ESCALATION & VARIATION tables in Rate Files
Escalation tables allow to calculate financial provisions for escalation in Firm Fixed Price contracts that are summarized on line 11 of the PSS-A2. The guideline describes how to create the tables and the rate files from the information contained into the Promulgation Letter and the escalation formula being included into the financial proposal.
CAREFUL: When the Special Conditions of Tender require to produce one PSS-A1 per year then the escalation is included in the rates and therefore the Variation tables shall be used instead of the Escalation tables. The line 11 of the PSS-A2 will in this case remain empty. DO NOT create rate values for each year in the rate file but instead use variation tables otherwise you will not be able to benefit from ECOS features that calculate for you instantly and error-free all the yearly allocation of the resources based on start, end dates and distribution profiles of each Work Packages.
Variation tables are normally used when companies are changing structures and therefore their rates varying from one year to another within the validity period of the Promulgation Letter. The guidelines describe how to create the variation tables from the information provided into the promulgation Letter.
The guideline provides some examples that demonstrate how easy it becomes to deal with escalation and variation when properly using the tables. It also shows how ECOS recalculates instantly in an error-free manner prices subject to escalation and variation when the schedule is changing.