GPC V PWS Appendix G (EPA for Scheduled Services).pdf

HTC711-23-R-R001

Appendix G (EPA Scheduled Services)

Economic Price Adjustment (EPA) for Scheduled Services

In order to protect the contractor and government against significant market fluctuations, the unit prices shall be adjusted at the start of Base Period 2 and the extension of every option year thereafter. Allowable adjustments will be made upward or downward if the adjustment varies by more than 0%. The adjustment shall be based on the IHS Markit Pricing and Purchasing Industry Forecasting for North American Industrial Classification System (NAICS) codes as follows: 1. 484122, General Freight Trucking, Long Distance, LTL (40%) 2. 483111, Deep Sea Freight Transportation (60%)

In the event publication of the above index is discontinued, the parties shall agree upon an appropriate substitute index.

1. Index figures subsequently revised by IHS Markit (e.g., amending formerly released indices by removing or replacing components within the index, describing revisions by footnote or appendix, significantly altering the method of calculating the index, or any other method) shall not warrant a retroactive price adjustment under the terms and conditions of the contract.

2. Price adjustments shall be executed via a contract modification.

3. Any price adjustments under this EPA clause shall be rounded to two decimal position (e.g.

$1.79).

4. The formula for determining the adjusted unit prices for the Option Year is – (y2-y1)/y1)*100 = percentage change. A sample calculation that factors in each NAICS is listed below.

5. Carriers may waive an EPA increase that results in higher prices or any part thereof for the entire contract or identified CLIN(s). The adjustment percentage shall apply to all pricing within the identified CLIN(s). Additionally, if the carrier elects to do so, they can offer the Government an additional downward price adjustment (discount), effective at the time of the option exercise, in lieu of an increased EPA option year adjustment. A carrier may not waive a downward EPA adjustment.

6. All EPA adjustment calculations will be based on the current year’s prices in the Schedule and the index calculations described above. A carrier shall not recoup previously waived EPA increases.

HTC711-23-R-R001

Appendix G (EPA Scheduled Services)

Sample Calculation

Mnemonic Weight 2021 Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Trucking General Freight Trucking Long- Distance LTL

PPI4841221.Q.FOS 40% 90.61 95.54 105.50 102.61 102.09 101.12 100.02 99.24

Water Transport

Deep Sea Foreign Transportation Of Freight

PPI483111.Q.FOS 60% 98.88 100.24 115.27 126.04 125.41 122.08 114.80 108.35

Trucking: Average from 2021 Q4 – 2022 Q3

Average from 2022 Q4 - 2023 Q3

New year average - Old year average / Old year average = Percent Change

(90.61+95.54+105.50+102.61)/ 4 = 98.56

(102.09+101.12+100.02+99.2 4)/4 = 100.62

(100.62 – 98.56)/98.56 = 2.09%

Deep Sea: Average from 2021 Q4 – 2022 Q3

Average from 2022 Q4 - 2023 Q3

New year average - Old year average / Old year average = Percent Change

(98.88+100.24+115.27+126.04 )/4 = 110.11

(125.41+122.08+114.80+108.

35)/4 = 117.66

(117.66- 110.11)/110.

11 = 6.86%

Weighting

Calculation:

Trucking Percent Change * 40% + Deep Sea Percent Change * 60%

(2.09% * 40%) + (6.86% * 60%) = 4.95%