Common use of Cost Factors Clause in Contracts

Cost Factors. The cost factors account for differences between jurisdictions in the cost of delivering legal assistance services. These factors are applied as ratios to all funding allocated by the FAMs. Four factors have been used, three of which are sourced from Commonwealth Grants Commission (CGC). 1) The CGC wage cost factor: Accounts for variation in the wages paid to otherwise comparable employees between jurisdictions due to differences in labour markets. 2) The CGC regional factor: Accounts for variation in the cost of delivering services between regions, such as higher wages needed to entice people to work in more remote locations and the higher cost of goods. 3) The CGC service delivery scale factor: Accounts for the increased cost of delivering services to small isolated communities, and differences in the number of people that reside in such communities, between jurisdictions. 4) Cross-border factor (LAC model only): Accounts for costs associated with granting legal aid to residents of other jurisdictions for Commonwealth law matters.