Price Adjustment Clauses

A price adjustment clause (PAC) is a contractual mechanism that allows a contractor to be at least partially protected against material or fuel price increases that may occur between the contract award and the execution of the work. According to a 2011 study, 47 out of 50 state departments of transportation (DOTs) use price adjustment clauses. PACs have the advantages of decreased bid prices, more bidders and fewer bid retractions, better market stability, better reliability in the supply chain, and more consistent contractor profit margins. Since the Texas Department of Transportation (TxDOT) does not currently use PACs and there are some risks associated with them, researchers examined the feasibility of establishing PACs in Texas.

Language

  • English

Media Info

  • Media Type: Web
  • Edition: Project Summary
  • Features: Figures;
  • Pagination: 2p

Subject/Index Terms

Filing Info

  • Accession Number: 01481627
  • Record Type: Publication
  • Report/Paper Numbers: 0-6799
  • Files: TRIS, ATRI, USDOT, STATEDOT
  • Created Date: May 13 2013 12:05PM