What is an Economic Price Adjustment (EPA) clause in U.S. construction?

Under FAR 16.203 and state DOT standards, an EPA clause allows contract price adjustments based on published cost indexes (BLS PPI, fuel, asphalt, steel) to manage market volatility.

Federal & State Procurement · USA

Automate Price Adjustment Calculations for U.S. Contracts

January 15, 2024•8 min read

Eliminate manual spreadsheet errors and automate Economic Price Adjustment (EPA) calculations for federal (FAR), state DOT, and commercial construction projects.

Key Advantages

FAR 16.203 & State DOT (Caltrans, TxDOT, FDOT, NYSDOT) compliant escalation models
Automated index tracking: BLS Producer Price Index (PPI), Consumer Price Index (CPI), ENR & RSMeans
One-click audit-ready Excel documentation for prompt invoice approvals

1. What Is an Economic Price Adjustment (EPA) Clause?

Under FAR 16.203 and state DOT standards, an EPA clause allows contract amounts to adjust based on cost indexes (materials, asphalt, fuel, labor wages) during long performance periods.

Standard Escalation Formula:

P = P₀ × [a + b(I / I₀)]

• P₀ = Base contract price

• a = Fixed non-adjustable share

• b = Adjustable material/labor share

• I₀ = Base index, I = Current execution index

2. Supported Index Sources

Federal (BLS)

Producer Price Indexes (PPI) for steel, asphalt, fuel, and lumber.

State DOTs

Caltrans, TxDOT, FDOT, and NYSDOT monthly price index benchmarks.

Commercial (ENR)

Engineering News-Record (ENR) Construction Cost Index (CCI).

Automate U.S. Contract Price Adjustments

Fast, transparent, and audit-ready price adjustment calculations.

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