Throughout the life of your GSA Schedule contract, it’s expected that your business will experience changes, especially since you can hold your contract for up to 20 years. These factors all tie into how you provide discounts to your commercial and federal customers. As a contractor, you have the ability to make changes to your GSA Schedule through an update known as the Economic Price Adjustment (EPA) modification.
If your company has experienced completing price modifications in the past, you’ll know that the process of getting a price increase is not as simple as changing the numbers so they are higher on your pricelist. This is because GSA has restrictions on when you are allowed to raise your rates and how much of an increase you request. GSA has loosened the regulations recently due to inflation and supply chain disruptions, so let’s cover what you need to know about pricing and pricelists related to your GSA Schedule.
GSA Conditions for Increasing Schedule Prices
Before you start the process of increasing your prices, be sure to check your Final Proposal Revision (FPR) document, which lays out all the necessary terms and conditions that were awarded to your GSA Schedule contract.
If your contract was awarded under Economic Price Adjustment (EPA) clause is 552.216-70, this means that your proposed pricing is based on your company’s publicly available commercial price list. Under this clause, contractors need to wait to submit a request for price increase until they’ve had their contract for at least 12 months. After the first 12 months, contractors can submit up to three price increase requests per each 12-month period. After completing three awarded modifications, no other EPA requests will be considered.
The other EPA clause that may be awarded to your Schedule is I-FSS-969. This EPA clause has two sub-clauses: (b)(1) and (b)(2). Under I-FSS-969 (b)(1), price increases are based on a fixed escalation rate that are negotiated prior to contract award. 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.
Price increases under I-FSS-969 (b)(2) 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.
Temporary Price Flexibilities Under GSA Schedules
To combat inflation, GSA has placed a temporary moratorium on a number of EPA clause limitations. This moratorium will:
- Relax time limitations on EPA increases.
- Relax the limit on the number of EPA increases a contractor may request.
- Allow a lower level of approval, to one level above the Contracting Officer, for price increases above the EPA clause ceiling.
- Clarify that if a contractor has removed an item from their MAS contract, the Contracting Officer may add the same item back at a higher price if the higher price can be determined “fair and reasonable."
- Allows requests for EPA increases to be approved by the Contracting Officer, whether above or below the ceiling percentage established in the solicitation.
This rule will be in effect until September 30, 2023, unless otherwise stated.
Submitting an Economic Price Adjustment Modification
Now that you understand more about EPAs, you can take the next step of submitting an EPA modification. Let’s talk about important components of EPAs. Depending on the type of modifications, there are several documents involved including a Cover Letter and supporting documentation regarding the change you want to make. All of the appropriate information for each modification can be found in the MAS Modification Guidance. Of course, since GSA has a lot of restrictions on pricing, EPA modifications are more involved.
We wish we could list out a definitive number of documents you need on an EPA modification, but it depends on:
- Whether you opt into Transactional Data Reporting (TDR) or Commercial Sales Practices (CSP)
- EPA increase based on Commercial Pricelist
- EPA increase without Commercial Pricelist
- EPA increase based off Service Contract Labor Standards (SCLS)
- Wage determinations
However, there are key documents that are always needed such as the Price Proposal Template (PPT), cover letter, and pricing support.
A Key Document for Pricing Modifications: The Price Proposal Template
Price Proposal Templates are used for GSA Schedule offers and modifications. When you submit an EPA modification, you’re required to submit this excel spreadsheet that lists all of your products/services at a given price. One tab will list all of your products/services with its latest/updated pricing. The other tab will specifically list only products/services that have changes to the pricing.
Also, within the Price Proposal Template, you’ll be referencing pricing support to substantiate the prices/rates you’d like to offer. This helps the Contracting Specialist that’s reviewing the EPA mod to quickly find the support to justify as to why a price is set at that number.
It’s important to note that when GSA releases a Multiple Award Schedule (MAS) Refresh, PPT templates are often updated, so it’s important to make sure when you fill out a PPT that you are using the most recent template.
Services, Quotes, and Fixed Prices
When submitting a modification, we can’t stress enough how important it is to include pricing support to justify as to why the new prices are being offered at those new rates. To demonstrate this support, you’ll need to include information to substantiate your product/service pricing within your submission of the Price Proposal Template.
This includes information such as published and publicly available commercial catalogs/price lists, copies of invoices, contracts, or quote sheets. If this kind of information can’t be disclosed, be sure to conduct market research to compare your company’s pricing versus what your competitors are offering on GSA Advantage! (products) or GSA’s Calc Tool (services).
Basis of Award and Most Favored Customer
If your contract is under Transactional Data Reporting (TDR), feel free to disregard this part as this does not apply to you. If your company decides to opt into Commercial Sales Practices (CSP) with your GSA Schedule, you will need to make sure you are paying particular attention to the Price Reduction Clause (GSAR 552.238-81).
When you were going through the pricing section of your GSA Schedule proposal, you had to disclose information about your pricing practices including your Most Favored Customer (MFC) and your Basis of Award (BOA) customer (if different from your MFC). With these types of customers, you need to maintain the relationships between the discounts being offered. For example, if “Company XYZ” is listed as your BOA and you discount them 10% for products/services and give GSA a 15% discount, you need to make sure that you’re aware of this percentage difference if you decide to offer a greater discount to your BOA. If you lower the price for your BOA, will trigger the Price Reduction Clause.
Need Help Submitting an EPA Mod or with GSA Pricing Rules?
Throughout the life of your contract, you are allowed to make calculated pricing changes to your Schedule. Whether you decide to lower or raise your prices, make sure your contract modification actions are compliant with the corresponding clauses listed in your FPR document. Before you make the move in submitting this modification, please be sure that you’re being realistic with your prices. If you want to learn more about GSA pricing, check out the following blogs:
If you need help or assistance in getting an EPA mod submitted, or have questions about GSA Schedule pricing rules, be sure to reach out to our consultants today as we’d be happy to help!
