Tuesday Insight – March 22nd, 2022: To Address The Impact of Inflation, GSA Issues Acquisition Letter to Reduce Restrictions on EPA Price Increases on GSA Contracts

Mar 25, 2022

On Thursday, March 17, 2022, GSA issued an Acquisition Letter (the Letter) —effective immediately—to allow for greater flexibility to increase prices on GSA contracts that include certain Economic Price Adjustment (EPA) clauses, and to establish a temporary moratorium on a number of limitations imposed by those clauses.  The clauses at issue are: (1) GSAR 552.216,70, Economic Price Adjustment—FSS Multiple Award Schedule Contracts; Alternate I; and Deviation II; (2) I-FSS-969, Economic Price Adjustment-FSS Multiple Award Schedule; and Alternate II; and (3) GSAR 552.216-71, Economic Price Adjustment—Special Order Program Contracts; Alternate I; and Alternate II. The Letter is mandatory for GSA but discretionary for VA Federal Supply Schedule contracts.

For contracts including the covered clauses, the Letter:

  • Lowers the approval for price increases above the EPA clause ceiling in 552.216-70 (including Alternate I and Deviation II) from the contracting director to one level above the contracting officer;
  • Removes the limitation on the number of price increases allowed during the contract period;
  • Allows contractors to request increases as soon as the contract period begins, up through the end of the contract period;
  • Allows contractors to submit price increase requests without waiting 30 days from the last request;
  • Allows contractors to submit price increase requests that will be effective prior to the end of the first 12 months of the contract period;
  • Clarifies that if a contractor has removed an item from its Schedule contract, GSA will not enforce the limitation on adding the same item back at a higher price.

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