Contractors - Changing Your Awarded Pricing - VA Federal Supply Schedule Service
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VA Federal Supply Schedule Service

 

Contractors - Changing Your Awarded Pricing

  1. If the price of an item decreases am I required to submit a modification to decrease my awarded FSS contract price?
  2. Can we offer our employees actual medical insurance instead of the $3.81 Health & Welfare wage?
  3. What if we reduce the commercial list price, but do not reduce the tracking customer price? Are we still required to submit a price change modification?
  4. What if we increase the commercial list price, but do not increase the tracking customer price?  Are we permitted to submit an economic price adjustment request?
  5. If a tracking customer price change occurs and the tracking ratio is not disturbed, do I still need to notify my contract specialist?
  6. If all conditions of an economic price adjustment are met, does the CO still have the discretion to deny the request?
  7. If I negotiate a deeper discount with an ordering activity must I submit a price decrease modification?
  8. Is there also a cap on requesting a price increase based on the percentage increase to the commercial price?
  9. If the tracking customer price increases, but there is not a comparable price increase to the commercial list price, can I request a price increase modification?
  10. After contract award, can I offer a better ratio to the Government (through contract modification) offering the Government a better discount off list price?
  11. Is there a time frame after contract is awarded that I cannot submit an economic price adjustment request?
  12. Is the IFF paid in addition to the price listed by the Schedule contractor?

1.  If the price of an item decreases am I required to submit a modification to decrease my awarded FSS contract price?

The FSS contract price is a “ceiling price”, meaning that you cannot sell the item for more than the awarded FSS contract price.  You may offer reduced pricing to any federal customer at any time; however, if the price reduction meets any of the requirements of the Price Reductions Clause then you must submit a price reduction modification.

2.  Can we offer our employees actual medical insurance instead of the $3.81 Health & Welfare wage?

The Department of Labor manages all polices related to the Service Contract Act and wage determinations.

3.  What if we reduce the commercial list price, but do not reduce the tracking customer price?  Are we still required to submit a price change modification?

Yes, you are required to submit a price change modification if it meets any of the requirements of the Price Reductions clause.  Reminder: You can always offer a discounted price to a Government agency without the need to submit a price reductions modification.

A price reduction is required if your firm…

  1. Revises commercial pricing documentation to reduce prices;
  2. Grants more favorable discounts or terms & conditions than those contained in your standard pricing documentation; or
  3. Grants special discounts to the tracking customer and the change disturbs the tracking ratio

552.238-75(c), Price Reductions (May 2004)(Alt I - May 2003)

4.  What if we increase the commercial list price, but do not increase the tracking customer price?  Are we permitted to submit an economic price adjustment request?

No, in order to submit a price increase modification, you must meet all of the requirements of the economic price adjustment clause.

You may request an Economic Price Adjustment if all of the following conditions are met…

  1. The increase is the result of an increase to the commercial list price used as the basis for award;
  2. The increase is requested before the last 60 days of the contract period; and
  3. At least 30 days elapse between requested increases

Note:  The price increase is also limited by the tracking customer ratio established at time or award.

552.216-70(b), Economic Price Adjustment - FSS Multiple Award Schedule Contracts (Sep 1999) (Alt I - Sep 1999)(Deviation I - Apr 2007)

5.  If a tracking customer price change occurs and the tracking ratio is not disturbed, do I still need to notify my contract specialist?

No, per clause 552.235-75, Price Reductions, you are required only to submit a price change modification if your commercial list price is reduced.

6.  If all conditions of an economic price adjustment are met, does the CO still have the discretion to deny the request?

Yes, the CO must make a fair and reasonable pricing determination to ensure that the request is in the best interest of the Government.  To come to this determination, the CO may request additional justification documentation.

7.  If I negotiate a deeper discount with an ordering activity must I submit a price decrease modification?

No, if you issue a voluntary discount to an ordering activity based on the terms and conditions of the order you are not required to submit a price decrease modification to adjust your FSS contract.

8.  Is there also a cap on requesting a price increase based on the percentage increase to the commercial price?

Generally, the percentage increase to the Government cannot be more than the percentage increase to the commercial list price.  Work with your CO if you believe that justified/extenuating circumstances apply (e.g. increase to the price of raw materials, price of oil, etc.).

9.  If the tracking customer price increases, but there is not a comparable price increase to the commercial list price, can I request a price increase modification?

Yes, there may be extenuating circumstances (e.g. increase in oil prices, etc.) that may result in an increase to your tracking customer but not the list price.  In these instances your CO must determine that the price increase is fair and reasonable.  It is important that you provide strong rationale and justification for why the increase applies only to the tracking customer.

10.  After contract award, can I offer a better ratio to the Government (through contract modification) offering the Government a better discount off list price?

Yes, you can always offer the Government a lower price; however, the tracking ratio established at time of contract award is a “cap” on what you can charge the Government.  This ratio remains the same throughout the life of the contract, unless otherwise agreed upon by the Government and contractor.

11.  Is there a time frame after contract is awarded that I cannot submit an economic price adjustment request?

No, we do not require contractors to wait to submit an economic price adjustment request after contract award.  The only time you are not able to submit an EPA request is 60 days prior to the end of your contract period of performance (including before contract extension).

12.  Is the IFF paid in addition to the price listed by the Schedule contractor?

No, the IFF is already included in the net VA FSS price of an item/service.