Fuel Price Indices for Contracts 1

[GeoPaveTraffic]

Has anyone ever used a fuel price index for contracts? Our thought is that since we will be putting several contracts out for bid in the next 2 to 3 months that will be constructed throughout the 2006 construction season; that we might get better pricing if we shared the risk with the contractors.

My question is "Has anyone done this with good or bad results?" and "Does anyone have sample contract language that was used and that they would be willing to share?"

Thanks.

 

[LCruiser]

I forgot to ask...

Comments?

 

[darth051]

The Ontario Ministry of Transportation established a system that on first glance seems to be what you are looking for.

Their system is based on some calculated/assumed values for how much fuel is used for various contract activities and a fuel price index based on the average daily cost of fuel for a month. For example, they determined that (on their jobs) 17% of trucking costs are fuel costs. They also determined that clearing operations use 237 litres of fuel per hectare.

As I recall, Contractor's were given the option of whether to use the system or not at the time of Contract signing.

The web address for the system is

https://www.raqsa.mto.gov.on.ca/login/raqs.nsf/English/Graphic/viewContractBulletin?OpenForm

Look under "MTO Info" for "Diesel Fuel Cost".

David Dietrich
KMK Consultants Ltd
Windsor, Ontario, Canada