August 2023 Update: GSA has extended the moratorium on EPA restrictions once again, this time through March 31, 2024. Read the notice here.
March 2023 Update: GSA has extended the moratorium on EPA restrictions through September 30, 2023. If you had an EPA modification approved for a temporary period, you can try to resubmit to make the price increase permanent. If a permanent increase is not accepted, you can resubmit to make the increase effective through the end of this fiscal year.
In March of this year, the General Services Administration (GSA) made a rare and unprecedented move, temporarily suspending restrictions on GSA Contract economic price increases. The pricing flexibilities were intended to allow contractors to better adapt to changing market conditions and to continue to support federal customer demands.
Despite the temporary moratorium on GSA Contract price increase restrictions, many contractors have continued to encounter roadblocks. Contractors faced a looming deadline, on top of challenges securing approval for price increases. Absent an extension, the suspension of price increase restrictions were set to expire at the end of this month.
Thankfully, if your company holds a GSA Multiple Award Schedule (MAS) Contract, also referred to as a GSA Schedule, you’ll be happy to hear GSA has not only extended the moratorium on price increase restrictions, they also made an additional change to help streamline and speed up the approval of increases.
We’ve put together all the information you need to know about GSA Contract price increases and the temporary changes that are in effect to help contractors respond to pricing fluctuations.
- GSA Contract Price Increases
- Standard Economic Price Adjustment (EPA) Restrictions
- Revised Moratorium on EPA Restrictions
- What Does the Revised Moratorium Mean for GSA Contractors?
- How Long are GSA EPA Changes in Effect?
- Get EPA Modification Help
GSA Contract Price Increases
In order to increase your GSA Contract pricing, you must submit an Economic Price Adjustment (EPA) modification to GSA. Under normal circumstances, GSA restricts how often and how much you can increase your GSA Contract pricing. These EPA restrictions have hindered some contractors from securing a price increase needed to keep up with inflation and pricing volatility due to current supply chain issues.
When faced with selling at a loss, contractors are forced to remove products and services from their GSA Contract. This in turn, presents the federal agencies in need of those products and services with limited availability and decreased competition.
GSA acknowledges, in the current economy, the standard restrictions on Economic Price Adjustments are hurting contractors — small businesses in particular — as well as the federal agencies these contractors serve. To combat this growing problem, GSA enacted a temporary moratorium on the enforcement of price increase restrictions.
Standard Economic Price Adjustment Restrictions
Price increase restrictions can vary slightly depending on the specific clause that applies to your GSA Contract. In general, under normal circumstances, Economic Price Adjustments:
- Are limited to three increases per line-item, per 12-month period
- Are restricted to the ceiling limitation per line-item, per 12-month period
- Cannot go into effect during the first year of your contract period, or for the first 12-months after the line-item is added to the contract
- Cannot be submitted less than 30 days since your last price increase
- Cannot be submitted within the last 60 days of your contract period
Revised Moratorium on EPA Restrictions
On March 17th, GSA issued a memorandum for the heads of GSA’s Federal Acquisition Service (FAS) Contracting Activity that places a “temporary moratorium on the enforcement of a number of limitations contained in certain GSA EPA Contract clauses”. You can read Acquisition Letter MV-22-02, Temporary Moratorium on Enforcement of Certain Limitations Contained in Certain GSA Economic Price Adjustment (EPA) Contract Clauses, in its entirety here.
On September 12, 2022, GSA released Supplement 1 to Acquisition Letter MV-22-02. The supplement extends the moratorium on the enforcement of certain restrictions on GSA Economic Price Adjustment modifications. The supplement goes even further to eliminate the need for additional approval of price increase requests over the ceiling percentage. You can read the full supplement here.
On March 6, 2023, GSA issued Supplement 2 to extend the temporary moratorium from March 31, 2023, to September 30, 2023, the end of fiscal year 2023.
What Does the Revised Moratorium Mean for GSA Contractors?
Based on the memorandum and supplement, GSA contractors can submit an EPA modification at any time, including those that exceed the ceiling amount. During the moratorium, GSA Contracting Officers are not bound by the standard price increase restrictions. However, it is important to note, EPA modification approval is still at the discretion of the Contracting Officer, who may request supportive documentation for the increase.
While the revised moratorium is in effect GSA Contracting Officers can:
- Consider an Economic Price Adjustment modification at any point during the GSA Contract term
- Consider more than three Economic Price Adjustment modifications in a contract period
- Consider Economic Price Adjustment modifications that exceed the ceiling set in the solicitation
- Approve EPA modifications that exceed the ceiling set in the solicitation without receiving additional approval. This is a new change effective September 12, 2022.
Under normal circumstances, a Contracting Officer must obtain additional approval for price increases above the ceiling. The original moratorium lowered the level of approval from the Contract Director to one level above the Contracting Officer. However, even with the reduced level of approval, contractors were told to expect a three month turnaround time for EPAs over the ceiling. In an effort to remove this administrative hurdle and reduce the processing time for EPA modifications, GSA is removing the requirement to receive additional approval for price increases from now through the March 31, 2023.
How Long are GSA’s EPA Changes in Effect?
The temporary suspension of Economic Price Adjustment restrictions originally went into effect, March 17, 2022. Effective September 12, 2022, the revised moratorium is in effect through March 31, 2023. Stay tuned, GSA may decide to once again extend the effective date beyond March 31st.
Need Help Increasing Your GSA Pricing?
If your company would like to increase your GSA Contract pricing and can provide supportive documentation for the increase, we can help. Our team here at FEDSched has the experience and the bandwidth to help prepare and negotiate your Economic Price Adjustment modification. Contact us today to save time and reduce your risk of rejection.