Common use of Calculation of CPI Adjustment Clause in Contracts

Calculation of CPI Adjustment. Price adjustments using the CPI involve changing the base payment by the percent change in the level of the CPI between the reference period and a subsequent time period. This is calculated by first determining the index point change between the two periods and then the percent change. The price adjustment shall be calculated as follows. Take the CPI for the 3rd month prior to the month of the start date of the Contract and subtract this figure from the CPI value for the 3rd month prior to the anniversary date of the Contract. (e.g., if start date begins in December, use the September CPI). That sum is then divided by the CPI value for the original 3rd month prior to start date and this result is then multiplied by 100 to equal the percent change that is the price adjustment value. This percentage of increase or decrease shall be applied to the Contract year, effective on the latter of the anniversary date or upon notification by OGS/PSG. The following example illustrates the computation of percent change: CPI for current period 136.0 Less CPI for previous period (-) 129.9 Equals index point change = 6.1 Divided by previous period CPI ÷ 129.9 Equals = 0.047 Result multiplied by 100 = 0.047 x 100 Equals percent change = 4.7%

Calculation of CPI Adjustment. Price adjustments using the CPI involve changing the base payment by the percent change in the level of the CPI between the reference period and a subsequent time period. This is calculated by first determining the index point change between the two periods and then the percent change. The price adjustment shall be calculated as follows. Take the CPI for the 3rd month prior to the month of the start date of the Contract and subtract this figure from the CPI value for the 3rd month prior to the anniversary date of the Contract. (e.g., if start date begins in December, use the September CPI). That sum is then divided by the CPI value for the original 3rd month prior to start date and this result is then multiplied by 100 to equal the percent change that is the price adjustment value. This percentage of increase or decrease shall be applied to the Contract year, effective on the latter of the anniversary date or upon notification by OGS/PSG. The following example illustrates the computation of percent change: CPI for current period 136.0 Less CPI for previous period (-) 129.9 133.0 Equals index point change = 6.1 3.0 Divided by previous period CPI ÷ 129.9 133.0 Equals = 0.047 0.0225 Result multiplied by 100 = 0.047 0.0225 x 100 Equals percent change = 4.72.25%

Calculation of CPI Adjustment. Price Rate adjustments using the CPI involve changing the base payment Hourly Wage Rate by the percent change in the level of the CPI between the reference period and a subsequent time period. This is calculated by first determining the index point change between the two (2) periods and then the percent change. The price rate adjustment shall must be calculated as follows. Take the CPI for the 3rd month prior to the month of the start date of the Contract and subtract this figure from the CPI value for the 3rd month prior to the anniversary date of the Contract. (e.g.For example, if the start date begins in December, use the September CPI). That sum is then divided by the CPI value for the original 3rd month prior to start date and this result is then multiplied by 100 to equal the percent change that is the price rate adjustment value. This percentage of increase or decrease shall must be applied to the Contract year, effective on the latter of the anniversary date or upon notification by OGS/PSGthe OGS HBITS Team. The following example illustrates the computation of percent change: CPI for current period 136.0 Less CPI for previous period (-) - 129.9 Equals index point change = 6.1 Divided by previous period CPI ÷ / 129.9 Equals = 0.047 Result multiplied by 100 = 0.047 x 100 Equals percent change = 4.7%