One of the most essential parts of maintaining your GSA Multiple Award Schedule (MAS) contract is ensuring your pricing is up to date. GSA contracts can last for up to 20 years, so it’s likely that your commercial rates will increase during the life of your contract.
As a GSA contractor, you have the ability and the right to increase your GSA rates alongside your commercial rates. However, the process of requesting a price increase can be complicated, as GSA has restrictions on when you can raise your rates and how much of an increase you can request. In this blog, we’ll cover what price increases look like with a GSA Schedule and how recent regulations have been updated.
Using Economic Price Adjustments (EPAs) to Increase Your GSA Schedule Prices
If GSA contractors want to increase the price of a product or service on their GSA Schedule, they can submit an Economic Price Adjustment (EPA) modification. Contractors can submit modifications to change a number of things on their contracts including, but not limited to, price increase or price reduction, administration changes, novation and change of name, and adding or deleting products.
Before you increase your prices, you’ll want to make sure you identify which clause specifically applies to you and submit it properly, so your modification doesn’t get rejected. In some cases, you may not need to submit a mod, so it's important you understand the regulations behind each clause.
Originally, GSA allowed contractors to select from two different EPA clause types: EPA clauses 552.216-70 and I-FSS-969 b(1) and b(2). However, Under Multiple Award Solicitation Refresh #29, GSA introduced a new consolidated Economic Price Adjustment (EPA) clause that replaced and eliminated the legacy EPA clauses 552.216-70 and I-FSS-969. GSAR 552.238-210, Economic Price Adjustment Federal Supply Schedule (FSS) Contracts, is now the main EPA clause that applies to GSA contractors.
If you have not yet incorporated this clause into your contract through a Terms and Conditions modification, you will be required to do so before you can move forward with any other contract modifications. The purpose of implementing this clause was to make price adjustments more standardized across all FSS contracts.
A Breakdown of the New EPA Clause 552.238-120
The new EPA clause was created to standardize price changes across all Federal Supply Schedule (FSS) contracts, including GSA Schedules and VA contracts. Unlike the previous clauses, they do not include specific time-based limitations or ceiling percentage limits.
The mechanisms in EPA clause 552.238-120 include:
- Adjustments based on fixed escalation rates
- Adjustments based on a market index or other basis
- Adjustment based on established pricing
- Adjustments based on unforeseeable significant changes in market conditions
Similar to the previous Economic Price Adjustments methods, EPA clause 552.238-120 offers contractors multiple option types for implementing the clause into their contract. This includes:
- GSAM 538.270-4(a)(1) - Adjustments based on fixed escalation rates. With this EPA method, price increases are awarded on the 12-month anniversary of the GSA Schedule contract effective date. Contractors are not required to submit modifications under this EPA clause, as they occur automatically.
- GSAM 538.270-4(a)(2) - Adjustments based on a market index or other basis. Price increases under this method are based on an agreed-upon market indicator. This market indicator could be a public index, public survey, or another public based indicator, but it is typically connected to the Bureau of Labor Statistics Employment Cost Index.
- GSAM 538.270-4(a)(3) - Adjustments based on established pricing. Under the EPA type, contractors will increase their GSA prices when their commercial prices increase. This clause will typically apply to vendors who offer products as opposed to services.
So, How Do You Increase Your GSA Prices?
After you’ve identified which EPA mechanism applies to your contract and how much you need to increase your GSA prices, you’ll need to start preparing the necessary documents so you can submit an EPA modification in the eMod system. Some of the required documents include:
- A copy of the commercial catalog/price list that shows the price increases and the effective date for commercial customers if GSAM 538.270-4(a)(3).
- A copy of the agreed upon market indicator if GSAM 538.270-4(a)(2).
- Pricing support, such as contracts or invoices that are requested by the Contracting Officer to show the reasoning behind the requested price increase.
The specifics for each EPA clause can vary, so it’s important that you reference the MAS Modification guide to fully understand the modification requirements under each EPA clause. Failure to meet the modification requirements could lead to your pricing modification getting rejected.
Are you Ready to Submit an EPA Modification?
Neglecting to keep your GSA prices current and accurate can hurt your business and could result in the loss of an opportunity, which is critical during federal government Q4. While the EPA modification process can be difficult and confusing, one of our consultants would be happy to help you.
If you want to learn about other types of modifications and the modification process, check out our blog “What Are the Types of GSA Schedule Contract Modifications”. If you have any other questions about managing your GSA Schedule contract, or you are interesting in acquiring a contract, Winvale is here to help.
