Rule2024-16980
General Services Administration Acquisition Regulation; Federal Supply Schedule Economic Price Adjustment
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 5, 2024
Effective
September 4, 2024
Issuing agencies
General Services Administration
Abstract
The General Services Administration is amending the General Services Administration Acquisition Regulations (GSAR) to standardize and simplify the Multiple Award Schedule clauses for economic price adjustments. This rule removes certain economic price adjustment requirements within these clauses to better align with commercial standards and practices.
Full Text
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<title>Federal Register, Volume 89 Issue 150 (Monday, August 5, 2024)</title>
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[Federal Register Volume 89, Number 150 (Monday, August 5, 2024)]
[Rules and Regulations]
[Pages 63325-63328]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-16980]
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GENERAL SERVICES ADMINISTRATION
48 CFR Parts 501, 502, 538, and 552
[GSAR Case 2020-G510; Docket No. 2023-0025; Sequence No. 1]
RIN 3090-AK20
General Services Administration Acquisition Regulation; Federal
Supply Schedule Economic Price Adjustment
AGENCY: Office of Acquisition Policy, General Services Administration
(GSA).
ACTION: Final rule.
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SUMMARY: The General Services Administration is amending the General
Services Administration Acquisition Regulations (GSAR) to standardize
and simplify the Multiple Award Schedule clauses for economic price
adjustments. This rule removes certain economic price adjustment
requirements within these clauses to better align with commercial
standards and practices.
DATES: This rule is effective on September 4, 2024.
FOR FURTHER INFORMATION CONTACT: For clarification of content, contact
Mr. Thomas O'Linn, Procurement Analyst, at <a href="/cdn-cgi/l/email-protection#c9aebaa8bbb9a6a5a0aab089aebaa8e7aea6bf"><span class="__cf_email__" data-cfemail="3d5a4e5c4f4d5251545e447d5a4e5c135a524b">[email protected]</span></a> or 202-
445-0390. For information pertaining to status or publication
schedules, contact the Regulatory Secretariat at <a href="/cdn-cgi/l/email-protection#75322634271012261016351206145b121a03"><span class="__cf_email__" data-cfemail="54130715063133073137143327357a333b22">[email protected]</span></a> or
202-501-4755. Please cite GSAR Case 2020-G510.
SUPPLEMENTARY INFORMATION:
I. Background
This final rule amends the (GSAR) to standardize and simplify the
Multiple Award Schedule (Schedule) clauses for economic price
adjustments.
GSA published a proposed rule in the Federal Register at 88 FR
78710 on November 16, 2023. One respondent submitted comments in
response to the proposed rule.
II. Discussion and Analysis
GSA reviewed the public comments in the development of the final
rule; however, no changes were made as a result of the public comments
received. A discussion of the public comments received is provided as
follows:
A. Summary of Significant Changes
There are no significant changes from the proposed rule.
[[Page 63326]]
B. Analysis of Public Comments
1. Support for the Rule
Comment: The respondent expressed support for the rule.
Response: GSA acknowledges the respondent's support for the rule.
2. Training
Comment: The respondent recommended contracting officers receive
training on processing Schedule economic price adjustment (EPA)
requests.
Response: GSA acknowledges the respondent's recommendation and will
consider their recommendations as part of the training plan for this
rule. GSA plans on reviewing and updating existing Schedule EPA
training resources. GSA also intends to provide training to the
acquisition workforce, including contracting officers.
3. Guidance
Comment: The respondent recommended guidance be revised and, if
applicable, developed to support the processing of Schedule EPA
requests.
Response: GSA acknowledges the respondent's recommendation and will
consider their recommendations within the update of Schedule EPA
guidance. GSA plans on updating existing Schedule EPA guidance to
support the implementation of this rule. Guidance will include
direction to contracting officers on how to properly process EPA
requests based on the type of EPA mechanism (e.g., a fixed escalation
rate and market indicator) identified in the contractor's Schedule
contract.
C. Summary of Minor Changes
1. General. The final rule renumbers the clause 552.238-118,
Economic Price Adjustment--Federal Supply Schedule Contracts, to
552.238-120, Economic Price Adjustment--Federal Supply Schedule
Contracts. The renumbering of this clause ensures consistency with the
changes made to the GSAR that went into effect July 8, 2024 (see 89 FR
48330, June 6, 2024).
2. Section 501.106, OMB Approval under the Paperwork Reduction Act.
The final rule revises the entry for 552.238-120 to include Office of
Management and Budget (OMB) Control No. 3090-0306. The revision is
necessary to add all of the OMB information collections tied to this
clause.
3. Section 502.101, Definitions. The final rule revises the text
for the definition of ``Economic price adjustment (EPA) method'' in
order to add a parenthesis in front of the period.
