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Escalation
General
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Escalation is typically used to forecast what costs or prices will be in the future and/or to bring past costs or prices to a current basis (uplifting or rebasing).
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Utilizing unrealistically high escalation rates can result in more funding being allocated to a project
Escalation Allowance
An escalation allowance is a provision in costs or prices for changes in technical, economic and market conditions over time :question:
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In volatile economic conditions, it may form a large component of a cost estimate and can have a large impact on the bids and profitability of contractors if allowances are not made for it.
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