Attachment 37 - Addendum to 52-212-4 Para W - Economic Price Adjustment 20221129 .pdf

Addendum to 52.212-4 Paragraph (w):

Economic Price Adjustment – Non-Labor

1. Economic Price Adjustments will only apply to periods beginning with option year two, will only apply to the price elements of FFP-EPA CLINs identified below and only apply if the adjustment rate specified below exceeds plus/minus 3% for the period of consideration. Multiple annual periods will not be used to accumulate to the plus/minus 3% threshold.

2. Items and dollar amounts subject to adjustment must be clearly identified in the proposal and all proposal revisions. If the contractor does not clearly identify these elements and the sum of their dollar amounts that contribute to the price of a CLIN, no adjustments will be made to that

CLIN. The contract price may be increased or decreased based on the change of the index.

3. Only allowable and allocable non-labor elements making up the total price of an FFP-EPA CLIN are subject to adjustment. Items specifically excluded from adjustment include, but may not be limited to, G&A, overhead, profit/fee, and any other markups as may be listed in the proposal.

4. Following award, the contractor will provide the Contracting Officer a calculator, such as an

Excel spreadsheet compatible with the Contracting Officer’s systems, in a format acceptable to the Contracting Officer, that clearly identifies all elements eligible for adjustment, per CLIN per year. All amounts and totals must match those of the final submitted proposal. The spreadsheet must allow the adjustment percentage to be entered for each year and calculate the amount of the adjustment and the new price for each CLIN for that year. The calculator will not increase

CLIN prices based on previous year adjustments. The calculator will be unlocked and show all formulas. If any errors are found in the amounts of the proposal elements, no corrections will be allowed that increase the total amounts for adjustable items per CLIN identified in the proposal.

Any errors found that result in a decrease will be used to adjust the contract price accordingly by modification.

5. When an adjustment is made for a year, that amount will be added via one or more adjustment

CLINs/subCLINs for that year. Adjustment CLINs/subCLINs for that amount will also be made to all remaining option years and earned award term years. Henceforth in this section the term

“option” will also encompass earned award term option years.

6. Economic Price Adjustments will be based on the Department of Labor’s "Final Demand Goods

Government Purchased Goods excluding foods and energy, not seasonally adjusted" index. The

Unadjusted 12-month percentage change for the preceding 12 months will be used. Should DOL eliminate this index, their designated replacement index will be used. Should DOL not replace the index, an appropriate index will be negotiated. Should DOL substantially alter the method of computing the index such that the original intent of the parties is negated as determined by the

Contracting Officer, an alternate index will be negotiated. Should an alternate index not be agreed upon, the Contracting Officer will determine the index to use. In such case, the

Contractor may exercise any rights afforded them under the Federal Acquisition Regulations

(FAR) as supplemented, and the terms of the contract.

7. Should the contract be modified to include work at a Firm Fixed Price for which, at the sole discretion of the Contracting Officer, the Index specified above is not appropriate, the

Contracting Officer will consult with the contractor to determine an Index applicable for that

Attachment No. 37 Sol No. FA4814-23-R-0001 work. That index will be specified in the modification and be subject to all terms of this clause if such work lasts longer than two years from the date of modification. Should the parties not agree on an Index, or should the Contractor fail to provide adequate data to establish the price basis from which adjustments should be made, no economic price adjustments will be applicable to new CLIN(s) for that work.

8. Adjustments will be made based on the index update last published as of the 15th day of the third calendar month prior to the beginning date of the option period, or within 1 business day following release if the release date is after the 15th. This date will be referred to as the

Retrieval Date. For example, if the option period begins on 1 May, the 15th day of the third month prior is 15 February, and the 15th would be the Retrieval Date for most months. In this example, the index update used will consist of data through 31 January, but for February the release can be later and would likely be published around 18 February, in which case the

Retrieval Date will be 19 February. This allows approximately 2.5 months for the EPA adjustment to be calculated and the option exercised. The process includes:

a. The designated Index data will be retrieved by the Contractor and provided to the

Contracting Officer, within 2 business days of the Retrieval Date, identifying the adjustment rate for concurrence by the Contracting Officer.

b. The Contractor will present the calculated adjustment to the Contracting Officer for review within 10 business days of the Retrieval Date using a copy of the calculator provided to the Contractor following award. The contractor has one business day to respond to any information requested at any time by the Contracting Officer unless such time is extended by the Contracting Officer.

c. The Contracting Officer will request funds for the adjusted option price.

d. The Contracting Officer will exercise the option.

9. Should DOL not publish data for the index in the Retrieval month specified above, the first prior month for which DOL did publish data will be used.

10. Should disagreement regarding the calculated adjustments occur and is not resolved in sufficient time needed by the Contracting Officer to exercise the option, the Contracting Officer may exercise the option at the contract price, inclusive of any previous adjustments. If agreement is reached afterwards, the Contracting Officer will modify the contract accordingly. If agreement is not reached, the Contracting Officer will modify the adjustment unilaterally into the Contract, based on this clause to which the contractor agrees by proposing on the contract, at the amount calculated by the government, and the contractor has the right to pursue a claim or adjustment via appropriate remedies allowed in FAR as supplemented, as applicable to this contract.

11. The Contracting Officer may examine, or cause to be examined, at any time, the Contractor’s books, records, and other supporting data relevant to the price adjustment during the life of the contract. This right shall remain in effect until the end of three years after the date of final payment of the contract or the time periods specified in Subpart 4.7 of the FAR, as revised or supplemented, whichever is longer.

12. For Illustration purposes only the images below show the cover page title and the location of the index in the example report. The report was downloaded from https://www.bls.gov/web/ppi/ppi_dr.pdf on 18 October 2022. Presently new reports are available at the URL, replacing the previous report without a URL address change. Note that the report title, table numbers, relative location within the report, and URL for the report may be changed by DOL but will not be updated in the contract after solicitation.

(End of Notice)