4. Section 538.273, FSS solicitation provisions and contract
clauses. The final rule includes the redesignation of the clause
552.238-120, Economic Price Adjustment--Federal Supply Schedule
Contracts, from paragraph (d)(38) to paragraph (d)(41). This change
ensures the clauses listed in paragraph (d) of GSAR 538.273 remain in
numerical order.
5. Section 538.273, FSS solicitation provisions and contract
clauses. The final rule includes the removal of the following ``Use in
Federal Supply Schedule solicitations and contracts.'' The removal of
this text ensures consistency with the changes made to this section,
which went into effect February 12, 2024 (see 89 FR 2172, January 12,
2024).
III. Expected Impact of the Rule
This rule will benefit the Schedule program as a whole. For
example, GSA anticipates that these changes will increase the number
and extent of offerings available through the Schedule program, improve
customer satisfaction/reduce customer cost by ensuring needed products,
services, and solutions are not removed from the Schedule program due
to market volatility, and reduce administrative costs on Schedule
contractors, particularly small businesses and new entrants.
GSA receives hundreds of modification requests each month from
contractors to remove items from their Schedule contracts or declined
orders due to price variability in the commercial market. By statute,
the procedures for the Schedule program are competitive so long as they
are open to all and contracts and orders result in the lowest overall
cost alternative. GSA anticipates this rule will help it ensure
customers experience the lowest overall cost alternative on their
orders by maximizing the chance that full solutions are available on
the Schedule contract, thus minimizing the need to conduct multiple
separate acquisitions to fulfill a requirement.
Currently, Schedule contracts included at least one of the
following four clauses related to the submission and processing of EPA
requests during contract performance: (1) an authorized deviation to
GSAR clause 552.216-70; (2) Alternate I of GSAR clause 552.216-70; (3)
clause I-FSS-969; or (4) an Alternate of clause I-FSS-969. This rule
standardizes and simplifies the EPA requirements contained in these
four clauses. This rule consolidates these four clauses into a single
Schedule EPA clause. These changes do not alter the way Schedule
contractors conduct business, or their ability to submit an EPA
request.
The qualitative anticipated benefits include, but are not limited
to, the creation of a single standardized Schedule EPA clause; greater
flexibility around EPA requests; providing clarity around EPA within
the Schedule program; providing a connection between the Schedule
solicitation and resultant contracts; and greater flexibility and
agility for purposes of responding to changing conditions.
GSA anticipates the quantitative benefits to be related to improved
regulatory familiarization. GSA calculates the estimated total cost for
Schedule contractors to familiarize themselves with existing EPA
requirements as $3,251,640 (i.e., 3 hours \* \ $77.42 \1\ (GS-12 Step 5
base pay plus ``Rest of US Locality Pay'' plus ``Fringe'') \*\ 14,000
approximate number of current Schedule contractors)). After these
revisions: GSA estimates the total cost as $2,709,700 (i.e., 2.5 hours
\*\ $77.42 (GS-12 Step 5 base pay plus ``Rest of US Locality Pay'' plus
``Fringe'') \*\ 14,000 approximate number of current Schedule
contractors)). Resulting in a reduction in estimated total cost of
$541,940.
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\1\ 2023 Rest of US, 12 Step 5 x 2.0 fringe = $77.42; the rate
is adjusted upward by 100% to adjust for overhead and benefits.
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IV. Executive Orders 12866, 13563, and 14094
Executive Order (E.O.) 12866 (Regulatory Planning and Review)
directs agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). E.O. 13563 (Improving Regulation and Regulatory
Review) emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. E.O. 14094 (Modernizing Regulatory Review) supplements and
reaffirms the principles, structures, and definitions governing
contemporary regulatory review established in E.O. 12866 and E.O.
13563. The Office of Information and Regulatory Affairs (OIRA) has
determined that this rule is not a significant regulatory action, and,
therefore, is not subject to review under section 6(b) of E.O. 12866,
Regulatory Planning and Review, dated September 30, 1993.
[[Page 63327]]
V. Congressional Review Act
OIRA has determined that this rule is not a major rule under 5
U.S.C. 804(2). Subtitle E of the Small Business Regulatory Enforcement
Fairness Act of 1996 (codified at 5 U.S.C. 801-808), also known as the
Congressional Review Act or CRA, generally provides that before a
``major rule'' may take effect, the agency promulgating the rule must
submit a rule report, which includes a copy of the rule, to each House
of the Congress and to the Comptroller General of the United States.
The General Services Administration will submit a report containing
this rule and other required information to the U.S. Senate, the U.S.
House of Representatives, and the Comptroller General of the United
States. A major rule under the CRA cannot take effect until 60 days
after it is published in the Federal Register.
VI. Regulatory Flexibility Act
GSA does not expect this final rule to have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because this
rule is to standardize and simplify existing EPA requirements related
to Schedule (e.g., revise GSAR clause 552.216-70, Economic Price
Adjustment-FSS Multiple Award Schedule Contracts).
