How does a floor work?
Each month the formula is worked out; if the result is below the floor, the floor is paid instead. New York's statewide recycling contract (OGS Award 22760) shows a clean version: the contractor pays the revenue-sharing percentage of either the "Recyclable Floor Price" or the actual sale price, whichever is greater. If the value of the recyclables falls below the floor, payment is based on the floor.
Why does a floor matter so much?
Because formulas with a fixed deduction reach zero quickly. Boulder County's rebate is a percentage of an index minus $43.22 per ton. Its posted OCC rebate rate for January 2026 was $0.00 per ton, rising month by month to $26.73 for October 2026. A floor is what stops that zero becoming a charge.
Is a cap ever worth accepting?
Sometimes, as the price of a floor that is high enough to matter. Compare the two: if the floor protects you from a fall you can see in the last few years of your own statements, and the cap only bites at levels you rarely reach, the trade may be fair. Run both ends in the offer comparer, which applies floors and caps in every row.
Sample wording
3.3 Floor Price. The price per net ton shall not be less than $[___] ("Floor Price"), whatever the result of section 3.1.
3.4 Cap. [The price per net ton shall not exceed $[___].] [Delete if no cap is agreed.]
What to negotiate
- Ask for a floor before discussing the spread or percentage; it changes which formula is best.
- Set the floor at or above zero, so a weak month never turns into a bill.
- If you accept a cap, set it well above the index levels you have seen on your own statements.
- Agree that the floor applies after quality deductions, or say clearly that it does not.
Red flags in a draft
A floor that applies only "if Buyer’s mill price exceeds" some other number.A cap with no floor.A floor that can be "reviewed" by the buyer at any time.
Questions
- What is a floor price in a recycling contract?
- A minimum price per ton the buyer pays even when the formula comes out lower.
- Do floors usually come with caps?
- Often. A buyer that guarantees a minimum may ask to limit the upside. Price both ends before agreeing.