Difference between revisions of "Escalation and Economic Indexes"
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== Escalation == | == Escalation == | ||
| + | There are 2 ways that companies commonly protect itself for the pricing of future sales. They are: | ||
| + | |||
| + | :* Including language in proposals, reserving for the right to renegotiate the price of a contract if a price index exceeds a certain amount, | ||
| + | |||
| + | :* Including escalation factors in the pricing of proposals. | ||
== Economic Indexes == | == Economic Indexes == | ||
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* Consumer Price Index | * Consumer Price Index | ||
| + | ==Material Escalation== | ||
| + | See [[Producer Price Index (PPI)]] | ||
== Global Insight == | == Global Insight == | ||
http://www.ihs.com/products/global-insight/country-analysis/us-industry-economic-forecasts.aspx | http://www.ihs.com/products/global-insight/country-analysis/us-industry-economic-forecasts.aspx | ||
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[[Escalation and Economic Indexes]] | [[Escalation and Economic Indexes]] | ||
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==References and Notes== | ==References and Notes== | ||
Revision as of 12:16, 15 April 2015
Contents |
Escalation
There are 2 ways that companies commonly protect itself for the pricing of future sales. They are:
- Including language in proposals, reserving for the right to renegotiate the price of a contract if a price index exceeds a certain amount,
- Including escalation factors in the pricing of proposals.
Economic Indexes
DCAA uses Economic Indexes in Proposal Audits. DCAA considers both inflation (cost of living) as well as the effects of other general economic changes. That information is can only be obtained via DCAA's Intranet, which means it is unavailable to the general public. The location of the "internal " information is DCAAP 7641.74, Use of Economic Indexes in Contract Audits.
If labor rates are to be adjusted to account for inflation alone, the Consumer Price Index, Urban Wage Earners and Clerical Workers (CPIW) should be used.[1]
Labor Escalation
Common Escalation Factors for Labor are:
- Global Insight
- Consumer Price Index
Material Escalation
See Producer Price Index (PPI)
Global Insight
http://www.ihs.com/products/global-insight/country-analysis/us-industry-economic-forecasts.aspx
Related Pages
Consumer Price Index, Urban Wage Earners and Clerical Workers (CPIW)
Escalation and Economic Indexes
References and Notes
- ↑ DCAA Contract Audit Manual, Appendix E, July 11, 2013, E25 (E-207)
