GSA Moratorium on Enforcement of Economic Pricing Adjustment Provisions: 3 Important Takeaways for Government Contractors | PilieroMazza SARL
In response to rising costs for government contractors amid runaway inflation, the General Services Administration (GSA) is temporarily suspending the application of numerous limitations contained in several Economic Price Adjustment (EPA) contract clauses. Below we summarize three important takeaways for federal contractors, especially small businesses and disadvantaged small businesses, to help you manage your GSA contract performance in light of rapidly changing economic circumstances.
The GSA’s March 17, 2022 acquisition letter establishing the moratorium applies to these EPA contract clauses:
- GSAR 552.216-70 Economic Price Adjustment – Federal Supply Schedule (FSS) Multiple Award Schedule Contracts (including Alternative I and Deviation II)
- I-FSS-969 Economic Price Adjustment – FSS Multiple Allocation Schedule (including Alternative II)
- GSAR 552.216-71 Economic Price Adjustment – Special Order Program Contracts (including Alternative I and Alternative II)
It is important to note that the moratorium only applies to GSA contracts. At this point, the changes announced by the GSA are discretionary rather than mandatory for Veterans Administration Federal Supply Schedule (VA FSS) contracts that include the specified clauses.
Further, the moratorium applies only to the specific text identified in Attachment A of the GSA acquisition letter. The temporary moratorium is effective immediately and will remain in effect until September 30, 2022, unless the agency extends it.
Here are the highlights of the revisions established by the moratorium:
- For GSAR 552.216-70 (SEPT 1999), the moratorium:
- Removes the limit of three price increases during a contract period;
- Removes the provision that limits price increase requests to the period from 30 days after the start of the contract period until 60 days before the end of the contract period.
- Removes the requirement that there must be at least 30 days between requested price increases; and
- Removes the requirement for a contracting officer to approve contract unit price increases of an amount other than 10%.
- For Clause I-FSS-969 (OCT 2014), the moratorium:
- Removes the requirement that price adjustments are only effective during the first 12 months of the contract term or after;
- Removes the limit of three price increases in each successive 12-month contract period;
- Removes the requirement that price increases must be requested before the last 60 days of the contract period; and
- Removes the requirement that there must be at least 30 days between requested raises.
- For clause GSAR 552.216-71 (AUG 2010), the moratorium:
- Removes the requirement that an award price can only be adjusted once in each 12 month period.
We understand that Capitol Hill is looking at ways to address inflation relief for non-GSA contractors, but that’s still early days, so stay tuned for more.