I’m trying to understand what the typical frequency is for calculating price adjustments for inflation. Is it normally done monthly at each assessment interval or on a less frequent basis? Also would the frequency possibly be different based on which Main Option is being used?
If it helps I’m asking the question in the context of a Highway Term Maintenance Contract which could be using more than one Main Option for example Option A for Planned Highways Maintenance and Option E for Reactive Maintenance.
Thanks in advance.
in NEC4, the Prices are adjusted due to inflation at the ‘inflation adjustment dates’ (in italics) which are stated in the Contract Data as specific dates, although they could be referenced back to the Contract Date e.g. the first anniversary of it, then the second etc.
The normal interval is one year.
Thank you for the response. Could I ask if a valid approach to this (within a software application) would be as follows - if X19 and Main Option A was being used:
Provide a process that would sum up all of the schedule of rate items and quantities specified on all the task orders issued in the 12 month period
separate these out into the relevant inflation index categories, look-up the base and latest index percentages and apply the calculated increase to each task order as a supplementary payment?
If I may also ask - Am I correct in thinking that there would be two sets on inflation increases that would need to be managed i.e. inflation index related to schedule codes, but also inflation indexes to resources such as Labour, Materials, Plant etc. that would be used as part of Defined Cost calculations?