GSA’s New EPA Clause: What Contractors Need to Know
By Maureen Meyer on August 25, 2025
The General Services Administration (GSA) has issued a new consolidated Economic Price Adjustment (EPA) clause. This clause, GSAR 552.238-120, will take effect with the release of Multiple Award Schedule (MAS) Solicitation Refresh #29 on August 28th, 2025. Intended to simplify and standardize EPA procedures across all Federal Supply Schedule (FSS) contracts, this update will provide GSA Contractors with greater flexibility, improve modification efficiency, and align better with commercial practices.
Background
The new EPA Clause GSAR 552.238-120 was created in response to recent years of market volatility, particularly the COVID-19 pandemic and subsequent inflation surge. Historically, GSA’s MAS program utilized two EPA Clauses, 552.216-70 and I-FSS-969, both of which had their own procedures and limitations. These clauses placed firm restrictions on the frequency and percentage of price adjustments. These limits were designed to prevent abuse; however, they also created challenges for GSA Contractors facing rapid changes in the marketplace.
In 2022, GSA temporarily relaxed these restrictions through Acquisition Letter MV-2202, which allowed for more frequent and flexible adjustments. This measure ensured that Contractors could maintain their GSA offerings, despite rising costs and supply chain disruptions. Over time, GSA made the determination that a permanent change to GSA’s MAS EPA Clauses would streamline EPA modifications, reduce administrative burden, and better serve both Contractors and the Government. This permanent change comes as the introduction of GSAR 552.238-120, and the retirement of clauses 552.216-70 and I-FSS-969 from the MAS Solicitation.
EPA Clause GSAR 552.238-120
The new GSAR 552.238-120 Clause, Economic Price Adjustment—Federal Supply Schedule Contracts, consolidates the two legacy clauses, 552.216-70 and I-FSS-969, into one standardized framework. This streamlining ensures that all FSS contracts will now operate under a single EPA clause. GSAR 552.238-120 clearly defines an EPA “method” as the agreed-upon procedure for pricing adjustments, including timing, frequency, and mechanism. The clause also clarifies which mechanisms are available for Contractors to utilize in their MAS Contract. These mechanisms include adjustments based on fixed escalation rates, market indexes, established pricing, and unforeseen and significant changes in market conditions. In addition to merging the previous EPA clauses into one, GSAR 552.238-120 also allows revisions to the EPA method during contract performance through mutual agreement, offering agility in adapting to evolving market conditions.
The table below breaks down the significant differences between GSAR 552.238-120 and the legacy EPA Clauses.
|
Category |
Legacy EPA Clauses |
New EPA Clause – GSAR 552.238-120 |
|
Number of Clauses |
Two separate clauses: |
One consolidated clause covering all MAS contracts. |
|
Consistency |
Different versions used across contracts, creating variations in process and interpretation. |
A single standardized framework applied to all MAS contracts, eliminating inconsistencies. |
|
Flexibility |
Strict limits on frequency, timing, and percentage of price increases; changes typically fixed at award. |
Greater flexibility to revise the EPA method during performance through mutual agreement; allows responsiveness to market conditions. |
|
EPA Method Definition |
Not uniformly defined; mechanisms varied by clause and contractor proposal. |
Uniform definition of “EPA method” covering adjustment mechanism, scope of pricing subject to change, and requirements (timing, frequency, limits). |
|
Procedural Limits |
Multiple procedural constraints that often slow or restrict adjustments. |
Many procedural limits have been removed (e.g., frequency of EPA requests, caps on percentage increases) to align with commercial standards and practices. |
|
Approval Authority |
Varying levels of approval depending on clause and circumstances; sometimes required higher-level reviews. |
Contracting Officer retains authority to approve, partially approve, reject, or negotiate EPA requests directly. |
|
Exceptions to EPA |
Varied by clause; not always clearly defined. |
Clearly lists exclusions (e.g., statutory changes, Service Contract Labor Standards, Price Reductions Clause, etc.). |
|
Market Data & Review |
Market research requirements varied widely by Contracting Officer; could cause delays. |
Contracting Officer may request supporting data, but has clearer guidelines and authority to determine sufficiency. |
|
Effective Date of Changes |
Could vary depending on clause language. |
Approved changes apply to orders issued on or after modification date; BPAs can be modified accordingly. |
|
Catalog Updates |
Update requirements differed across clauses. |
Explicit requirement to update FSS pricing and catalog data after an approved adjustment. |
For new Offerors, GSAR 552.238-120 will take immediate effect upon award of you MAS Contract. For current MAS Contractors, the Contract’s EPA mechanism will remain in effect until a triggering event occurs, such as an EPA Modification, a Contract Extension, or a modification proposing a new EPA method or mechanism. Until a triggering event occurs, current MAS Contractors will continue to use their current EPA procedures.
Conclusion
The implementation of GSAR 552.238-120 marks a significant transformation of GSA’s EPA process, bringing clarity, consistency, and flexibility to price adjustments under MAS Contracts. Contractors should review their current EPA mechanisms, prepare to transition when a triggering event occurs, and ensure internal processes are ready to operate under the new framework. Staying informed now will help your business take full advantage of the efficiencies this clause is designed to deliver.