Amid a nationwide inflation rate of more than 8 percent, the General Services Administration (GSA) has updated its guidance for Federal contracting officers, making it easier for them to adjust prices on contracting schedules.
In a Sept. 12 memo to contracting officers, GSA said Federal contractors do not need additional approvals to invoke the economic price adjustment (EPA) clause in contracts. In times of high inflation, the EPA clause is often used to further balance risk between the contract parties.
This updated guidance comes after GSA issued Acquisition Letter MV-22-02 in March, which aimed to ease the burden on contractors to raise prices through a temporary moratorium. The new guidance extends the temporary moratorium to March 31, 2023.
“For EPA increases exceeding the ceiling percentage 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,” the memo says. “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,” it continues. “Contracting officers should review all EPA requests consistently and in line with the terms of the underlying contract.”
GSA reminded contracting officers that they must still take the time to review EPA requests and ask for additional information, if needed.