As prescribed in 16.203-4((a)(2)(90) insert the following clause:
ECONOMIC PRICE ADJUSTMENT - ESTABLISHED CATALOG PRICE TWO UPWARD ADJUSTMENTS PER YEAR OPEN SEASON E-CAT SOLICITATION (AUG 2009) - DLAD
(a) All price adjustments authorized or mandated by this clause are based upon changes in the Contractor’s List Prices and certain Federal Supply Schedule (FSS) Unit Prices. The clause also provides for voluntary price reductions (VPR) in the form of “specials” or “discounts”.
(b) Definitions:
(1) Contract Unit Price: The price per unit of issue comprised of the “List Price” and the applicable “Discount”. The Contract Unit Price is determined by reducing the applicable List Price by the appropriate Discount. Proposed revised prices are loaded by the contractor into an E-CAT File and are forwarded electronically to the Government. The Contractor shall also separately submit (in Excel Spreadsheet or ACCESS Database format) the additional information as required in paragraphs (g) and (h) below in order for the Government to review and evaluate these proposed price changes. Upon the Government’s determination that the offered unit prices are acceptable/fair and reasonable, the Government shall release them into the contract electronic catalog residing in the E-CAT System. (Contract Unit Prices, List Prices, and Discounts under this contract are not visible in the E-CAT System to the contractor or any customer. The prices visible in the E-CAT System to the contractor or any customer are the Delivered Unit Prices which are the Contract Unit Prices plus the DSCP Administrative Fee percentage (in effect at that time) charged customers ordering under this contract.)
(2) Discount: The percentage reduction off the List Price proposed by the contractor, accepted by the Government, and maintained in the contract file (not the E-CAT System) by the Government. These percentages may vary per item and quantity ordered. They shall be agreed to at time of award and may not be reduced for the life of the contract. These discounts are in addition to any standard trade discounts in the contractor’s established commercial Catalog/Price List. (Contractors may offer larger discounts and/or reduced List Prices at any time.)
(3) List Price: The established Catalog Unit Prices of the items. In order for a “List Price” to meet the criteria as an established Catalog Price, it must meet the definition in (c)(1) below.
(4) Voluntary Price Reduction (VPR): See paragraph (l).
(c)(1) The term "established Catalog Unit Price", as used in this clause, means a Unit Price that (i) is a Catalog Price for a commercial item sold in substantial quantities to the general public and (ii) is the net price after applying any standard trade discounts offered by the contractor.
(2) Unless otherwise specified, all reference to the terms “FSS Unit Price”(s) or “FSS Price(s)” as used in this clause, shall be the prices appearing in the contractor’s current Federal Supply Schedule for the same items under this contract.
(d) The offeror/contractor warrants that (1) the List Prices and the subsequent revisions thereto are the established Catalog Unit Prices in effect at time of Award or adjustment for like quantities of the same items and (2) any Contract Unit Prices determined using these List Prices do not include allowances for any portion of the contingency covered by this clause. The offeror/contractor also warrants that any Contract Unit Prices determined using FSS Unit Prices do not include allowances for any portion of the contingency covered by this clause.
(e) Prior to award the contractor must furnish:
(1) their current established Catalog/Price List, offered Discounts, proposed Contract Unit Prices; and
(2) a copy of their current FSS’s, FSS Unit Prices, and the FSS contract expiration dates applicable to items offered as well as any other information required by the Contracting Officer.
(f) Upon acceptance by the Government, the Award Unit Prices will be established at the List Prices minus the offered Discounts provided the resulting Contract Unit Prices do not exceed the current FSS Unit Price for the same item. Accordingly, offers are cautioned to propose discounts which, when applied to the list prices, will not exceed FSS Unit Prices.
(g) Downward Adjustments.
