Material Price Adjustment Clause in Procurement Law 2026

Definition: A material price adjustment clause is a contractual clause in a public contract providing for an adjustment of the agreed price if the prices of certain construction materials or commodities deviate significantly during contract performance from the prices applicable at the time of bid preparation, in order to appropriately distribute the price risk between contracting authority and contractor.

Last updated: January 2026 · Legal basis: § 9 para. 9 VOB/A, ÖNORM B 2110 Sec. 5.6, § 60 VgV, BVergG 2018

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Background and Purpose

Material price adjustment clauses gain particular importance in times of strong material price volatility: they protect contractors from unreasonable cost risks and at the same time enable long-term contracts to be awarded without prohibitively high risk surcharges. In times of stable prices, adjustment clauses are less widespread; in crisis periods with sharp price increases (e.g. steel prices after 2020/2021, energy prices in 2022), they can be existentially important for contractors and for maintaining market participation.

The basic idea is risk sharing: price risks that the contractor cannot influence (world market price fluctuations) should not be unilaterally shifted to them.

Procurement Law Admissibility

Material price adjustment clauses are generally permissible under procurement law and in certain constellations even mandatory under procurement law. According to § 9 para. 9 VOB/A, price adjustment clauses should be agreed if significant price shifts are to be expected with longer performance periods or due to the nature of the contract. In Austria, ÖNORM B 2110 permits price adjustment clauses under certain conditions.

Important: the adjustment clause must be agreed in advance in the procurement documents. Subsequent introduction of an adjustment clause as a substantial contract modification is subject to procurement obligations.

Structure of a Material Price Adjustment Clause

A legally certain material price adjustment clause contains the following core elements:

1. Reference material: clearly defined materials to which the clause refers (e.g. steel, copper, bitumen, wood, crude oil).
2. Reference index: a recognised, publicly accessible price index (e.g. Producer Price Index of the Federal Statistical Office, ÖSTAT index, London Metal Exchange LME).
3. Base value: the index level at the time of bid submission or contract conclusion.
4. Threshold: the clause only applies from a certain price fluctuation (e.g. ±5 % or ±10 % compared to the base value).
5. Adjustment formula: how exactly is the price adjusted? (E.g. proportionally to the index deviation, limited to a maximum share of the total price.)
6. Cap: maximum adjustment upwards (and possibly downwards).

Distinction from the Wage Adjustment Clause

The material price adjustment clause concerns material prices, the wage adjustment clause concerns labour cost changes. Both clause types can be combined in a contract in order to comprehensively address the overall price risk.

Related Terms

• Wage Adjustment Clause
• Lump Sum Price
• Bill of Quantities
• Procurement Law

FAQ

Must the contracting authority offer a material price adjustment clause? For long performance times and predictable price volatility, the contracting authority is required under VOB/A to consider an adjustment clause. There is no general obligation, but the absence of a clause in case of recognisable price increase risk can lead to inflated bid prices.

What happens if no adjustment clause was agreed and material prices rise sharply? Without an adjustment clause, the contractor generally bears the price risk. In extreme exceptional cases (unforeseeable, exceptional price jumps), an adjustment may be considered under the principles of frustration of contract (§ 313 BGB; § 901 ABGB) – but this is a narrow exception corridor.

Can the contractor subsequently demand a price adjustment? Only if an adjustment clause has been agreed or if the requirements of frustration of contract are met.

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Last updated: January 2026 All information is provided without guarantee. For legally binding advice, please consult a law firm specialising in procurement law.