As prescribed in 16.203-4(d)(2)(90) insert the following clause:
ECONOMIC PRICE ADJUSTMENT (EPA) - DEPARTMENT OF LABOR BUREAU OF LABOR STATISTICS - CONSUMER PRICE INDEX (AUG 2009) - DLAD
(a) The contractor warrants that the contract unit prices do not include allowances for any portion of the contingency covered by this clause.
(b) Consumer Price Indexes (CPIs) are published by the U.S. Department of Labor, Bureau of Labor Statistics. The CPI for the Expenditure Category “Prescription Drugs and Medical Supplies” or “Nonprescription Drugs and Medical Supplies” located in Table 3 under “Medical Care Commodities” will be the economic indicator used for calculating the Proposed New Unit Price for any Option Period to be exercised by the Government. The CPI, as used in this clause, means the index, as published monthly, not seasonally adjusted, for all Urban Consumers (CPI-U), U.S. City Average. The index for a given month is available approximately two weeks into the following month.
The item(s) offered are: PRESCRIPTION ( ) NONPRESCRIPTION ( ) (Offeror must check appropriate block)
(c) All references to the terms “FSS Unit Price(s)" or “FSS Price(s)” used herein, means the prices appearing in the contractor’s current Federal Supply Schedule for the same items under this contract.
(d) Price Adjustments Based Upon CPI Changes.
(1) Price adjustments (increases and decreases) based upon changes in the CPI indexes are authorized once for each Option Period provided the Government elects to exercise that Option. Price increases must be requested by the Contractor. Any Request for a price increase must be submitted to the contracting officer at least thirty days prior to the expiration of the current contract period in order for a price increase to take effect at the same time the upcoming Option Period takes effect (all indexes used to calculate the base and adjusting indexes should be available by this time). The request must include the calculations used to compute the Proposed New Unit Price and a comparison of the appropriate benchmarks to the Proposed New Unit Price. Price decreases are mandated by this clause. The Contractor shall notify the Contracting Officer of any price decreases in accordance with the same timeframe and provide the same information as required for increases above.
(2) Price Increases: If a request is not submitted within the required timeframe, increases will not take effect until 30 days after the request is received. If no request is received within 60 days after the New Option Period takes effect, the Contractor waives its right to a price increase for that Option Period. Price Decreases: If the Contractor fails to report any price decrease, the Contracting Officer will unilaterally establish a New Option Period Unit Price based upon the parameters for adjustment under this clause.
(e) Additional Price Adjustment(s). The Contractor is required to notify the Contracting Officer whenever there is a reduction in the Contractor’s FSS Unit Price and/or the Federal Ceiling Price (FCP) at least 30 days prior to its taking effect for the same item(s) as under this contract when that reduction results in an FSS Price and/or FCP that is now lower than the current contract Unit Price. This notification will trigger a price reduction in the current Contract Unit Price to an amount equal to the lower FSS Unit Price and/or FCP. (For covered drugs where both the FSS and FCP have been reduced, the Contract Unit Price shall be reduced to the lower of the two.)
(f) Calculation of the UNIT PRICE for the Option Periods Based Upon Changes In The CPI.
(1) A "Base" and "Adjusting" index shall be established for each Option Period. (see paragraph (g) below).
(2) The Unit Price for the Contract Period about to expire will be increased or decreased based upon the percentage change from the Base Index to the applicable Adjusting Index using the formulas below.
First Option Period:
Proposed New U/P for = Adjusting Index x Current Contract U/P for the
First Option Period Base Index expiring Base Period
Subsequent Option Periods:
Proposed New U/P for = Adjusting Index x Current Contract U/P for the
Upcoming Option Period Base Index expiring Option Period
(3) The Proposed New Unit Price will be used to price the upcoming Option Period provided it does not exceed the lowest of the applicable benchmarks. If it does exceed the lowest of the applicable benchmarks, however, the Contractor shall agree on a price reduction to an amount which is equal to or lower than the lowest of the applicable benchmarks. This reduced Unit Price will then be used to price the Upcoming Option Period.
(g) Determining the "Base" and "Adjusting" Indexes For Price Changes Based Upon the CPI. A Base and Adjusting Index shall be established for each Option Period.
(1) For the first Option Period, the Base Index shall be the arithmetic average of the CPI indexes published for the month before and the actual month the award is made. The Adjusting Index shall be the arithmetic average of the CPI indexes published for the third and fourth month prior to the month the Base Period expires (e.g., if the Base Period expires in June, the Adjusting Index would be the average of the indexes published for February and March of the Base Period.)
(2) For subsequent Option Periods, the Base Index for any Upcoming Option Period shall be the previously established Adjusting Index (e.g., the Base Index for the upcoming second Option Period shall be the Adjusting Index established for the first Option Period.) The Adjusting Index for any Upcoming Option Period shall be the arithmetic average of the CPI Indexes published for the third and fourth months prior to the month the current option period expires (e.g., if the first Option Period expires in June, the Adjusting Index for the upcoming second Option Period would be the average of the indexes published for February and March of the first Option Period).
(h) Benchmarks For Price Changes Based Upon the CPI:
(1) Any Proposed New Unit Price calculated as a result of using the formula in (f) above shall not exceed whichever is the lowest of the following applicable benchmarks:
(i) the maximum ceiling Unit Price calculated by escalating the expiring contract period unit price by 10% (e.g., the ceiling for the first Option Period Unit Price will be based on the Base Period Unit Price escalated by 10%; the ceiling for the third Option Period Unit Price will be based on the second Option Period Unit Price escalated by 10%.) (Applies to price increases only. There is no percentage limit on downward adjustments under this clause.);
(ii) the Contractor’s current Federal Supply Schedule Price for the same item (applies to all adjustments where the Contractor has a concurrent FSS for the same item(s) as under this contract); and
(iii) the current Federal Ceiling Price for the same item (applies to Covered Drugs only).
(i) All price increases or decreases (including any decreases under paragraph (e) above) under this clause shall be effected through the issuance of a modification. The modification shall indicate the New Unit Price and the effective date of that price, which, in most cases, should be on the same date the Option Period takes effect. All delivery orders issued after the effective date shall be priced using the New Unit Price. The modification shall also include the Adjusting Index.
(j) Payment on each delivery order under this contract shall be at the contract unit price in effect at the time the order is issued.
(k) In the event publication of any CPI Index used under this clause is discontinued or its method of calculation is altered substantially in that it fails to reflect market conditions, the Contracting Officer may modify the contract to specify use of an appropriate substitute index or alternate method for adjusting prices. The substitute index or alternate adjustment method will take effect on the date the original index begins to fail to reflect market conditions.
(l) Any pricing actions pursuant to paragraph (c) entitled "Changes" of FAR Clause 52.212-4 (including any revisions by addendum thereto) or any other provisions of the contract shall be priced as though there were no provisions for economic price adjustment.
(m) Voluntary Price Reductions (VPR):
(1) 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, the applicable 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 Prices that would be in effect at that time.
(2) If any VPR is in effect when a price decrease is mandated under this clause, the VPR will remain in effect until it expires if it is lower than the price decrease. If the Contractor requests a price increase based upon an increase in the CPI indexes 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)