The underlying purpose of the changed text remains the same (i.e.,
supporting the submission and processing of EPA requests), and
therefore any burden would have been identified previously.
There were no significant issues raised by the public comments in
response to the initial regulatory flexibility analysis. A Final
Regulatory Flexibility Analysis (FRFA) has been prepared consistent
with 5 U.S.C. 603 et seq. The FRFA is summarized as follows:
The objective of the rule is to standardize and simplify the
clauses for Schedules related to EPA. These revisions consolidate
the four existing Schedule clauses into a single Schedule EPA
clause. These revisions also remove certain procedural limits
contained in these clauses to better align with commercial standards
and practices. GSA anticipates that these changes will increase the
number and extent of offerings available through the Schedule
program, improve customer satisfaction/reduce customer costs by
ensuring needed products, services, and solutions are not removed
from the Schedule program, and reduce administrative costs on
Schedule contractors, particularly small businesses and new
entrants.
Title 40 of the United States Code (U.S.C.) section 121
authorizes GSA to issue regulations, including the GSAR, to control
the relationship between GSA and contractors. In addition, 41 U.S.C.
152 provides GSA authority over the Schedule program.
The rule applies to both large and small businesses, which are
awarded Schedule contracts. Information obtained from FAS as well as
the recent renewal of Information Collections 3090-0235 and 3090-
0306 were used as the basis for estimating the number of Schedule
contractors that this rule may impact. For Fiscal Year 2023 there
were approximately 14,000 Schedule contractors, of which over 12,000
(85 percent) were small business entities. In addition, according to
the recent renewal of Information Collections 3090-0235 and 3090-
0306, GSA processes approximately 2,561 EPA requests annually. GSA
anticipates this rule will not significantly impact this number.
The rule does not implement new or changed reporting,
recordkeeping, or other compliance requirements for Schedule
contracts. The rule merely updates and clarifies existing EPA
requirements currently used in Schedule contracts.
The rule does not duplicate, overlap, or conflict with any other
Federal rules.
There are no known alternatives to this rule which would
accomplish the stated objectives. This rule does not initiate or
impose any new administrative or performance requirements on small
business contractors because the requirements prescribed in existing
Schedule EPA clauses are already being followed. The rule merely
updates and clarifies these existing requirements so as to reduce
burden for both the government and contractors as it relates to EPA
within Schedule contracts.
Interested parties may obtain a copy of the FRFA from the
Regulatory Secretariat Division. The Regulatory Secretariat Division
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of
the Small Business Administration.
VII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 3501) does apply;
however, these changes do not impose additional information collection
requirements to the burden previously approved under OMB Control Number
3090-0235, titled: Federal Supply Schedule Pricing Disclosures and
Sales Reporting and OMB Control Number 3090-0306, titled: Transactional
Data Reporting. Both OMB information collections, however, will be
updated to reflect the change in the clause title and number from
552.216-70, Economic Price Adjustment--FSS Multiple Award Schedule
Contracts, to 552.238-120, Economic Price Adjustment--Federal Supply
Schedule Contracts.
List of Subjects in 48 CFR Parts 501, 502, 538, and 552
Government procurement.
Jeffrey A. Koses,
Senior Procurement Executive, Office of Acquisition Policy, Office of
Government-Wide Policy, General Services Administration.
Therefore, GSA amends 48 CFR parts 501, 502, 538, and 552 as set
forth below:
0
1. The authority citation for 48 CFR parts 501, 502, 538, and 552
continues to read as follows:
Authority: 40 U.S.C. 121(c).
PART 501--GENERAL SERVICES ADMINISTRATION ACQUISITION REGULATION
SYSTEM
0
2. In section 501.106, amend table 1 by--
0
a. Revising the entry for ``516.506'';
0
b. Removing the entry for ``552.216-70''; and
0
c. Adding, in numerical order, entries for ``552.238-83'' and
``552.238-120''.
The revision and additions read as follows:
501.106 OMB approval under the Paperwork Reduction Act.
* * * * *
Table 1 to 501.106
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GSAR reference OMB control No.
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* * * * *
516.506................................... 3090-0248, 3090-0306
* * * * *
552.238-83................................ 3090-0235, 3090-0306
* * * * *
552.238-120............................... 3090-0235, 3090-0306
* * * * *
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PART 502--DEFINITIONS OF WORDS AND TERMS
0
3. Amend section 502.101 by adding, in alphabetical order, the
definition of ``Economic price adjustment (EPA) method'' to read as
follows:
502.101 Definitions.
* * * * *
Economic price adjustment (EPA) method means the agreed upon
procedure by which pricing may be adjusted throughout the contract
period to include, but not limited to, the mechanism(s) to be used to
adjust pricing (e.g., adjustments based on established pricing), the
pricing subject to adjustment, and any other
[[Page 63328]]
requirements (e.g., timing, frequency, limits on increases).
