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During the last letting (April 23), IDOT utilized a steel
price index, applied to piling and structural steel only.
The index precisely adjusts the scrap price and bas price
and applies that to the difference in steel costs from
letting to delivery. However, one item of note to
contractors: if the index goes below the amount at letting,
the department could expect a credit from the contractor. A
copy of the index used for April is listed below.
Steel Price Index
Effective: April 2, 2004
Description: Adjustments will be made for
fluctuations in the cost of steel used in the manufacture of the
following items:
Metal Piling (excluding sheet piling)
Structural Steel
Documentation: Sufficient documentation shall be
furnished to the Engineer to verify the following:
a) Evidence that increased or decreased steel costs have been passed
on to the Contractor.
b) The dates and quantity of steel, in kg (lb),
shipped from the mill to the fabricator.
c) The quantity of steel, in kg (lb), incorporated into
the various items of work covered by this special provision.
The Department reserves the
right to verify submitted quantities.
Method of Adjustment: The steel cost adjustment
will be computed as follows: SCA = Q x D
Where: SCA= steel cost adjustment, in dollars
Q=
quantity of steel incorporated into the work, in kg (lb)
D=
price factor, in dollars per kg (lb)
D=CBPm - CBPL
CBPM = The average of the Consumer Buying
Price indices for Shredded Auto Scrap (Chicago) and No. 1 Heavy
Melt (Chicago) as published by the AMM for the day the steel is
shipped from the mill. The indices will be adjusted from
dollars per ton to dollars per kg (lb). CBPL=
The average of the Consumer Buying Price indices for Shredded
Auto Scrap (Chicago) and No. 1 Heavy Melt (Chicago) as published
by the American Melt Market (AMM) for the day the contract is
let. The indices will be adjusted from dollars per ton to
dollars per kg (lb).
No steel adjustments will be made for any products manufactured
from steel having a mill shipping date prior to the letting
date. Basis of Payment: Steel Cost adjustments
may be positive or negative but will only be made when there is
a difference between the CBPL and CBPM in
excess of five percent, as calculated by: Percent
Difference = {(CBPL - CBPM)
÷ CBPL}
X 100
Steel cost adjustments will be calculated by the Engineer and
will be paid or deducted when all other contract requirements
for the steel items are satisfied. Adjustments will only
be made for fluctuations in the cost of the steel as described
herein. No adjustments will be made for changes in the
cost of manufacturing, fabrication, shipping, storage, etc.
For the June Letting, IDOT may broaden the
use of the index unless the Industry indicates a desire NOT to
use it for specified products. (As an example, the
Concrete Pipe Association has requested exemption for their
products).
Please offer your
thoughts and comments to UCA so that we may respond to IDOT on
this issue.
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Steel Index 