WAGE RATE AND MATERIAL PRICE LEVEL ADJUSTMENT PROVISIONS IN DOD PROCUREMENT
LOGISTICS MANAGEMENT INST BETHESDA MD
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The study concluded that contractual provisions for price changes were preferred to contingency pricing by adding estimates of future price level changes to the contract price, for any contract where significant costs would be incurred more than one year after award. It was recommended that the BLS average hourly earnings of production workers in Durable Goods Manufacturing be used as the index for direct and indirect labor, and for labor-related elements of overhead accounts. In the absence of a detailed examination of the Bill of Material, it was recommended that equal proportions of the BLS wholesale price index numbers for Metals and Metal Products WPI-10 and Machinery and Equipment WPI-11 be used as the index for material and material-like elements of overhead accounts. Other recommendations were made concerning the specific application of contract provisions in both airframe contracts and Multi-Year Procurement.
- Logistics, Military Facilities and Supplies