SECTION 698 - PRICE ADJUSTMENTS

I. GENERAL
Standard Specifications Section 698 Price Adjustments contains the requirements and calculation
formulas for providing additional compensation to, or repayment by, the Contractor for increases or
decreases in the price of asphalt, fuel, or steel/iron throughout the life of the contract.

II. FUEL AND ASPHALT PRICE ADJUSTMENTS

A. Eligible Work
Price adjustments are made for eligible work items that are listed in the contract proposal special
notes. Adjustment items (Items 698.04 and 698.05) are the contract items in which payments or
charges are entered on Daily Work Reports (DWRs) in Site Manager. Work performed by the
Contractor at its own expense will not be eligible for price adjustment. In addition, work performed
under Force Account is not eligible for price adjustment.

B. General Requirements
The pay quantities for eligible items must be recorded on DWRs that are dated within the same
months in which the work was performed. All DWRs with eligible adjustment item payments must
be authorized by the Engineer-In-Charge (EIC) in the Engineers Diary.

C. Adjustment Calculations
When the adjustments for Items 698.04 or 698.05 exceed the current contract amount, a Field
Change Payment (FCP) may be used if the FCP item (Item 697.03) is in the contract. The FCP
needs approval through the Regional Construction Engineer (RCE) only. If the FCP item is not in
the contract or if the FCP quantity has been exhausted, a Non-FCP Change Order (CO) is required.
Approval for a CO goes through the Office of the State Comptroller (OSC).

When final calculated adjustment values are negatives, the final quantity (i.e., Dollar-Cents entry) in
the clean-up CO needs to equal the original contract quantity (i.e., Dollar-Cents) plus the negative
paid quantity.
Example: if the original Item 698.05 quantity is 5,000.00 DC and the calculated adjustment
value is -$2,500.00, the DC quantity to be entered on the clean-up CO is -7,500.00 DC.

Business Intelligence (Site Manager) Fuel and Asphalt Reports automatically calculate adjustments
based on the formulas called out in Standard Specification Items 698.04 and 698.05.

D. Renegotiated / New Items

After the CO which contained the items with overrun quantities (that exceeded the minor or major
item renegotiation thresholds) is approved, an item entry with minus pay quantity(s) equal to the
initial item positive quantity(s) must be made on a DWR. For the DWR with the corresponding
minus item entry(s), use a date within the same month as the initial positive entry(s) (use a
Saturday or a Sunday if needed).

For work performed prior to when the Contractor submits an agreed price, no fuel or asphalt
adjustment item entry will be made If work is performed after an agreed price has been submitted,
adjustment amounts will need to be hand-calculated. For the base index, use the effective posted
index from the same month in which the agreed price was submitted. Use the formulas shown in
the Standard Specifications for the 698 Items and use the cost factors shown in the contract
proposal special notes. Manual calculations are only done for new or renegotiated eligible items
that are added by CO.

E. Payments
The Business Intelligence Fuel and Asphalt Reports (Site Manager) should be reviewed every time
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an estimate is generated. Payments or charges should be entered on every estimate. For items
that are paid initially as estimated (interim) quantities (i.e., earthwork items), the final fuel and
asphalt calculations should be made after all adjustable items are finalized but before the final
positive value estimate is closed. The final item entries need to be made in the same month/year
that initial (interim) quantity entries were made (use a Saturday or a Sunday if needed). If eligible
items are installed after the contract completion date, when an extension of time was approved with
the assessment of engineering charges and/or liquidated damages, the monthly average posted
price or monthly steel index in effect on the last contract completion date without the assessment of
engineering charges and/or liquidated damages, or the value for the month of installation/purchase,
whichever is less, will be used to compute price adjustments.

F. References
Fuel and Asphalt Price Adjustments Site Manager Quick Reference Guide (QRG)
https://www.dot.ny.gov/main/business-center/trns-port/repository/29_QRG-Fuel_Asphalt.pdf

Average posted prices for Fuel and Asphalt and list of Eligible Items and Conversion Factors
https://www.dot.ny.gov/main/business-center/contractors/construction-division/fuel-asphalt-steel-
price-adjustments.

