Glossary
Successor series
A successor series is the index a clause switches to when its named series is discontinued or restructured by the statistical agency. A well-drafted clause names the successor, or a method for choosing one, in advance.
Also called: index substitution, replacement index, discontinued series.
Agencies retire and merge index series regularly. If a contract's named
series stops publishing and the clause is silent, the adjustment
mechanism simply breaks and the parties are left to negotiate mid-term.
A successor clause handles this by ranking fallbacks: first the agency's
officially designated replacement, then the nearest surviving series at
the next level of aggregation, then a named alternative from another
agency, spliced at the switchover month so the ratio stays continuous.
Splicing matters. If the old series last read 188.0 and the successor
reads 262.0 for the same month, you carry forward the 188.0 base and apply
the successor's percentage changes from that point, rather than dropping a
raw 262.0 into a formula built around 188.0.
See reference period and
publication lag.
Related terms
A true-up is a later correction to a price adjustment that was calculated from a preliminary index value, once the final revised value is published. The difference is billed or credited in a subsequent invoice.
WPU and PCU are the two BLS Producer Price Index series-code families. WPU codes track a commodity by what it is; PCU codes track the output prices of an industry defined by NAICS code. Many materials appear in both, at different values.
An averaging window is the number of consecutive published index values a price escalation clause averages before using the result in its formula. A 3-month window smooths a single volatile month; a 1-month window tracks the latest value exactly.
The base period is the month whose published index value a price escalation clause treats as the starting point. Every later adjustment compares a current index value to the value from this fixed month, usually the month of contract signing or bid submission.
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