The General Services Administration (GSA) has recently revised its policies regarding the Economic Price Adjustment (EPA) clause for Multiple Award Schedule (MAS) holders.  These updates became final on August 5, 2024, and will be rolled out in the next GSA MAS refresh.  The stated goal of these changes is to streamline the EPA process through simplified procedures, increased transparency, and broadening the criteria to request an adjustment.

Pricing is a major factor in the success of a MAS contractor, and GSA implements policies in the hope ensuring there is fairness and transparency during the procurement process. EPA intends to allow contractors to make changes to their prices based on fluctuations in the economy while ensuring fair and reasonable pricing for government buyers.

Current EPA options include percentage caps and the number of increases permitted annually. This has been a chronic thorn for many vendors as the caps appear arbitrary and they do not reflect inflationary pressures or increases in material costs – Contracting Officers do have the discretion to review and accept departures from these restrictions, but it is not standard practice.

Current Clauses that Regulate the Dos and Don’ts of an EPA:.

1. EPA Clause 552-216-70: Refers mainly to contracts with products and allows price modifications to be requested based on changes in commercial prices.
2. EPA Clause I-FSS-969(b)(1): For contracts with services, this clause allows for fixed escalations which are built into the contract and occur automatically on the contract’s anniversary.
3. EPA Clause I-FSS-969(b)(2): For contracts with services, based on market indicators such as Bureau of Labor Statistics Employment Cost Index
4. Acquisition Letter MV-22-02-Temporary Moratorium on Limitations in EPA Clauses: In effect until December 31, 2024 in order to address current inflation. It eases the stipulations and requirements for the above-mentioned clauses.

For these clauses, there are time-related conditions and allowable caps that must be adhered to for the EPA Modification to be approved.

The new clause consolidates these clauses into one single standardized clause 552.238-120, Economic Price Adjustment—Federal Supply Schedule Contracts. Additionally, it will take into consideration Acquisition letter MV-22-02 and will remove those procedural limitations in the older clauses to better align with commercial standards and practices. The latest clause should allow vendors more flexibility in responding to market pressures and changes.

Coley GCS has 24 years’ experience helping thousands of companies obtain and manage their GSA Schedule. Our team of advisors can help you choose which EPA provision is right for you and ensure your contract pricing is up to date. Contact us today at hello@coleygsa.com, by phone 210-402-6766 or schedule a call to get started on obtaining your GSA Schedule—a critical step on your road to success in the government market.

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