03M09/22/06

S109-03M.doc

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  Use on all projects as needed.

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**Section 109. - MEASUREMENT AND PAYMENT**

+-----------------------------------------------------------------------+
| **ASPHALT CEMENT 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 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]{.underline}

**ASPHALT CEMENT Price Adjustment Provision**

**[GENERAL]{.underline}** The Asphalt Cement Price Adjustment Provision
contained herein provides for a price adjustment in the form of payment
to the Contractor or a rebate to the Government for fluctuations in the
cost of asphalt cement consumed in the performance of applicable
construction work for *(insert the applicable project)*. The price
adjustment provisions are applicable only to the asphalt cement, as
defined in Section 702.01, and incorporated in the following eligible
contract pay items:

-   40101 Superpave pavement

-   40102 Superpave pavement, wedge and leveling course

-   40201 Hot asphalt concrete pavement, Marshall or Hveem test

-   40202 Hot asphalt concrete pavement, Marshall or Hveem test, wedge
    and leveling course

-   40301 Hot asphalt concrete pavement

-   40302 Hot asphalt concrete pavement, wedge and leveling course

-   40501 Open-graded asphalt friction course

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  For each of the eligible contract pay items chosen above, a
  corresponding statement should be added to the applicable payment
  section, which indicates that "A price adjustment will be made for
  fluctuations in the cost of asphalt cement consumed in the performance
  of applicable construction work according to Subsection 109.06 Pricing
  of Adjustments Asphalt Cement Price Adjustment Provision."

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

The provision will remain in effect throughout the duration of the
contract. Enactment of the Asphalt Cement Price Adjustment Provision
will only be considered when the **[increase or decrease]{.underline}**
in the price of asphalt cement as defined herein exceeds 10 percent.

The Asphalt Cement Price Adjustment Provision is intended to reduce but
not eliminate the cost effects of price uncertainty to the Contractor
and the Government for asphalt cement used 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 asphalt cement price fluctuations.

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  The Construction Branch is responsible for (1) purchasing the Asphalt
  Weekly Monitor (AWM) newsletter; (2) selecting the applicable region
  and states; (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 Poten and Partners, Inc
  newsletter (i.e. Asphalt Weekly Monitor) should be surveyed and an
  applicable region and state inserted below. 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 projects are in the
  same state. The Base and Monthly Performance Price Indexes for Asphalt
  Cement must also be calculated using weekly high and low selling price
  data obtained from the Asphalt Weekly Monitor for the applicable state.
  Weekly high and low selling 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 post a monthly
performance price index at *(insert the applicable website)* for asphalt
cement using price data obtained from Poten and Partners, Inc. (PPI),
which publishes a weekly report (Asphalt Weekly Monitor) on high and low
selling prices for states in five regions throughout the United States
including the East Coast/Northeast, the Mid-Continent/Midwest, the Gulf
Coast/Mid South, the Rocky Mountains and the West Coast/Northwest.
Weekly high and low selling price data reported for *(insert the
applicable region and states)* 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 posted by the Government as determined by arithmetic
    average, as specified above, shown in the four weekly publications
    immediately preceding the bid opening. It is as follows:

> BASE PRICE INDEX (BPI) FOR ASPHALT CEMENT
>
> PER SHORT TON (TON) OR PER METRIC TON = \$

-   **[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 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 asphalt cement is used 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 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
    asphalt cement used 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)

-   **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)
>
> 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
> asphalt cement is used in the performance of applicable construction
> work.
>
> BPI = Base Price Index that is established immediately preceding the
> bid opening.
>
> Q = Quantity in metric tons of asphalt cement for eligible pay items
> that were used on the project during the progress payment period. The
> quantity will be calculated using the asphalt content of the approved
> mix design and the following formula:
>
> Q = Asphalt Concrete Pavement metric tons placed x (% Asphalt/100)

**[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.

+-----------------------------------------------------------------------+
| **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 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]{.underline}

**FUeL Price Adjustment Provision**

**[GENERAL]{.underline}** The Fuel Price Adjustment Provision contained
herein provides for a price adjustment in the form of payment to the
Contractor or a rebate to the Government for fluctuations in the cost of
motor fuel (both diesel and gasoline) consumed in the performance of
applicable construction work for *(insert the applicable project)*. The
price adjustment provisions are applicable only to contract items listed
as eligible pay items in Table 1 below, if gasoline and/or diesel are
used as the primary fuel in the production of the affected items. The
price adjustment provisions are also applicable to these eligible pay
items when the Government adds extra work to 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]{.underline}** in the price
of motor 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 motor fuel used 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 motor fuel price fluctuations

  -----------------------------------------------------------------------
  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 post a monthly
performance price index at *(insert the applicable website)* for 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)* 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 posted by the Government as determined by arithmetic
    average, as specified above, shown in the four weekly publications
    immediately preceding the bid opening. It is as follows:

> BASE PRICE INDEX (BPI) FOR 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 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 motor 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
    motor 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
> motor 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, to
> agree with the units associated with the applicable Fuel Usage Factor,
> will convert work quantities, as necessary.
>
> 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, to    |                 |                  |
| agree with the units           |                 |                  |
| associated with the applicable |                 |                  |
| Fuel Usage Factor, will        |                 |                  |
| convert work quantities, as    |                 |                  |
| necessary.                     |                 |                  |
+--------------------------------+-----------------+------------------+
| For each of the eligible       |                 |                  |
| contract pay items chosen      |                 |                  |
| above, a corresponding         |                 |                  |
| statement should be added to   |                 |                  |
| the applicable payment         |                 |                  |
| section, which indicates that  |                 |                  |
| "A price adjustment will be    |                 |                  |
| made for fluctuations in the   |                 |                  |
| cost of motor fuel (both       |                 |                  |
| diesel and gasoline) consumed  |                 |                  |
| in the performance of          |                 |                  |
| applicable construction work   |                 |                  |
| according to Subsection 109.06 |                 |                  |
| Pricing of Adjustments Fuel    |                 |                  |
| Price Adjustment Provision."   |                 |                  |
+--------------------------------+-----------------+------------------+

**[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 exceed \$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.

  -----------------------------------------------------------------------
  Use on all projects.

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

**109.08 Progress Payments.**

**(b) Closing date and invoice submittal date.** [Delete the last
sentence and substitute the following:]{.underline}

Submit invoices to the designated billing office by the 7th day after
the closing date. Invoices received by the designated billing office
after the 16th day following the closing date will not be accepted for
payment processing that month. Include late, unprocessed invoice
submittals in the following month\'s invoice.

**(e) Processing progress payment requests.**

> **(1) Proper invoices.** [Delete the title and text and substitute the
> following:]{.underline}
>
> **(1) Invoices received by the 7th day following the closing date.**
>
> *(a) Proper invoices.* If the invoice meets the requirements of
> Subsection 109.08(c), and the quantities and unit prices shown on the
> Contractor\'s invoice agree with the corresponding quantities and unit
> prices shown on the Government\'s receiving report, the invoice will
> be paid.
>
> *(b) Defective invoices.* If the invoice does not meet the
> requirements of Subsection 109.08(c), or if any of the quantities or
> unit prices shown on the Contractor\'s invoice exceed the
> corresponding quantities and unit prices shown on the Government\'s
> receiving report, the invoice will be deemed defective and the
> Contractor so notified according to FAR Clause 52.232-27(a)(2).
> Defective invoices will not be corrected by the Government and will be
> returned to the Contractor within 7 days after the Government\'s
> designated billing office receives the invoice.
>
> Revise and resubmit returned invoices by the 18th day following the
> closing date. The CO will evaluate the revised invoice. If the invoice
> still does not meet the requirements of Subsection 109.08(c), the
> Contractor will be so notified according to FAR Clause
> 52.232-27(a)(2), and no progress payment will be made that month.
> Correct the deficiencies and resubmit the invoice the following month.
>
> If the revised invoice meets the requirements of Subsection 109.08(c),
> but still had quantities or unit prices exceeding the corresponding
> quantities and unit prices shown on the Government\'s receiving
> report, the Government\'s data for that item or work will be used. The
> Contractor\'s invoice, as revised by the Government\'s receiving
> report, will be forwarded for processing by the 23rd day following the
> closing date. The Contractor will be notified by the 23rd day
> following the closing date of the reasons for any changes to the
> invoice.
>
> **(2) Defective invoices.** [Delete the title and text and substitute
> the following:]{.underline}
>
> **(2) Invoices received between the 8th and 16th day following the
> closing date.**
>
> *(a) Proper invoices.* If the invoice meets the requirements of
> Subsection 109.08(d), and the quantities and unit prices shown on the
> Contractor\'s invoice agree with the corresponding quantities and unit
> prices shown on the CO\'s receiving report, the invoice will be deemed
> proper and forwarded for processing within 7 days of receipt.
>
> *(b) Defective invoices.* If the invoice does not meet the
> requirements of Subsection 109.08(d), the invoice will be deemed
> defective, the Contractor so notified according to FAR Clause
> 52.232-27(a)(2), and no progress payment will be made that month.
> Correct the deficiencies and resubmit the invoice the following month.
>
> If the invoice meets the requirements of Subsection 109.08(d), but has
> quantities or unit prices exceeding the corresponding quantities and
> unit prices shown on the Government\'s receiving report, the
> Government\'s data for that item of work will be used. The
> Contractor\'s invoice, as revised by the Government\'s receiving
> report, will be forwarded for processing within 7 days of the
> Government\'s receipt of the invoice. The Contractor will be notified
> of the reasons for any changes to the invoice.

**(f) Partial payments.** [Add the following after the first
paragraph:]{.underline}

Partial payments for stockpiled manufactured material (aggregates) will
be based on Contractor process control test results. If test results
show the material to be out-of-specification, or in \"reject\" where
statistical evaluation procedures are used, no payment for stockpiled
materials will be made.