* * * * *
PART 538--FEDERAL SUPPLY SCHEDULE CONTRACTING
0
4. Amend section 538.273 by adding paragraph (d)(41) to read as
follows:
538.273 FSS solicitation provisions and contract clauses.
* * * * *
(d) * * *
(41) 552.238-120, Economic Price Adjustment--Federal Supply
Schedule Contracts.
* * * * *
PART 552--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
552.216-70 [Removed]
0
5. Remove section 552.216-70.
0
6. Amend section 552.238-115 by:
0
a. Revising the date of the clause;
0
b. Removing paragraph (d)(10)(i);
0
c. Redesignating paragraphs (d)(10)(ii) and (iii) as paragraphs
(d)(10)(i) and (ii); and
0
d. Adding new paragraph (d)(10)(iii).
The revision and addition read as follows:
552.238-115 Special Ordering Procedures for the Acquisition of Order-
Level Materials.
* * * * *
Special Ordering Procedures for the Acquisition of Order-Level
Materials (DATE)
* * * * *
(d) * * *
(10) * * *
(iii) 552.238-120, Economic Price Adjustment--Federal Supply
Schedule Contracts.
* * * * *
0
7. Add section 552.238-120 to read as follows:
552.238-120 Economic Price Adjustment--Federal Supply Schedule
Contracts.
As prescribed in 538.273(d), insert the following clause:
552.238-120 Economic Price Adjustment--Federal Supply Schedule
Contracts (DATE)
(a) Definition.
Economic price adjustment method, as used in this clause, means the
agreed upon procedures by which pricing may be adjusted throughout the
contract period to include, but not limited to, the mechanism(s) to be
used to adjust pricing (e.g., adjustments based on established
pricing), the pricing subject to adjustment, and any other requirements
(e.g., timing, frequency, limits on increases).
(b) General. This contract provides for economic price adjustment
(EPA) to contract pricing based on the established EPA method. EPA
provides for the increase and decrease to stated contract pricing upon
the occurrence of specified conditions described in the EPA method,
such as market index changes or unforeseeable significant changes in
market conditions.
(c) Exceptions. This clause does not cover--
(1) Adjustments based on statute, Executive Order, or regulation
(e.g., Service Contract Labor Standards (41 U.S.C. chapter 67) and
AbilityOne procurements (FAR subpart 8.7));
(2) Adjustments based on a change clause (e.g., paragraph (c) of
GSAR clause 552.212-4, Contract Terms and Conditions--Commercial
Products and Commercial Services (FAR DEVIATION 52.212-4));
(3) Price reductions made under GSAR clause 552.238-81, Price
Reductions;
(4) Adjustments based on GSAR clause 552.238-117, Price Adjustment-
Failure to Provide Accurate Information; and
(5) Adjustments based on a contract clause that authorizes an
adjustment based on specified actions or conditions.
(d) Economic price adjustment method. The EPA method may be revised
through mutual agreement of the parties. In the event of a conflict
between the EPA method and this contract, the contract shall control.
(e) Submission requirements. The Contractor shall submit EPA
requests to the Federal Supply Schedule (FSS) Contracting Officer
pursuant to the EPA method. EPA requests shall fully conform to the
requirements of the EPA method and include sufficient information to
support the request. The FSS Contracting Officer may request additional
information from the Contractor.
(f) Contracting Officer responsibilities. The FSS Contracting
Officer will--
(1) Review the EPA request to ensure conformance with the EPA
method,
(2) Make a determination. The FSS Contracting Officer may use any
information (e.g., market research) deemed necessary to support their
determination. The FSS Contracting Officer may determine to--
(i) Accept the EPA request either in whole or in part,
(ii) Reject the EPA request either in whole or in part, or
(iii) Take any other action deemed to be in the best interest of
the Government (e.g., negotiate a more favorable EPA).
(3) Notify the Contractor of their determination, and
(4) Modify the contract, as applicable, to reflect the
determination. Contract items that need to be removed from the contract
as a result of rejection or an inability to reach agreement are to be
removed in accordance with 552.238-79, Cancellation.
(g) Effective date. EPA requests approved by the FSS Contracting
Officer under this clause shall apply to orders issued on or after the
effective date of the contract modification. Blanket Purchase
Agreements (BPAs) may be modified by the ordering agency in accordance
with the terms and conditions of the BPA.
(h) Update of contract pricing and catalog data. The Contractor
shall update its FSS pricing and any other FSS catalog data in
accordance with the terms and conditions of this contract.
(End of clause)
[FR Doc. 2024-16980 Filed 8-2-24; 8:45 am]
BILLING CODE 6820-61-P
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