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GSA’s Temporary EPA Moratorium Sputters Out of the Gate

Last week, this blog highlighted GSA’s March 17 release of Acquisition Letter MV-22-02Temporary Moratorium on Enforcement of Certain Limitations Contained in Certain GSA Economic Price (EPA) Contract Clauses (the Acquisition Letter). The letter provides pricing flexibility for Multiple Awards Schedule (MAS) contractors to address the impact of inflation across their business operations. It specifically reduces management approvals and gives contracting officers the ability to raise prices in contracts that include Economic Price Adjustment (EPA) clauses by freezing limitations on EPAs. This letter is mandatory for GSA, and the Coalition’s full discussion appears here.

Regular readers of this blog will recall that the Coalition commended GSA for its proactive efforts to recognize the impact that the current historic rise in inflation has on the government’s industrial base, as well as the need to address that impact to assure stability in that base. We specifically stated that,

…communication and training steps remain if GSA’s efforts are to be successful in supporting the industrial base in mitigating the impact of inflation. This communication plan and training falls on the Federal Acquisition Service (FAS).

…[T]he Acquisition Letter provides, in part, that “[t]o support the implementation of this Letter, FAS should take actions as deemed necessary, including developing a communication approach, training the acquisition workforce, and tracking usage of this temporary moratorium.” Swift, efficient, and effective rollout of training and operational guidance to FAS’s contracting officers is critical to promoting positive business outcomes for MAS contractors and, ultimately, MAS customer agencies.

Fast forward to this week, and reports are surfacing that, with respect to implementation of the Acquisition Letter by GSA’s contracting organization, something has been lost in translation. Members are reporting that contracting officers are overlaying arbitrary (as in nowhere to be found in the Acquisition Letter) information requirements on contractor EPA submissions, effectively capping prices at certain levels without any nexus to contractor experiences in the market. In addition, the scope of these information requirements is broad, indeed, broader than would exist otherwise and seeking information that is beyond the right of contracting officers to request. All told, even if contractors were to comply with such information requests, the administrative delay associated with them would be onerous.

One would assume that, in the face of an Acquisition Letter issued specifically to address exigent circumstances and assure stability in the government’s industrial base during challenging and dynamic economic times, GSA’s very own contracting organization, by unilateral action, would not elect to impose administrative requirements that operate to undermine the purposes of that letter. Given the potential for agency buyers and vendors to engage in transactions via other contracting channels, in other words, to destabilize the MAS channel as the vehicle of choice, it is imperative that FAS immediately take the actions necessary to assure licit and consistent implementation of the Acquisition Letter, especially training the acquisition workforce and rolling out consistent guidance across the agency to contracting staff.

As the Coalition noted in its prior blog,

Transparency also is critically important. MAS contractors should be made aware of any new guidance included in the training. Likewise, providing an understanding of the changes in the process and how contracting officers will be handling EPAs will help MAS contractors prepare responsive pricing submissions for EPAs.

To this end, Coalition members are sharing their experiences as the Acquisition Letter continues to be implemented. We will provide feedback to GSA/FAS to assist them in assuring a successful implementation of the letter. Now, in this time of economic difficulty, it is important for all stakeholders to share a common understanding of the processes in place that will maintain stability in the government’s supplier base. The Coalition remains committed to doing its part.

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