Starting with the Disconnected Workflow version of Estimator, escalations will behave in the following ways when a negative line item is present.
Every line item positive and negative will grow by the escalated amount. This means that negative line items will grow more negative and positive cost items will grow more positive. This allows for a consistent escalation value to be set to each item and for the math to be much easier to understand since this is a single way that all line items are handled.
Here is an example:
We have a set of costs including a $50k deduction that total up to $160k
A $40k lump sum escalation is applied to the group.
This brings the total of the group of line items to $200k
Each item in the group is given the same percentage escalation (including the negative cost line items) which will provide the exact portion of the escalation based on its contribution to the total. This percentage is maintained even after you modify the quantity or the price of the item allowing you to react to changing market or project conditions.
Here you can see that the new total cost is $200k and that each item was adjusted accordingly. The deduct line item was grown in the same proportion as the cost items to maintain the ratio of cost to deducts and to allow for easier math when understanding how a line item calculates its cost.
Here is another view showing the specific escalations for the line items applied. Because the deduct line item had its cost in the "other" price category and the remaining line items had their price in the "Sub" price category the escalation was applied to the appropriate pricing.
If the line items had prices in multiple cost categories then the distribution would have been calculated such that the percent escalation would be split proportionately across all of the cost categories used.