Which EPA Mechanism should you use?

If your company utilizes a publicly available, dated Commercial Pricelist then you likely sell products on your GSA schedule. This simply means that in the future, when increasing your pricing to GSA for these products, you will need to provide invoices as evidence of your rates increasing to your commercial customers. (Don’t forget- GSA expects to be receiving the lowest prices possible- if you are increasing your pricing to GSA, they are going to want to see that across the board!) In your GSA Proposal you will need to state that your contract is subject to Clause 552.216-70 Economic Price Adjustment—Multiple Award Schedule Contracts.

Alternatively, if you plan to sell services on your GSA Schedule, it is most likely that you utilize a Market Pricelist. This means that you will propose either an annual escalation method OR a relevant Market Indicator (https://www.bls.gov/news.release/eci.toc.htm) to act as the basis for your increases. When utilizing the annual escalation method GSA prices increase by a specified percentage each year for the next 5 years.   Typically you can negotiate an escalation rate of around 2%, as GSA will try and keep it as low as possible. Bear in mind, that whatever escalation rate you propose to GSA, you should be prepared to follow that percentage commercially. As stated above, GSA likes to make sure they are receiving the lowest price possible! When choosing this method, you will need to provide a document declaring your utilization of Clause I-FSS-969 Economic Price Adjustment- FSS Multiple Award Schedule(b)(1), along with an “escalation build out”, specifying your rates for the next 5 years. Should you choose to utilize the Market Indicator method, declare that you will be utilizing Clause I-FSS-969 Economic Price Adjustment- FSS Multiple Award Schedule(b)(2) this means that each year at your contract anniversary date you will need to submit a modification request to have your rates increase by the percentage stated in the market indicator you chose at the time your contract was awarded. These tables will update each year and are industry specific.

5 years of Ice Cream Sundae rates, increasing by 2% each year.

If you’d like direct support from a GSA consultant to help with a specific project, reach out to us at info@elevategsa.com.

Also, check out our short podcast below that gives a breakdown of the different EPA Mechanisms.