Price Escalation & De-Escalation

Vendor Information

Price Increases

HOW DO I REQUEST PRICE INCREASE:

All price increases must be made in writing to:

City of Milwaukee

Procurement Services Section

200 E. Wells Street – Room 601

Milwaukee, WI  53202

ATTN: Purchasing Agent named on the contract. 

WHAT NEEDS TO BE INCLUDED WITH THIS REQUEST:

Documentation from the manufacturer and/or published price sheets is required to support your request.

The contract number should also be referenced in this letter.  Without this information, your price increase request cannot be considered.

WHEN CAN I REQUEST A PRICE INCREASE:

All price increases must be based upon product cost ONLY and documentation of the price increase is required.  The City of Milwaukee's standard escalator clause reads that bid prices must be held firm for one-year after which an escalator can be invoked.  Prices can only escalate 10% over the firm bid price over the life of the contract. There are exceptions only when market conditions dictate a revised escalator for a particular commodity.

HOW FAR IN ADVANCE MUST PRICE INCREASES BE MADE:

60 days in advance of the effective date of the increase is the standard for most contracts.  There are a few exceptions when market conditions dictate.

WHAT ABOUT A PRICE DECREASE:

Likewise, any de-escalation in price shall be passed on the City and vendors are obligated to treat price decreases as equally as price increases during the tenure of the contract. This escalator clause applies to most commodity vendor contracts.

WHAT ABOUT DISCOUNT FROM LIST PRICING:

Price Escalation clauses are not applicable for "discount from list" contracts as the vendor's current list will already reflect market changes.  Therefore, while the percent of discount offered by the vendor must remain firm for the term of the contract, the vendor must provide updated price lists to the City user department(s) when updated.