[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 [www.gpo.gov]
[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 [email protected] or 202-
445-0390. For information pertaining to status or publication 
schedules, contact the Regulatory Secretariat at [email protected] 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