What is a price review clause?

Look, the famous price review clause, that AS under the sleeve in long public contracts. Basically, it is that magical parrophy that lets you adjust the agreed price if the market gets crazy, inflation shoots, or anything rare happens in the economy. It is not just for one of the two - the company or the public administration - not ending up crying in the corner when the numbers stop quading. It serves just for that: keep the contract afloat and that nobody loses, nor the one who pays or the one who charges.

And be careful, this is not a modern invention or something that looks the same everywhere. In Spain, for example, the matter is well tied in the Royal Legislative Decree 3/2011 and it cannot be applied so because. There are rules, there are limits and, of course, a lot of small print. Nor do you think all contracts carry this clause. Normally they reserve it for long contracts or for projects that, by their roll, may suffer sudden changes in costs. If it does not make it clear on the specifications and is not the well explained review formula, forget.

Companies that want to get into these public tenders schedules should know by heart how this issue works. It is not a matter of throwing himself blind; If you don't understand it well, you just end up working for love of art. My advice: talk to someone who knows, a lawyer or an expert in public contracts, because there is no room for silly mistakes.

In summary, the price review clause is that security network that can save the skin in a public contract. Used well, keep you afloat; Ignore it, well, you can end up counting coins to reach the end of the month.