PROCUREMENT INFORMATION MESSAGE.pdf

The document outlines guidelines for utilizing the Producer Price Index (PPI) for contract price adjustments in state contracts. It specifies steps for selecting commodity groups and items within those groups, recommends using unadjusted PPI indexes for stability, and emphasizes selecting a base index month at least eighteen months prior to the first price adjustment. The example provided demonstrates how to calculate price adjustments based on PPI data comparisons. Additionally, it discusses the option of using a Manufacturer's Price List (MPL) or a Percentage Price Increase clause for contract price adjustments if PPI adjustments are not suitable. The MPL section details conditions for using a manufacturer's price list, while the Percentage Price Increase clause outlines procedures for justifying and implementing price increases. Examples are given to illustrate the application of percentage price increases.