III. STEEL/IRON PRICE ADJUSTMENTS

A. Eligible Work
In accordance with Standard Specifications §698-3.03 Steel/Iron Price Adjustment, within 30 days
of contract award the Contractor must provide the Engineer with a list of materials for which the
Contractor opts to apply the Steel Adjustment to. The items are identified by groups of similar
material within the three-digit core contract item (e.g., 564 Structural Steel or 603.05xxxx
Corrugated Steel Pipe). The Contractor must also identify the relationship which establishes the
invoice date for each material listed (e.g., Contractor, Subcontractor, Material Supplier, Material
Fabricator, etc.). Any items that are not included on the list will not be eligible for the price
adjustment. In addition, no adjustments will be made for items that were not identified by the
Contractor within 30 days of contract award. Site Manager does not have the capability to track
these items once the Contractor has opted in. This is done through the spreadsheet shown in the
References section below.

B. General Requirements
The Contractor must provide the EIC a detailed list of the weight of eligible material within 60 days
of installation. The list includes the contract pay item, the weight of the steel/iron, the month of
invoice, the source used to determine the weight, and, if requested by the EIC, copies of the
invoices(s). The quantity of steel/iron for adjustment for each three-digit core pay item will be
measured to nearest 0.1 Tons.

C. Adjustment Calculations
Steel adjustments are based on indexes and prices from the Producer Price Index (PPI) for
Semifinished Steel Mill Products (WPU 10172) and on the Cost Basis (CB) which are identified in
Engineering Bulletins Fuel, Asphalt, & Steel Price Adjustments. The PPIs and Cost Basis are also
posted on the following Department web site link:
https://www.dot.ny.gov/main/business-center/contractors/construction-division/fuel-asphalt-steel-
price-adjustments.

Cost Basis: The Cost Basis for original contract bid items and additional work at the original contract
bid price is the Cost Basis listed for the month of letting. The Cost Basis for additional work at

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agreed price will be the Cost Basis listed for the month when the agreed price was submitted to the
EIC.

Benchmark Steel Index: The preliminary PPI value for the month of letting that is listed for the
original contract bid items and additional work at the original contract bid price. The Benchmark
Steel Index for additional work at agreed price will be the preliminary Benchmark Steel Index listed
for the month when the agreed price was submitted to the Engineer.

Monthly Steel Index: The value of the final PPI for the month in which the steel is invoiced. If the
final PPI is not posted for a given month, the value will be the preliminary PPI for the month in which
the steel is invoiced. If a preliminary PPI is not posted for a given month, the value will be the
average of the two preceding months that are posted.

PPI Percent Changes: Adjustments are calculated when the increase or decrease percent change
difference from the Benchmark Steel Index and the Monthly Steel Index is greater than 5%. If the
percent change is between -5% and +5%, inclusive, no adjustment will be made for materials
invoiced that month.

The Excel Spreadsheet posted on the Departments website may be used to enter PPI’s, the Cost
Basis, and weights of steel. The spreadsheet will calculate adjustment values based upon PPI
percent changes and weight entries (instructions for use page is included in the spreadsheet
workbook):
https://www.dot.ny.gov/main/business-center/contractors/construction-division/fuel-asphalt-steel-
price-adjustments

D. Payments
Steel Price Adjustment payments or charges are entered on DWR’s using Item 698.06. Work
performed by the Contractor at its own expense or by Force Account are not eligible for adjustment.

The Field Change Payment (FCP) Item may be used when the pay quantities (i.e. Dollar-Cents)
exceed the current contract quantity. The Non-FCP Change Order must be used in cases here the
FCP Item is either not in the contract or the FCP quantity has been exhausted.

When the final calculated Steel adjustment value is negative, the clean-up Change Order negative
value (i.e. Dollar-Cents) for Item 698.06 will equal the contract value plus the negative adjustment
value.

If eligible items are installed after the contract completion date, when an extension of time was
approved with the assessment of engineering charges and/or liquidated damages, the monthly
average posted price or monthly steel index in effect on the last contract completion date without the
assessment of engineering charges and/or liquidated damages, or the value for the month of
installation/purchase, whichever is less, will be used to compute price adjustments.

E. References
Steel/Iron Price Adjustment Site Manager Quick Reference Guide (QRG)
https://www.dot.ny.gov/main/business-center/trns-port/repository/29A_QRG-Steel.pdf

Average posted prices for Steel and list of Eligible Items and Conversion Factors
https://www.dot.ny.gov/main/business-center/contractors/construction-division/fuel-asphalt-steel-
price-adjustments.

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