3.6.9.  Option Price Adjustments.

There are several ways to structure SABER contracts to allow for option price adjustments. One strategy is to incorporate a static UPG for the duration of the contract and allow offerors the opportunity to propose different coefficients for each of the contract periods. Another approach is to incorporate a static coefficient, or coefficients, and update the UPG each period. A third strategy, and probably the most cumbersome and least desirable, is to incorporate a static coefficient and a static UPG. This last approach requires use of an EPA clause to adjust option prices. Appendix 3-A contains a sample clause.