Federal Procurement Service expands and enhances temporary economic price adjustment powers for contractors at multiple auction schedules
Not to be outdone by the Department of Defense’s commitment to consider reducing inflation, on September 12, 2022, the Federal General Services Administration (“GSA”) Acquisition Service released a supplement to Acquisition Letter MV-22-02, extending and enhancing policies to provide inflation relief to Schedule GSA contractors. As previously explained, the original acquisition letter relaxed some limits on the ability of program contractors to obtain Economic Price Adjustments (EPAs). Specifically, it suspended limits on the frequency, size, and total number of EPAs a contractor could obtain during each contract term, while lowering the approval threshold required for the GSA to issue an EPA. The relief provided by the initial acquisition letter was scheduled to expire on September 30, 2022, but is now extended until at least March 31, 2023.
In addition, to streamline and expedite the issuance of EPAs, contracting officers will be permitted to issue EPAs directly – without the need to obtain additional approvals – as long as the Supplement remains in effect. The supplement nevertheless reminds contracting officers that EPAs must otherwise comply with the terms of the underlying contract.
As was the case in the original acquisition letter, the policies outlined in the supplement apply only to annexes administered by the GSA, and are discretionary for annexes administered by the Department of Veterans Affairs. . Contractors facing inflationary pressures should therefore review their contracts to confirm the availability of these relaxed EPA procedures.