the last time i remember copper spikes like this was 2009...having the same fears as you; i decided i better include something in my bid to protect myself...conjuring up all the wisdom passed on to me from an 11th grade creative writing class, i wrote a one paragraph addendum...my prose was perfect...my content was the truth as if right from the mouth of God...all this was for naught as i was passed over for the job...later i found that my well written blurb on the unstable cooper market was interpreted by them to mean nothing more than "THIS IS NOT A FIRM BID" (which was correct)...
i brought up a potential headache before it happen
ed and thus was out of the game before it started...
If it's 40% likely that the price of copper will go up by 20% by the time they award the bid then you should increase your asking price for the copper from today's price by 0.4 x 0.2 = 0.08, 8%.
Other bidders will figure these risks differently and so may or may not win over you.
They do seem to be asking the bidder to assume the risk of changing material costs.
If the awarding entity believes they know these likelihoods better than the bidders
http://en.wikipedia.org/wiki/Asymmetric_information
then the bidder with the worst estimate will be taken advantage of.
This kind of problem is studied a lot in Game Theory. The theory recommends you make a matrix of costs/penalties depending on the outcome.
There are four cases, along with likelihoods.
You underbid and win the contract
You underbid and do not win the contract
You overbid and win the contract
You overbid and do not win the contract