We have an NEC3 Professional Services Contract with a major client that runs over several years and contains Option X1: Price Adjustment for Inflation.
We have just passed the annivarsary of the Contract and we are looking to apply the price adjutment.
Using the Contract as a Framework we are typically awarded individual tasks that last between 3 months and 3 years.
A task is awarded on the basis of a ceiling fee made up from tendered rates and a maximum agreed number of hours. Rates are calculated on an individual basis but, in some instances, are capped at a maximum figure depending on the grade of the individual.
We are allowed to amend our rates, subject to not exceeding the cap, if there is a change in salary.
To apply Option X1 am I correct in thinking the effects of inflation would lift the ceiling fee (for that part of the fee left for this year) and lift caps on the fee for each grade.
However, it would not change the rates themselves in this instance as we apply any changes that come about from a change in salary or other circumstance anyway.