SUBPART 216.2--FIXED-PRICE CONTRACTS

(Revised July 11, 2006)

 

 

 216.203 Fixed-price contracts with economic price adjustment.
 216.203-4 Contract clauses.
 216.203-4-70 Additional clauses.


216.203  Fixed-price contracts with economic price adjustment.

 

216.203-4  Contract clauses.

 

      (1)  Generally, use the clauses at FAR 52.216-2, Economic Price Adjustment--Standard Supplies, FAR 52.216-3, Economic Price Adjustment--Semistandard Supplies, and FAR 52.216-4, Economic Price Adjustment--Labor and Material, only when—

 

              (i)  The total contract price exceeds the simplified acquisition threshold; and

 

              (ii)  Delivery or performance will not be completed within 6 months after contract award.

 

      (2)  Follow the procedures at PGI 216.203-4 (Pop-up Window or PGI Viewer Mode) when using an economic price adjustment clause based on cost indexes of labor or material.

 

216.203-4-70  Additional clauses.

 

      (a)  Price adjustment for basic steel, aluminum, brass, bronze, or copper mill products.

 

              (1)  The price adjustment clause at 252.216-7000, Economic Price Adjustment--Basic Steel, Aluminum, Brass, Bronze, or Copper Mill Products, may be used in fixed-price supply contracts for basic steel, aluminum, brass, bronze, or copper mill products, such as sheets, plates, and bars, when an established catalog or market price exists for the particular product being acquired.

 

              (2)  The 10 percent figure in paragraph (d)(1) of the clause shall not be exceeded unless approval is obtained at a level above the contracting officer.

 

      (b)  Price adjustment for nonstandard steel items.

 

              (1)  The price adjustment clause at 252.216-7001, Economic Price Adjustment--Nonstandard Steel Items, may be used in fixed-price supply contracts when—

 

                    (i)  The contractor is a steel producer and actually manufacturers the standard steel mill item referred to in the “base steel index” definition of the clause; and

 

                    (ii)  The items being acquired are nonstandard steel items made wholly or in part of standard steel mill items.

 

              (2)  When this clause is included in invitations for bids, omit Note 6 of the clause and all references to Note 6.

 

              (3)  Solicitations shall instruct offerors to complete all blanks in accordance with the applicable notes.

 

              (4)  When the clause is to provide for adjustment on a basis other than “established price” (see Note 6 of the clause), that price must be verified.

 

              (5)  The 10 percent figure in paragraph (e)(4) of the clause shall not be exceeded unless approval is obtained at a level above the contracting officer.

 

      (c)  Price adjustment for wage rates or material prices controlled by a foreign government.

 

              (1)  The price adjustment clause at 252.216-7003, Economic Price Adjustment--Wage Rates or Material Prices Controlled by a Foreign Government, may be used in fixed-price supply and service contracts when¾

 

                    (i)  The contract is to be performed wholly or in part in a foreign country; and

 

                    (ii)  A foreign government controls wage rates or material prices and may, during contract performance, impose a mandatory change in wages or prices of material.

 

              (2)  Verify the base wage rates and material prices prior to contract award and prior to making any adjustment in the contract price.