(1) Downward adjustments to Contract Unit Prices are mandated whenever there are decreases in either 1) List Prices or 2) FSS Unit Prices when the reduction results in a revised FSS Price which is now lower than the current Contract Unit Price. The contractor shall promptly notify the Contracting Officer in writing of the amount and effective date of each decrease in List Price and any FSS Unit Price reduction which results in an FSS Unit Price which is now lower than the current Contract Unit Price. If the offered price decrease is based upon a reduction in List Price or FSS Price, the Contractor shall propose a lower Contract Unit Price taking into consideration the benchmarks in paragraphs (g)(2) and (3) below. The contractor must furnish a copy of the revised Catalog/Price List or FSS Unit Price as soon as it is available. Also, for reductions in List Prices, the contractor must provide a copy of the “E-CAT file” at least 60 days prior to the date when the reduced List Prices take effect. For reductions in FSS, the Contractor shall provide a copy of the E-CAT file at least 30 days prior to the date the reduced FSS Unit Price takes effect. In addition to the “E-CAT file” and any other information required by the Contracting Officer, the contractor shall also separately furnish, within the appropriate timeframe above (i.e., at least 60 days for a reduction in List Price; at least 30 days for a reduction in FSS), an Excel spreadsheet or ACCESS database (in both hard copy and disc) that displays for each item with an offered decrease in Contract Unit Price the appropriate information below:
(i) For List Price or FSS Changes: The item number; e.g., 0001AA.
(ii) For List Price or FSS Changes: The Supplier (Catalog); e.g., ABC Imaging, Inc.
(iii) For List Price or FSS Changes: The Product Name/Nomenclature; e.g., High Speed Handpiece.
(iv) For List Price or FSS Changes: Part Number; HIH 2000
(v) For List Price or FSS Changes: The List Price upon which the current Contract Unit Price is based.
(vi) For List Price or FSS Changes: The applicable Contract Discount used as a basis for determining the current Contract Unit Price.
(vii) For List Price or FSS Changes: The Contract Unit Price currently in effect.
(viii) For List Price Changes: The reduced List Price.
(ix) For List Price or FSS Changes: The applicable Contract Discount or larger Contract Discount now offered.
(x) For List Price or FSS Changes: The reduced Contract Unit Price now offered.
(xi) For List Price Changes: The percentage decrease in List Price from the List Price which determined the current Contract Unit Price to the new, lower List Price.
(xii) For List Price Changes: The percentage change in Contract Unit Price from the current Contract Unit Price to the new lower Contract Unit Price now offered.
(xiii) For FSS Changes: The current FSS Unit Price which is about to expire and the new reduced FSS Unit Price which will replace it and triggered this Contract Unit Price reduction.
(xiv) For List Price Changes: For any items offered to the Department of Veterans Affairs (DVA) under the FSS, the current FSS Unit Price(s) for the same item.
(2) Reductions in List Price(s). If the offered price decrease is based upon a reduction in the List Price, the appropriate discount or larger discount now offered will be applied to each reduced List Price to determine the adjusted Contract Unit Price provided the proposed lower Contract Unit Price does not exceed the lower of the following two benchmarks:
(i) The offered reduction in Contract Unit Price on a percentage basis must be at least equal to the percentage reduction from the List Price currently in effect under the contract to the new lower List Price; i.e., the current Contract Unit Price must, as a minimum, be reduced by the percentage decrease in List Price.
(ii) The new proposed lower Contract Unit Price shall not exceed the current FSS Unit Price for the same item.
(3) FSS Price Reductions. If the offered price decrease is based upon a reduction in the FSS Price, the proposed lower Contract Unit Price shall not exceed the following benchmark:
The new proposed lower Contract Unit Price shall not exceed the revised lower FSS Price for the same item.
(4) If the proposed Contract Unit Price exceeds the lower of the appropriate List Price benchmarks (for reductions based upon reduced List Prices) or the FSS Price benchmark (for reductions based upon reduced FSS Prices), the Contracting Officer shall determine the proposed price reductions unreasonable and negotiate a price reduction which results in a Contract Unit Price that does not exceed the appropriate benchmarks. (All negotiated price reductions shall be confirmed in writing and will include the agreed-to price(s) and the list or FSS price(s) and discount(s) which make up these prices.) If an agreement cannot be reached the Contracting Officer has the option of removing these items from the E-CAT system or taking the action in the last sentence below. If the proposed Contract Unit Price does not exceed the lowest of the appropriate List Price or FSS Price benchmarks, it will be determined fair and reasonable. Upon acceptance of any proposed price decreases, the Government shall modify the contract electronic catalog residing in the E-CAT System to include the reduced Contract Unit Prices. These reduced Contract Unit Prices shall apply to those items ordered on or after the date when these prices appear in the contract electronic catalog residing in the E-CAT system (Revisions will not be added to the electronic catalog prior to date they take effect). If the contractor fails to notify the Contracting Officer of any List Price or FSS Price decreases within the timeframe and in the manner stated above or agreement on any reduction cannot be reached, the Contracting Officer may determine the applicable adjustment and authorize a unilateral price adjustment retroactively applied to all items ordered on or after the effective date of the decrease in the Contractor’s established List or FSS Prices.
