As prescribed in 16.203-4(a)(2)(92) insert the following clause:
ECONOMIC PRICE ADJUSTMENT - FEDERAL SUPPLY SCHEDULE PRICES (AUG 2009) - DLAD
(a) This clause applies to any items under this contract where the offeror has proposed the same (or discounted) prices as their current Federal Supply Schedule prices and the Contracting Officer has accepted this pricing methodology. During the life of this contract, the Contracting Officer and the contractor may agree in writing to also apply this clause to any other items that previously were not, but subsequently become, available under both this contract and any concurrent FSS contract(s).
(b) Definitions:
(1) Federal Supply Schedule (FSS) Price(s): “FSS Prices” or “FSS Unit Prices” refer to the unit prices for specific commercial items the contractor and the Department of Veterans Affairs (DVA) have agreed to and are included in one or more current Federal Supply Schedule Contracts. All references to “FSS prices” or “FSS unit prices” shall be the prices appearing on the current Federal Supply Schedule for the same items under this contract.
(2) Discount: The percentage reduction off the FSS Unit Price proposed by the contractor and accepted 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. (Contractors may offer larger discounts and/or reduced Contract Unit Prices at any time.)
(3) Contract Unit Price: The price per unit of issue comprised of the FSS Unit Price and the applicable “Discount”. The Contract Unit Price is determined by reducing the FSS Unit Price by the appropriate Discount.
(4) Voluntary Price Reduction (VPR): See paragraph (k).
(c) The offeror/contractor warrants that (1) the FSS Unit Prices and the subsequent revisions thereto are the FSS 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 FSS Unit Prices do not include allowances for any portion of the contingency covered by this clause.
(d) Prior to award, the contractor must furnish a copy of their current FSS’s, FSS Unit Prices and the FSS contract expiration date for each item. The Contractor shall also furnish its offered Discounts and proposed Contract Unit Prices. At the option of the Contracting Officer, the contractor shall also furnish the documentation set forth in paragraphs (f)(1)(i)(I) and (f)(1)(ii) below. Upon acceptance by the Government, the Award Unit Prices shall be established at the FSS Unit Prices minus the offered Discounts.
(e) Downward Adjustments.
(1) Downward adjustments to Contract Unit Prices are mandated whenever there are decreases in FSS Unit Prices. The contractor shall promptly notify the Contracting Officer in writing of the amount and effective date of each decrease in FSS Unit Price. The contractor shall propose a lower Contract Unit Price taking into consideration the benchmark in paragraph (e)(2) below. The Contractor must furnish a copy of the revised FSS Contract and FSS Unit Prices as soon as they are available. Also, at least 30 days prior to the date when the reduced FSS Unit Price takes effect, the contractor shall furnish 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 following information:
(i) The item number; e.g., 0003.
(ii) The Supplier; e.g., ABC Dental, Inc.
(iii) The Product Name/Nomenclature; e.g., High Speed Handpiece.
(iv) The Part Number; e.g., HPH2000.
(v) The applicable contract discount used as a basis for determining the current Contract Unit Price.
(vi) The FSS Unit Price upon which the current Contract Unit Price is based.
(vii) The Contract Unit Price currently in effect.
(viii) The applicable Contract Discount or larger Contract Discount now offered.
(ix) The reduced FSS Unit Price.
(x) The reduced Contract Unit Price now offered.
(xi) The percentage decrease in FSS Unit Price from the FSS Unit Price that determined the Current Contract Unit Price to the new, lower FSS Unit Price.
(xii) The percentage decrease in Contract Unit Price from the current Contract Unit Price to the new lower Contract Unit Price now offered.
(2) Benchmark For FSS Price Reductions. The appropriate Contract Discount or larger Discount now offered will be applied to each reduced FSS Unit Price to determine the adjusted Contract Unit Price provided the adjusted Contract Unit Price does not exceed the following benchmark:
The offered reduction in Contract Unit Price on a percentage basis must be at least equal to the percentage reduction from the FSS Unit Price that determined the current Contract Unit Price to the new lower FSS Unit Price, i.e., the current Contract Unit Price must, as a minimum, be reduced by the percentage decrease in the FSS Unit Price.
(3) If the proposed Contract Unit Price exceeds the benchmark above, the Contracting Officer shall determine the proposed price reductions unreasonable. The Contracting Officer and contractor shall negotiate a reduction in the proposed Contract Unit Price to an amount that does not exceed the benchmark above. (All negotiated price reductions shall be confirmed in writing and will include the agreed-to price(s) and the FSS prices and discount(s) which make up these prices. The Contract will be modified as discussed directly below.) If the proposed Contract Unit Price does not exceed the benchmark above, it will be determined fair and reasonable. Upon acceptance of any proposed price decreases, the Government shall modify the contract to include the reduced Contract Unit Price(s) which will take effect on the same day the reduced FSS Unit Price takes effect. The modification will also show the applicable discount, the reduced FSS Unit Price(s) and their effective date(s). The reduced Contract Unit Prices shall apply to those items ordered on or after the effective date of the decrease in the Contractor’s FSS Price(s). If the contractor fails to notify the Contracting Officer of any FSS Unit 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 date the new FSS Unit Price takes effect.
