Escalation Clauses in Shipbuilding Contracts.

Abstract

Historically, shipbuilding contractors have been damaged financially while executing long term fixed price contracts during periods of rapidly rising prices. Escalation provisions have been incorporated in U.S. Navy shipbuilding contracts in an attempt to neutralize this adverse effect of inflation upon contractors. This thesis is an examination of the nature of two escalation clauses utilized by the Naval Sea Systems Command in long term shipbuilding contracts using a case study approach. The case discusses general price increases, characteristics of escalation clauses, the measurement of price changes, and the use of price indices. The importance of selecting proper indices is stressed by focusing on actual escalation experienced in the DD-963 SPRUANCE Class contract. A teaching note is provided which may be used in classroom discussion or for out-of-class assignment. (Author)

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Document Details

Document Type
Technical Report
Publication Date
Jun 01, 1978
Accession Number
ADA057910

Entities

People

  • John Demetrius Vellis Ii

Organizations

  • Naval Postgraduate School

Tags

Communities of Interest

  • Ground and Sea Platforms

DTIC Thesaurus Topics

  • Acquisition
  • Case Studies
  • Commodities
  • Congress
  • Construction
  • Contracts
  • Costs
  • Engineering
  • Fabrication
  • Governments
  • Indirect Costs
  • Materials
  • Measurement
  • Price Index
  • Procurement
  • Shipbuilding
  • United States

Readers

  • Library and Information Science/ Studies, Southeast Asia Studies, Bibliography of Vietnam and Lao Studies.
  • Military History of the United States in the 20th Century.
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