(h) Upward Adjustments.
(1) The contractor is authorized to submit a maximum of two requests for upward adjustment for each Contract Year. Each request for upward price adjustment must be based upon increases in List Prices only. They may be submitted from, for the first contract year, 30 days after award to sixty days prior to the end of that year and, for each subsequent contract year, from 30 days after the anniversary date of the contract award to 60 days prior to the end of each contract year. The Contractor shall propose a Contract Unit Price taking into consideration the benchmarks in paragraph (g)(2). The request shall include a copy of the revised Catalog/Price List, the “E-CAT file” and the following for each item with a proposed increase in Contract Unit Price:
(i) A separate Excel spreadsheet or ACCESS database, in both hard copy and disc, that displays for each item with a proposed price increase the following information:
(A) The item number; e.g., 0003.
(B) The Supplier(Catalog); e.g., ABC Dental, Inc.
(C) The Product Name/Nomenclature; e.g., High Speed Handpiece.
(D) The Part Number; e.g., HIH2000.
(E) For the initial year, the List Price that determined the Award Unit Price, the applicable Contract Discount, and the Award Unit Price. For all subsequent contract years, the List Price that determined the highest Contract Unit Price that was in effect at any time during the preceding Contract Year, the applicable discount, and the highest Contract Unit Price that was in effect during the preceding Contract Year.
(F) The increased List Price and its effective date, the applicable Contract Discount or larger Contract Discount now offered, and the proposed higher Contract Unit Price.
(G) For the initial year, the percentage change from the List Price that determined the award unit price to the new higher List Price. For all subsequent contract years, the percentage change from the List Price that determined the highest Contract Unit Price that was in effect at any time during the preceding Contract Year to the new higher List Price.
(H) For the initial year, the percentage change from the award unit price to the new higher proposed Contract Unit Price. For all subsequent contract years, the percentage change from the highest Contract Unit Price that was in effect at any time during the preceding contract year to the new higher proposed Contract Unit Price.
(I) For any items offered to the Department of Veterans Affairs (DVA) under the FSS, the current FSS Unit Price(s) for the same item.
(J) Any other information required by the Contracting Officer.
(2) Benchmarks. If any List Price increases, and the increase is authorized under this clause, the Contract Unit Prices for any corresponding items ordered after the increase takes effect in the E-CAT system shall be determined using the increased List Price and either the applicable Discount originally awarded or any larger Discount now offered that applies to the affected item. Proposed increases will be considered fair and reasonable if they do not exceed whichever is the lowest of the following three benchmarks:
(i) For the Initial Year of the contract, the proposed increase in Contract Unit Price on a percentage basis cannot exceed the percentage increase from the List Price that determined the award unit price to the new higher List Price. For all subsequent Contract Years, the proposed increase in Contract Unit Price on a percentage basis cannot exceed the percentage increase from the List Price that determined the highest Contract Unit Price that was in effect at any time during the preceding contract year to the new higher List Price.
(ii) Any proposed higher Contract Unit Price shall not exceed the current FSS Unit Price for the same item.
(iii) Any proposed higher Contract Unit Prices are subject to the following limitations:
(A) For the initial Contract Year, Contract Unit Price increases shall be limited to the following annual ceiling(s) applied to the award unit price for the same item (i.e., any proposed higher Contract Unit Price cannot exceed the award unit price plus the annual ceiling).
(B) For all subsequent Contract Years, Contract Unit Price increases shall be limited to the following annual ceiling(s) applied to the highest Contract Unit Price in effect during the preceding Contract Year for the same item (i.e., any proposed higher Contract Unit Price cannot exceed the highest Contract Unit Price in effect during the preceding Contract Year plus the annual ceiling.)
ANNUAL CEILING, ALL ITEMS: 10%
There is no percentage limit on downward adjustments under this clause.