(f) Upward Adjustments.
(1) Upward Adjustments may be requested at any time. The requested upward price adjustments must be based upon increases in the contractor’s FSS Unit Prices. The request shall include a copy of the revised FSS Unit Prices, and the following for each item with a proposed increase in Contract Unit Price:
(i) An 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; e.g., ABC Dental, Inc.
(C) The Product Name/Nomenclature; e.g., High Speed Handpiece.
(D) The Part Number; e.g., HPH2000.
(E) For the initial year, the FSS Unit Price that determined the Award Unit Price, the applicable Contract Discount, and the Award Unit Price. For all subsequent contract years, the FSS Unit 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 FSS Unit Price, 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 FSS Unit Price that determined the award unit price to the new higher FSS Unit Price. For all subsequent contract years, the percentage change from the FSS Unit Price that determined the highest Contract Unit Price that was in effect at any time during the preceding Contract Year to the new higher FSS Unit 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 and the General Services Administration at other than Federal Supply Schedule (FSS) prices, the non-FSS prices/discounts (if different than the reported FSS Unit Prices/Discounts) offered to those agencies.
(ii) Any other applicable supporting data requested by the Contracting Officer.
(2) Benchmarks For FSS Price Increases: If any FSS Unit Price increases, and the increase is authorized under this clause, the Contract Unit Prices for any corresponding items shall be determined using the increased FSS Unit Price(s) and either the applicable Discount(s) originally awarded or any larger Discount(s) now offered. These increased Contract Unit Prices shall apply to all orders issued on or after the effective date of these increases (see (f)(3) below). Proposed increases will be considered fair and reasonable if they do not exceed whichever is the lower of the following two benchmarks:
(i) For the Initial Year of the contract, any proposed increase in Contract Unit Price on a percentage basis cannot exceed the percentage increase from the FSS Unit Price that determined the award unit price to the new higher FSS Unit Price. For all subsequent Contract Years, any proposed increase in Contract Unit Price on a percentage basis cannot exceed the percentage increase from the FSS Unit Price that determined the highest Contract Unit Price that was in effect at any time during the preceding contract year to the new higher FSS Unit Price.
(ii) 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 acceptance of any proposed price increases, the Government shall modify the contract showing the increased Contract Unit Prices and when they become effective, the applicable discount, and the increased FSS Unit Price(s) and their effective date(s). Upward price adjustments shall be effective within 60 days after receipt of the contractor’s request for upward price adjustment (or at the same time the increased FSS 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 lower of the two 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 reduce the proposed Contract Unit Price to an amount which does not exceed the lower of the two benchmarks and reach an agreement on fair and reasonable prices. When discussions have concluded, the Contractor shall confirm the agreed-to price(s) in writing (The agreement shall also identify the FSS price and discount which makes up each agreed-to price.) Once the written agreement is received, the Government shall modify the contract showing the increased Contract Unit Prices and when they become effective, the applicable discount, and the increased FSS Unit Price(s) and their effective date(s). (No increases will be effective prior to the date the increased FSS takes effect.) If the Contracting Officer and the contractor are unable to agree upon the price for any items, the Contracting Officer will remove these items from the contract.
(4) Isolated incidents may occur for an item or group of items when proposed increases could exceed the annual ceiling benchmark in paragraph (f)(2)(ii). 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 from the contract. 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 benchmark.
(5) Any increased FSS Unit 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.
(g) If the Contracting Officer removes items from the contract for price unreasonableness (see (e)(3), (f)(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.
(h) If the Contracting Officer at any time has any reason to believe that the FSS Unit Price has been discontinued, the Contractor shall furnish relevant information as required by the Contracting Officer. If the Contracting Officer determines that the FSS Unit Price has been discontinued, the parties shall promptly agree upon an appropriate substitute for determining adjustments pursuant to this or some other appropriate EPA clause. The Contract shall be modified to incorporate the substitute and its effective date.
(i) 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.
(j) Pending approval of any proposed price changes and the issuance of any subsequent modification establishing the effective date of these changes, payment shall be made at the Contract Unit Prices in effect at the time of order.
(k) 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, 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 in effect at that time.
If an 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 FSS Unit 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 if no VPR had been in effect.
(End of clause)
