HOW TO PRICE A REQUEST FOR EQUITABLE ADJUSTMENT

 

1.      DIRECT MATERIAL

2.      DIRECT LABOR

3.      INDIRECT FACTORY OR FIELD OVERHEAD EXPENSE, IF APPLICABLE

4.      SUBCONTRACTOR REA COSTS AND SUBCONTRACTOR'S PROFIT ON THOSE COSTS

5.      COSTS OF CONTRACT ADMINISTRATION IN DEALING WITH CHANGE, INCLUDING REA PREPARATION AND NEGOTIATION COSTS (BE SURE TO REMOVE FROM G & A POOL WHEN CHARGING DIRECT)

6.      DELAY AND DISRUPTION COSTS, INCLUDING LABOR INEFFICIENCY, MATERIAL AND LABOR COST/RATE INCREASES, AND UNABSORBED HOME OFFICE OVERHEAD

7.      ANY ADDITIONAL COSTS OF THE EFFECT OF THE CHANGE ON THE UNCHANGED ORIGINAL WORK, INCLUDING EFFECTS OF INFLATION, CHANGES TO MEANS AND METHODS OF PERFORMANCE, CHANGES TO DESIGN, CHANGES TO SCOPE OF WORK.

8.      GENERAL AND ADMINISTRATIVE EXPENSES ON ALL REA COSTS

9.      PROFIT ON ALL COSTS (USUALLY AT 12% FOR CHANGED WORK)