Price adjustment clauses : report.

PDFTech ReportFHWA/TX-13/0-6799-1Project 0-6799Construction projectsCompetitive biddingContract administrationCostsPricesCommoditiesTexasTexas. Dept. of TransportationNewcomb, David E.Lenz, RusselEpps, JonTexas A&M Transportation InstituteUnited States. Federal Highway AdministrationNTL-ECONOMICS AND FINANCE-ECONOMICS AND FINANCENTL-HIGHWAY/ROAD TRANSPORTATION-Construction and MaintenanceUS Transportation CollectionPrice adjustment mechanisms exist to account for fluctuations in commodity or labor prices and havebeen used for highway construction in 47 states. They are useful in stabilizing bid prices in times ofeconomic uncertainty and preventing defaults on contracts. This study examined the feasibility ofestablishing price adjustment practices on highway construction contracts in Texas. Researchers found thatthere is not a consensus among TxDOT districts or contractors about using price adjustment clauses (PACs),but those who favor such would use them for longer term, higher value projects if they were to be instituted.Because there is not a clear agreement at this time among contractors and among TxDOT personnelinterviewed, implementation of PACs on construction projects cannot be recommended