(3)
To this end we
As the nature of these circumstances dictates that such a price understates the eventual attractiveness of our final proposals, we intend that, while such a ceiling price should enable you to determine the acceptability of our counter-bid, our proposals
should not be judged solely on that figure. propose that, in the event of a negotiation following the selection of our Group as the Contractor, the actual contract price be that which can be more reliably calculated in a few months' time, and which we feel certain would be considerably more favourable to
In so doing the Government than any ceiling price (or prices). we have felt that the diverse and in some respects conflicting purposes of the Steering Group (economy of project realisation and assurance of ultimate price liability) may be best catered for by giving it a choice among several contractual options,
of which would be acceptable to our Group.
are accordingly set out below:-
any
These alternatives
These several alternatives, but more especially the ceiling price, have in common a method in the treatment of escalation which should
be illustrated separately.
This stems from the fact that we are
The judgement is generally
how at what appears to be the peak of a period of unprecedented
general inflation and price instability. accepted that the more extreme variations should diminish in the near term and be followed by a tendency towards stabilization.
However,
when confronted with the need to put forward a bid figure, and having no resources other than normal industrial resources, we are forced to take account of possibilities, however remote, rather than of probabilities. Thus, in order to avoid assuming a continued accretion of annual rate of increase of costs and prices at inordinately high levels (with the resulting unreasonable increase in the ceiling price) we have used
(themselves rates similar to those experienced during the last two years
much higher than anything previously experienced and which we feel cannot long continue to occur) and propose that any annual excess of the actual increa
above these levels during the period of the contract's execution be treated as an event of force majeure and its cost consequences paid outside the limitations of the ceiling, as will be the case for other
events of force majeure.
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