(3) Upon approval of the proposed price increases, the Government shall modify the contract electronic catalog residing in the E-CAT System to include the increased Contract Unit Prices. Upward price adjustments shall be effective once they appear in the contract electronic catalog residing in the E-CAT system. These updates will take place within 60 days after receipt of the contractor’s request for upward price adjustment (or at the same time the increased List Price takes effect, whichever is later) unless the Contracting Officer is unable to determine during that period that a price increase on any item or items is fair and reasonable (i.e., the proposed Contract Unit Price exceeds the lowest of the three benchmarks above). In this case, no price increases will be authorized for those items until the Contracting Officer is able to determine the price increases for those items to be fair and reasonable. If necessary, the Contracting Officer shall conduct discussions with the Contractor to negotiate a price reduction which results in a Contract Unit Price that does not exceed the lowest of the three benchmarks. When discussions have concluded and an agreement which results in fair and reasonable prices is reached, the Contractor shall confirm the agreed-to price(s) in writing and forward an E-CAT file which includes the agreed-to price(s). (The agreement shall also identify the list price and discount which makes up each agreed-to price.) Once the written agreement is received, the Government shall modify the contract electronic catalog residing in the E-CAT System to include the increased Contract Unit Prices. If the Contracting Officer and the contractor are unable to agree upon the price for any items, the Contracting Officer will delete these items from the catalog in the E-CAT System. (This procedure applies to only those items whose prices the Contracting Officer is unable to determine fair and reasonable within the 60-day period the Government has to evaluate prices and update the E-CAT System. The remainder of the items whose price increases are determined fair and reasonable, shall be entered into the E-CAT system within the prescribed period.) In addition, the Contracting Officer may also, at any time, remove any item from the catalog in the E-CAT System that the Contracting Officer believes is no longer reasonably priced (if the Contracting Officer and the contractor are unable to agree upon a reduced price) and notify customers accordingly.
(4) Isolated incidents may occur for an item or group of items when proposed increases could exceed the annual ceiling benchmark in paragraph (h)(2)(iii). In such cases the Contractor can submit an adequately justified written request for Contracting Officer approval of an increase in Contract Unit Price that exceeds the ceiling. The Contracting Officer may approve the request on a one-time basis, increase the ceiling for the item or group of items if appropriate, negotiate a lower Contract Unit Price, or delete the item(s) from the contract electronic catalog residing in the E-CAT system. In no case may the increase in Contract Unit Price exceed the ceiling without written authorization from the Contracting Officer. Also, no increase will be authorized that results in a Contract Unit Price that exceeds the other benchmarks.
(5) Any increased List Prices shall not be used to compute Contract Unit Prices for Delivery Orders issued before the date the adjusted Contract Unit Prices take effect under the Contract (i.e., the date they appear in the contract electronic catalog residing in the E-CAT system).
(6) If the Contracting Officer removes items from the E-CAT system for price unreasonableness (see (g)(4) and (h)(3)and (4) above), all outstanding orders issued prior to the date the items are removed shall be delivered in accordance with the contract delivery schedule and the Government shall pay for such items at the Contract Unit Price in effect at the time of the order.
(i) If the Contracting Officer at any time has any reason to believe that the established List Price has been discontinued, the basis for the List Price has been substantially altered, or that the item no longer meets the criteria to qualify as an established Catalog Priced item, the Contractor shall furnish relevant information as required by the Contracting Officer. If the Contracting Officer determines that any of the preceding conditions are present and a substitute for determining price adjustments is needed, the parties shall promptly agree upon an appropriate substitute for determining adjustments pursuant to this clause. The Contract shall be modified to incorporate the substitute and its effective date.
(j) Pricing actions pursuant to paragraph (c) entitled “Changes” of FAR clause 52.212-4 (including any revisions by addendum thereto) or any other provision of this Contract will be priced as though there were no provisions for Economic Price Adjustment.
(k) Pending approval of any proposed price changes and revision of the Contract Unit Prices in the contract electronic catalog residing in the E-CAT System, payment shall be made at the Contract Unit Prices in effect at the time of order.
(l) Voluntary Price Reductions (VPR): A “special or discount” offered by the Contractor which results in a voluntary price reduction for an item or group of items for a given period of time. The Contractor may offer a VPR at any time. The price reductions resulting from these VPRs will be in addition to any price reductions mandated by this EPA clause. The contractor shall notify the Contracting Officer when the VPR takes effect, which items are items included, and the length of time the VPR will remain in effect. Once the “special or discount” period expires, prices will revert to the Contract Unit Price(s) in effect at that time.
If a List Price (or FSS Unit Price) decreases when a VPR is in effect, the VPR will remain in effect until it expires if it is lower than the proposed unit price decrease. If the Contractor requests a Contract Unit Price increase based upon an increased List Price when a VPR is in effect, the VPR shall remain in effect until it expires. Upon expiration of the VPR, prices will revert to the adjusted Contract Unit Prices, as calculated in accordance with this clause as if no VPR had been in effect.
(End of clause)
