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Deciding between the 3 GSA Price Increase Methods

GSA Price Increase

There are three (3) methods the GSA offers for future Economic Price Adjustments (AKA: GSA Price Increase).

(1) You raise prices when you see fit (EPA Method) #

[In English] — If you change your Commercial Price List and Rates, whenever and however you choose, then the “EPA Method” is likely the best option for you. This is under clause 552.216-70. An added benefit is that the annual threshold is 5% for Services and 10% for Products, which is a higher allowed GSA Price Increase than methods 2 & 3 below.

[GSA verbiage] If proposed pricing is based on a published or publicly-available commercial price list, submit a copy of the company’s current, dated, price list, catalog, or standard rate sheet (note that this must be an existing, standalone document, and not prepared for purposes of this solicitation). Future price adjustments for pricing based on a commercial price list are subject to clause 552.216-70 Economic Price Adjustment – Multiple Award Schedule Contracts.

(2) Annual Escalation OR (3) Based on and Index #

[In English] — you change your Market Rates on either (1) a standard annual percentage, or (2) according to a Market Indicator (like BLS), then you will fall into clause I-FSS-969. These options are common Government Contracts, so Contractors who do almost exclusive work with the the US government gravitate towards these methods. As of 2021, an Annual Escalation GSA Price Increase is difficult to secure above 2.5%.

[GSA verbiage] If proposed pricing is based on commercial market prices, future price adjustments are subject to clause I-FSS-969 Economic Price Adjustment – FSS Multiple Award Schedule. The offeror must either propose a fixed annual escalation rate in accordance with I-FSS-969 paragraph (b)(1) OR propose a relevant market indicator (e.g., the Bureau of Labor Statistics Employment Cost Index(ECI)) in accordance with I-FSS-969 paragraph (b)(2).

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