252.216-7001 Economic Price AdjustmentNonstandard Steel Items.

As prescribed in 216.203-4 -70(b), use the following clause:

ECONOMIC PRICE ADJUSTMENT—NONSTANDARD STEEL ITEMS (JAN 2023)

(a) Definitions. As used in this clause—

“Base labor index” means the average of the labor indices for the three months which consist of the

month of bid opening (or offer submission) and the months immediately preceding and following that

month.

“Base steel index” means the Contractor's established price (see Note 6) including all applicable

extras of $________ per ____________ (see Note 1) for _______________ (see Note 2) on the date set for

bid opening (or the date of submission of the offer).

“Current labor index” means the average of the labor indices for the month in which delivery of

supplies is required to be made and the month preceding.

“Current steel index” means the Contractor's established price (see Note 6) for that item, including

all applicable extras in effect ___ days (see Note 3) prior to the first day of the month in which

delivery is required.

“Established price” is—

(1) A price which is an established catalog or market price of a commercial product sold in

substantial quantities to the general public; and

(2) The net price after applying any applicable standard trade discounts offered by the Contractor

from its catalog, list, or schedule price. (But see Note 6.)

“Labor index” means the average straight time hourly earnings of the Contractor's employees in the

____________ shop of the Contractor's ________________ plant (see Note 4) for any particular month.

“Month” means calendar month. However, if the Contractor's accounting period does not coincide

with the calendar month, then that accounting period shall be used in lieu of “month.”

(b) Each contract unit price shall be subject to revision, under the terms of this clause, to reflect

changes in the cost of labor and steel. For purpose of this price revision, the proportion of the

contract unit price attributable to costs of labor not otherwise included in the price of the steel item

identified under the “base steel index” definition in paragraph (a) shall be _____ percent, and the

proportion of the contract unit price attributable to the cost of steel shall be _____ percent. (See Note

5.)

(c)(1) Unless otherwise specified in this contract, the labor index shall be computed by dividing the

total straight time earnings of the Contractor's employees in the shop identified in paragraph (a) for

any given month by the total number of straight time hours worked by those employees in that

month.
(2) Any revision in a contract unit price to reflect changes in the cost of labor shall be computed

solely by reference to the “base labor index” and the “current labor index.”

(d) Any revision in a contract unit price to reflect changes in the cost of steel shall be computed

solely by reference to the “base steel index” and the “current steel index.”

(e)(1) Each contract unit price shall be revised for each month in which delivery of supplies is

required to be made.

(2) The revised contract unit price shall apply to the deliveries of those quantities required to be

made in that month regardless of when actual delivery is made.

(3) Each revised contract unit price shall be computed by adding—

(i) The adjusted cost of labor (obtained by multiplying ____ percent of the contract unit price by a

fraction, of which the numerator shall be the current labor index and the denominator shall be the

base labor index);

(ii) The adjusted cost of steel (obtained by multiplying ____ percent of the contract unit price by a

fraction, of which the numerator shall be the current steel index and the denominator shall be the

base steel index); and

(iii) The amount equal to ____ percent of the original contract unit price (representing that portion of

the unit price which relates neither to the cost of labor nor the cost of steel, and which is therefore

not subject to revision (see Note 5)).

(4) The aggregate of the increases in any contract unit price under this contract shall not exceed ten

percent of the original contract unit price.

(5) Computations shall be made to the nearest one-hundredth of one cent.

(f)(1) Pending any revisions of the contract unit prices, the Contractor shall be paid the contract unit

price for deliveries made.

(2) Within 30 days after final delivery (or such other period as may be authorized by the Contracting

Officer), the Contractor shall furnish a statement identifying the correctness of—

(i) The average straight time hourly earnings of the Contractor's employees in the shop identified in

paragraph (a) that are relevant to the computations of the “base labor index” and the “current labor

index;” and

(ii) The Contractor's established prices (see Note 6), including all applicable extras for like quantities

of the item that are relevant to the computation of the “base steel index” and the “current steel

index.”

(3) Upon request of the Contracting Officer, the Contractor shall make available all records used in

the computation of the labor indices.

(4) Upon receipt of the statement, the Contracting Officer will compute the revised contract unit

prices and modify the contract accordingly. No modification to this contract will be made pursuant

to this clause until the Contracting Officer has verified the revised established price (see Note 6).

(g)(1) In the event any item of this contract is subject to a total or partial termination for
convenience, the month in which the Contractor receives notice of the termination, if prior to the

month in which delivery is required, shall be considered the month in which delivery of the

terminated item is required for the purposes of determining the current labor and steel indices

under paragraphs (c) and (d).

(2) For any item which is not terminated for convenience, the month in which delivery is required

under the contract shall continue to apply for determining those indices with respect to the quantity

of the non-terminated item.

(3) If this contract is terminated for default, any price revision shall be limited to the quantity of the

item which has been delivered by the Contractor and accepted by the Government prior to receipt

by the Contractor of the notice of termination.

(h) If the Contractor's failure to make delivery of any required quantity arises out of causes beyond

the control and without the fault or negligence of the Contractor, within the meaning of the clause of

this contract entitled “Default,” the quantity not delivered shall be delivered as promptly as possible

after the cessation of the cause of the failure, and the delivery schedule set forth in this contract

shall be amended accordingly.

NOTES:

1 Offeror insert the unit price and unit measure of the standard steel mill item to be used in the

manufacture of the contract item.

2 Offeror identify the standard steel mill item to be used in the manufacture of the contract item.

3 Offeror insert best estimate of the number of days required for processing the standard steel mill

item in the shop identified under the “labor index” definition.

4 Offeror identify the shop and plant in which the standard steel mill item identified under the “base

steel index” definition will be finally fabricated or processed into the contract item.

5 Offeror insert the same percentage figures for the corresponding blanks in paragraphs (b),

(e)(3)(i), and (e)(3)(ii). In paragraph (e)(3)(iii), insert the percentage representing the difference

between the sum of the percentages inserted in paragraph (b) and 100 percent.

6 In negotiated acquisitions of nonstandard steel items, when there is no “established price” or when

it is not desirable to use this price, this paragraph may refer to another appropriate price basis, e.g.,

an established interplant price.

(End of clause)

Parent topic: 252.216 RESERVED