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Mastering the New GSA MAS Economic Price Adjustment (EPA) Clause 552.238-120

The General Services Administration (GSA) has implemented a significant overhaul of the process for managing price adjustments under Multiple Award Schedule (MAS) contracts. With the incorporation of GSAR clause 552.238-120under MAS Refresh 29, which occurred on August 28, 2025, contractors need to understand the new requirements for maintaining their pricing.

This new single-clause approach effectively removes the traditional Economic Price Adjustment clauses, IFSS 969 and 552.216-70, and replaces them with a one-stop-shop EPA clause.

The Major Shift in Authority

The most important difference with the new clause is that it now requires the contracting officer and the contractor to mutually agree upon the specific method and mechanism for future price adjustments. Unlike the old clauses, which provided predefined methods and mechanisms, this transition grants both parties flexibility but necessitates a formal action to incorporate the agreed-upon terms.

When Do You Need to Act? Triggering Events

For existing contracts, you must first accept Refresh 29, which incorporates the new clause. However, the new EPA method and mechanism must be formally established via a Revise Terms & Conditions modification (Mod) only when a triggering event occurs. Critically, this modification must be submitted prior to the triggering event itself.

Key triggering events include:

1. EPA Modification Request: If you plan to submit a price increase modification, you must incorporate the new EPA method first.
2. Addition Mod: Any modification adding products, labor categories, or SINs (Schedule Information Numbers) requires the EPA method to be established beforehand.
3. Option Exercise: Before the GSA exercises a contract option, the new EPA method and mechanism must be incorporated.

Contractors are also encouraged to take a proactive approach and submit the Revise Terms & Conditions mod as soon as they accept Refresh 29. This ensures the mechanism is already in place when an unexpected triggering event arises.

Choosing Your Path: The Four Mechanisms

The new clause relies on the GSAM (General Services Acquisition Manual) 538.270-4 for detailing the methods for future adjustments, which includes three primary mechanisms and one automatically incorporated option. You must choose a mechanism that aligns with your actual commercial practices.

Mechanism 1: Fixed Escalation

This mechanism is often used for services or labor category contracts where a predictable annual cost increase is common.

• Key Limitation: Fixed escalation must occur annually on the anniversary date of the contract award. There is no other timing allowed for this mechanism.
• Documentation: Rationale is generally based on utilizing a five-year average of the Bureau of Labor Statistics (BLS) Employment Cost Index (ECI) for a series relevant to the services offered.
• Administrative Benefit: Once approved, no modification is required for future escalations, significantly reducing administrative burden.

Mechanism 2: Market Index or Other Basis

This method bases future adjustments on an objective market indicator or benchmark, such as the Employment Cost Index.

• Best Fit: Suitable for labor categories or services tied to specific market indicators. It is generally notrecommended for contractors with a wide variety of products or high volatility.
• Flexibility: While annual increases are often recommended due to the administrative burden of frequent modifications, this method allows for annual, semi-annual, or quarterly adjustments depending on how the chosen index updates.
• Requirement: Price changes require a modification request with each EPA submission, including the most current index information.

Mechanism 3: Established Pricing

This mechanism is the most common choice for product contracts. Adjustments are based on changes reflected in a contractor’s established commercial price list (CPL) or catalog that is regularly maintained.

• Requirements: The established pricing document must be publicly available upon request or published. It cannot be created solely for the GSA contract; it must reflect true commercial practice.
• Process: Like the Market Index, each price increase requires the submission of a modification, accompanied by a new dated copy of the price list or catalog.

Mechanism 4: Extraordinary Market Conditions

This mechanism is automatically incorporated into all contracts. It is intended for rare occurrences that involve unforeseeable, significant changes in market conditions, such as natural disasters or events like COVID.

Tips for a Smooth Transition

To ensure a smooth transition and rapid approval of your modification:

• Start Early: Do not wait until the last minute before a triggering event.
• Align with Practice: Ensure the mechanism and limitations you propose (frequency, timing, ceiling) genuinely reflect your commercial practices.
• Utilize Resources: Refer to the MAS Modification Guide and the cover letter template, which provide step-by-step instructions and required documentation for submitting your Revise Terms & Conditions modification.
• Be Transparent: Provide clear rationale and documentation supporting your choice of EPA method and mechanism.

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