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Clause Permits Adjustment To'established Prices' Only

Thursday, December 02, 2010 01:31 am

 

Price Adjustment

Appeal of: Tekkon Engineering Co., Ltd., 2010 ASBCA No. 56831 Lexis 72 (Sept. 28, 2010)

An economic price adjustment clause couldn't save a federal contractor from extreme construction cost increases or losses due to currency fluctuations.

Working under a contract with the U.S. government to supply water treatment chemicals and chlorine gas cylinders throughout Iraq, contractor Tekkon Engineering Co., Ltd. (Tekkon) incurred $34,000 in increased fuel costs and $190,000 in losses caused by currency fluctuations. The contractor sought an economic price adjustment (EPA) to its fixed-price indefinite delivery/indefinite quantity contract, but the Armed Services Board of Contract Appeals denied the claim. The contract's EPA clause did not cover increased contractor costs, nor could Tekkon show reliance on a prior course of dealing. The Board also den [...]

 
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