GSA released additional guidance to address delays processing Economic Price Adjustments (EPAs) in response to inflation on September 12, 2022,
Background
On March 17, 2022, Acquisition Letter MV-22-02 was issued by GSA to provide a temporary moratorium on the enforcement of certain limitations contained in certain GSA EPA contract clauses. Various factors such as inflation, supply chain shortages, and price volatility continue to significantly impact the global economy. Therefore, there is a need to extend the temporary moratorium.
The temporary moratorium is achieving some of its key objectives, including ensuring GSA continues offering customers a full range of products, services, and solutions through the Federal Supply Schedule program and GSA Global Supply. However, this Supplement aims to further streamline the processing of EPA requests through the removal of additional administrative barriers.
For EPA increases exceeding the ceiling percentages established in the solicitation, Acquisition Letter MV-22-02 initially lowered the approval level from the contracting director to one level above the contracting officer. This Supplement, in recognition of ongoing price volatility and impacts to the global economy, removes the requirement to obtain additional approvals. This means that all requests for EPA increases can be approved by the contracting officer, whether above or below the ceiling percentage established in the solicitation. Contracting officers should review all EPA
requests consistently and in line with the terms of the underlying contract.
This Supplement also extends the temporary moratorium on enforcing the following
portions of the EPA clause (see Attachment A for details):
a. Ceiling percentages (note: additional or separate documentation beyond what is normally necessary for increases below the ceiling percentage established in the solicitation is not required for increases above ceiling);
b. Time-based limitations (e.g., number of days between requested increases); and
c. Other specific limitations (e.g., number of requests).
This temporary moratorium does not diminish a contracting officer’s responsibility for
reviewing EPA requests and asking for additional information, if applicable, within
the confines of what is normally necessary for processing EPA requests. Specifically,
EPA requests must be evaluated to ensure the request is justified.
- When the request is based on a previously agreed upon market indicator, the justification should be straightforward, as the contract price and market indicator have already been determined fair and reasonable.
- When the request is based upon a previously agreed upon catalog price, if the contractor provides the updated pricelist showing the price increase and effective date, certifies no changes to commercial sales practices and provides supporting documentation, the modification should be straightforward.