Reflecting the Impact of Inflation in Your Price
How do you reflect the impact of inflation in your contract price over the contract performance period? Its a true cost, and in a time of uncertainty, inflation can be difficult to determine. Let me provide some guidance for you. There are essentially two (2) ways to reflect the impact of inflation: 1. In the most widely used method, the proposed contract price includes current estimates of Wages (Direct & Indirect Labor) and Prices (All Other Direct & Indirect costs) that are expected to be experienced during the contract period of performance (POP). The Preferred Bases for current estimates are:
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