In response to rising costs for government contractors amid skyrocketing inflation, the General Services Administration (GSA) is temporarily suspending the enforcement of many limitations contained in several Economic Price Adjustment (EPA) contract clauses. Below we summarize three important takeaways for federal contractors—especially small businesses and small-disadvantaged 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 Alternate I and Deviation II)
- I-FSS-969 Economic Price Adjustment – FSS Multiple Award Schedule (including Alternate II)
- GSAR 552.216-71 Economic Price Adjustment – Special Order Program Contracts (including Alternate I and Alternate II)
Importantly, the moratorium applies only to GSA contracts. At this point, the changes announced by GSA are discretionary rather than mandatory for Veterans Administration Federal Supply Schedule (VA FSS) contracts that include the specified clauses.
Furthermore, the moratorium applies only to the specific text identified in Attachment A of GSA’s acquisitions 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 Clause GSAR 552.216-70 (SEPT 1999), the moratorium:
- Removes the limit of three price increases during a contract period;
- Removes the provision that limits requests for price increases to the time period from 30 days after the contract period begins until 60 days before the contract period ends.
- 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 in amounts other than 10 percent.
- For Clause I-FSS-969 (OCT 2014), the moratorium:
- Removes the requirement that price adjustments are effective only on or after the first 12 months of the contract period;
- Removes the limit of three price increases during each succeeding 12-month period of the contract;
- 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 increases.
- For Clause GSAR 552.216-71 (AUG 2010), the moratorium:
- Removes the requirement that an award price may be adjusted only once during each 12-month period.
We understand that Capitol Hill is looking into ways to address inflation relief for non-GSA contractors, but that’s still in the early stages, so stay tuned for more.
If you would like to seek a contract modification or discuss how this moratorium could affect your business, please contact Jon Williams or Katie Burrows, the authors of this blog, or another member of PilieroMazza’s Government Contractors Group.