Models for Estimating Economic Price Adjustment (EPA) Fund Requirements

Abstract

In the current economic environment, it is prudent strategy for the Government to avoid the use of Economic Price Adjustment (EPA) clauses in procurement contracts. However, many vendors are insisting upon the inclusion of contractual EPA stipulations as a hedge against inflation. Consistent with the use of EPA clauses, Procuring Contracting Officers (PCO's) typically were committing EPA funds up to the contractual ceiling to assure that an over obligation of funds (an RS3679 violation) would never occur; a practice found to reserve funds in excess of requirements. Examined herein are current methods of determining the level of EPA funds to be reserved and the development of some improved methods for estimating these requirements. This management tool provides structured formulae which can improve justification of retained/ committed EPA funds and allow the release of committed funds for use elsewhere.

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Document Details

Document Type
Technical Report
Publication Date
Feb 01, 1980
Accession Number
ADA082517

Entities

People

  • Gerald W. Kalal

Tags

Communities of Interest

  • Weapons Technologies

DTIC Thesaurus Topics

  • Ammunition
  • Business Administration
  • Contractors
  • Contracts
  • Cost Analysis
  • Cost Estimates
  • Cost Models
  • Costs
  • Fringe Benefits
  • Mathematical Models
  • Models
  • Organizational Structure
  • Price Index
  • Procurement
  • Regression Analysis
  • Small Arms
  • Statistics

Readers

  • Environmental Engineering.
  • Government and Public Administration Law.
  • Life Cycle Cost Analysis