  |
| 30105 Subbase                  |                 |                  |
|                                |                 |                  |
| 30106 Subbase\*                |                 |                  |
|                                |                 |                  |
| 30107 Subbase\*                |                 |                  |
|                                |                 |                  |
| 30110 Aggregate Surface Course |                 |                  |
|                                |                 |                  |
| 30111 Aggregate Surface        |                 |                  |
| Course\*                       |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 302 -- Treated       | 0.70 gallons    | 0.77 gallons per |
| Aggregate Courses**            | per ton         | metric ton       |
|                                |                 |                  |
| 30201 Treated aggregate course |                 |                  |
|                                |                 |                  |
| 30202 Treated aggregate        |                 |                  |
| course\*                       |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 304 -- Aggregate     | 0.70 gallons    | 0.77 gallons per |
| Stabilization**                | per ton         | metric ton       |
|                                |                 |                  |
| 30401 Aggregate stabilization  |                 |                  |
| imported aggregate             |                 |                  |
|                                |                 |                  |
| 30402 Aggregate stabilization  |                 |                  |
| imported aggregate\*           |                 |                  |
|                                |                 |                  |
| 30405 Aggregate stabilization  |                 |                  |
| in-place aggregate\*           |                 |                  |
|                                |                 |                  |
| 30410 Aggregate stabilization  |                 |                  |
| imported surface               |                 |                  |
|                                |                 |                  |
| course aggregate\*             |                 |                  |
|                                |                 |                  |
| 30411 Aggregate stabilization  |                 |                  |
| imported surface               |                 |                  |
|                                |                 |                  |
| course aggregate\*             |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 309 -- Emulsified    | 0.70 gallons    | 0.77 gallons per |
| Asphalt Treated Base Course**  | per ton         | metric ton       |
|                                |                 |                  |
| 30901 Emulsified asphalt       |                 |                  |
| treated aggregate base         |                 |                  |
|                                |                 |                  |
| 30902 Emulsified asphalt       |                 |                  |
| treated aggregate base\*       |                 |                  |
|                                |                 |                  |
| 30903 Emulsified asphalt       |                 |                  |
| treated aggregate base\*       |                 |                  |
+--------------------------------+-----------------+------------------+
| **Asphalt Pavements:**         |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 401 -- Superpave Hot | 2.40 gallons    | 2.65 gallons per |
| Asphalt Concrete Pavement**    | per ton         | metric ton       |
|                                |                 |                  |
| 40101 Superpave pavement       |                 |                  |
|                                |                 |                  |
| 40102 Superpave pavement wedge |                 |                  |
| and leveling                   |                 |                  |
|                                |                 |                  |
| course                         |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 402 -- Hot Asphalt   | 2.40 gallons    | 2.65 gallons per |
| Concrete Pavement by Hveem or  | per ton         | metric ton       |
| Marshall Mix Design Method**   |                 |                  |
|                                |                 |                  |
| 40201 Hot asphalt concrete     |                 |                  |
| pavement, Marshall or          |                 |                  |
|                                |                 |                  |
| Hveem test                     |                 |                  |
|                                |                 |                  |
| 40202 Hot asphalt concrete     |                 |                  |
| pavement, Marshall or          |                 |                  |
|                                |                 |                  |
| Hveem test, wedge and leveling |                 |                  |
| course                         |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 403 -- Hot Asphalt   | 2.40 gallons    | 2.65 gallons per |
| Concrete Pavement**            | per ton         | metric ton       |
|                                |                 |                  |
| 40301 Hot asphalt concrete     |                 |                  |
| pavement                       |                 |                  |
|                                |                 |                  |
| 40302 Hot asphalt concrete     |                 |                  |
| pavement, wedge and            |                 |                  |
|                                |                 |                  |
| leveling course                |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 405 -- Open-Graded   | 2.40 gallons    | 2.65 gallons per |
| Asphalt Friction Course**      | per ton         | metric ton       |
|                                |                 |                  |
| 40501 Open-graded asphalt      |                 |                  |
| friction course                |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 408 -- Cold Recycled | 0.70 gallons    | 0.77 gallons per |
| Asphalt Base Course**          | per ton         | metric ton       |
|                                |                 |                  |
| 40801 Cold recycled asphalt    |                 |                  |
| base course                    |                 |                  |
|                                |                 |                  |
| 40802 Cold recycled asphalt    |                 |                  |
| base course\*                  |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 416 -- Continuous    | 0.15 gallons    | 0.18 gallons per |
| Cold Recycled Asphalt Base     | per square yard | square meter     |
| Course**                       |                 |                  |
|                                |                 |                  |
| 41602 Continuous cold recycled |                 |                  |
| asphalt base                   |                 |                  |
|                                |                 |                  |
| course                         |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 418 -- Foamed        | 0.30 gallons    | 0.36 gallons per |
| Asphalt Stabilized Base**      | per square yard | square meter     |
|                                |                 |                  |
| **Course** \[not in FP -       |                 |                  |
| called out by Special Contract |                 |                  |
| Requirements\]                 |                 |                  |
|                                |                 |                  |
| 41801 Foamed asphalt           |                 |                  |
| stabilized base course         |                 |                  |
+--------------------------------+-----------------+------------------+
| **Concrete Pavements:**        |                 |                  |
+--------------------------------+-----------------+------------------+
| **Section 501 -- Rigid         | 0.60 gallons    | 0.72 gallons per |
| Pavement**                     | per square yard | square meter     |
|                                |                 |                  |
| 50101 Reinforced rigid         |                 |                  |
| pavement                       |                 |                  |
|                                |                 |                  |
| 50102 Plain rigid pavement     |                 |                  |
+--------------------------------+-----------------+------------------+
| \* The Government will convert |                 |                  |
| work quantities, as necessary, |                 |                  |
| to agree with the units        |                 |                  |
| associated with the applicable |                 |                  |
| Fuel Usage Factor.             |                 |                  |
+--------------------------------+-----------------+------------------+

  -----------------------------------------------------------------------
  Select appropriate eligible pay items and delete those that do not
  apply. For each of the eligible contract pay items chosen above, a
  corresponding statement should be added to the applicable SCR payment
  subsection, which indicates that "A price adjustment will be made for
  fluctuations in the cost of diesel fuel consumed in the performance of
  any eligible pay items according to Subsection 109.06 Pricing of
  Adjustments Fuel Price Adjustment Provision." See end of provision for
  additional direction.

  -----------------------------------------------------------------------

**[PRICE ADJUSTMENT COMPENSATION]{.underline}** Monthly adjustments will
be accrued. The final price adjustment will be paid, or rebated, after
completion of all work for eligible pay items. The Contractor may
request in writing a partial price adjustment payment once every 12
months, or when the unpaid accrued increase exceeds \$10,000. The
Government will take a rebate when the deductive accrual exceeds
\$10,000.

No price adjustments will be made for work performed beyond the
Government-approved Contract completion date.

The maximum allowable monthly and final price adjustment to the
Contractor or rebate to the Government is limited to a (MPPI/BPI) ratio
of 1.6 and 0.4, respectively.

[Cut and insert the following into the appropriate Section (delete the
non-applicable Subsections):]{.mark}

204.17. 301.10. 302.11. 304.12. 309.10. 401.19. 402.19. 403.19. 405.13.
408.10. 416.12. 418.xx. 501.17. Add the following:

A price adjustment will be made for fluctuations in the cost of diesel
fuel consumed in the performance of any eligible pay items according to
Subsection 109.06 Pricing of Adjustments Fuel Price Adjustment
Provision.