Get the Escalation You’re Entitled to – Latest Employment Cost Index Data Released

Wondering what percentage to use for escalation on your multi-year proposals? Or thinking about requesting an increase to your GSA Schedule labor rates? Contracting officers frequently rely on market indices, like the Employment Cost Index (ECI), when they negotiate escalation or price increases. The latest Employment Cost Index news release, issued by the U.S. Department of Labor Bureau of Labor Statistics, increased in spite of declining economic conditions. The 1-year ECI average for Management, Business, and Financial industry occupations is 3.2%, up from 3.1% last quarter and 2.9% one year ago this time (Total Compensation, Private Industry, 12-month Percent change, Table 5).

Don’t let contracting officers keep your annual escalation artificially low, use the ECI to get what you are entitled to and you could see your bottom line multiply! Still not sure? Take a look at the difference it can make! For a 5 year contract, $1M annually, see the impact to profits using a 3.2% escalation rather than a 2.4% escalation. When compounded over five years the higher escalation would result in an additional 35% profit.

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