Pricing and Annual Price Adjustment

Material costs and labor costs are subdivided in most contracts. Pricing under full maintenance contracts is normally divided into a percentage for materials and labor. Each elevator company has a different way of calculating the percentage of labor and percentage of materials. Under full maintenance agreements you can usually expect costs for labor to be around 80% and materials around 20 %.

Every elevator company also has a different procedure for annual price adjustment. Owners need to be aware that a price adjustment will occur every year. One problem with the annual price adjustment approach occurs when cumulative increases are applied over many years. This yearly price adjustment may increase the contract price to a level that exceeds the price the current contractor would charge if the maintenance contract were put out to re-bid.

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