Common use of Escalation Clause Clause in Contracts

Escalation Clause. In the event of a product cost increase an escalation request will be reviewed by the State Purchasing Division on an individual basis. Please be aware this measure is not intended to allow any increase in profit margin, only to compensate for an actual cost increase. Price increases will only be considered concurrently with the Annual Extension of the Price Agreement and when the contractor provides proof from the manufacturer of the increase. Vendor must supply documentation from the Manufacture addressed to the vendor. The documentation must state that they are increasing the price from the factory to the vendor, as well as the reason for the increase. Price decreases as well shall apply. If the vendor’s prices are reduced for any reason, users shall receive the benefit of such reductions. Price increases and/or decreases will not be retroactive to orders already in-house or back-ordered. Orders will be filled at the price in effect of the date of the receipt of the order by the vendor. Increases due to bidding errors will be considered on a case-by-case basis.