Strategies for Proposing Price Escalation on Multi-year Contracts

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Government contractors are frequently awarded a multi-year contract that requires you to lock in the bid rates for the full duration of the contract without really knowing what the future labor market will look like. Contractors experiencing labor cost escalation on firm-fixed-price (FFP) contracts face a difficult challenge to recover those increased costs from the Government, which makes it critically important to get it right in your proposal.

What you’ll learn.

  • What is price escalation
  • The government’s view of price escalation
  • Labor rate escalation strategies