16.203-4 Contract clauses.

(90)  When the contracting officer determines that no existing EPA clause (including a FAR clause used in conjunction with the corresponding FAR EPA "Implementation" DLAD clause (see (a)(1)(90), (b)(1)(90) and (c)(1)(90) below) is appropriate, the contracting officer may develop an alternate to an existing EPA clause, or a new clause, in accordance with 16.203-1(a)(90) or (c)(90)and will submit it for approval in accordance with 1.301-91. Established prices and cost indexes need not reflect changes in the costs or established prices of a specific contractor. The established price or cost index may be derived from sales prices in the marketplace, quotes, or assessments as reported or made available in a consistent manner in a publication, electronic database, or other form, by an independent trade association, Governmental body, or other third party independent of the contractor. More than one established price or cost index may be combined in a formula for economic price adjustment purposes in the absence of an appropriate single price or cost index upon approval pursuant to 16.203-3(91). (DAR Tracking Number 95-D0003, FARS DEV 96-10).

(91)  Adjustments based on established market prices or indexes (see also (d.) below).

(i)  The contracting officer shall determine the most appropriate international, national, regional, or local area market. The EPA clause included in the solicitation shall identify the index or established market price, the document containing such index or price, and its effective date or period.

(ii)  If the contracting officer is unable to identify an established market price or index that satisfactorily reflects economic fluctuations, then the EPA provision included in the solicitation may provide for offeror fill-in to recommend the most appropriate established market price or index (if none, the most appropriate established catalog price), along with the document containing the established price or index and the effective date/period of the established price or index (and, for established catalog price EPA clauses, the identification and amount of any applicable extras, discounts, or rebates used in calculating the contract price). The contracting officer shall select the most appropriate established market price or index identified (if none, the most appropriate established catalog price). The contracting officer may amend the request for proposal (RFP) to include this selection.

(iii)  In addition, when preparing a new, locally developed EPA clause or a revision to an existing clause involving using an established or published market price clause, include the provision at (d)(iv)(90), after substituting the phrase "market price" indicator for the five occurrences of the word "index".

(iv)  The clause at 52.216-9003 may be included in solicitations and resulting contracts for items containing specialty metals, when there is potential for unpredictable increases or decreases in the cost of the specialty metal, and the changes can be tracked by a published market price indicator (e.g. London Metals Exchange, Platts). Cost or price indices that are subject to recalculation after initial publication (to take into account late survey reports and corrections by respondents e.g. PPI) shall not be used with this clause. Clause requires contractor submission of information adequate to support derivation of the dollar value of specialty metal(s) in the unit price.

(92)  Adjustments based on established catalog prices. An established catalog price-type EPA clause (FAR 52.216-2 or -3, DFARS 252.216-7000 or -7001) may be included in solicitations and resulting contracts for an item previously bought without such EPA clause only after the contracting officer determines that neither an index-type or an established market priced EPA is suitable (i.e., the requirements of FAR 16.203-4(d) and DFARS 216.203-4(d) are not met or there is no suitable index or established market price describing the supplies with specificity) and documents in the acquisition plan the results of actions taken in reaching this determination.

(a)  Adjustments based on established prices--standard supplies.

(1)

(90)  The clause at 52.216-9000 (or substantially the same clause) may be used with FAR clause 52.216-2.

(91)  Fresh Fruits and Vegetables under the DLA Troop Support ( formerly DSCP ) Subsistence Supply Chain is authorized to use a FAR Deviation for Long Term Contracts. The Deviation is provided at FAR 52.216 52.216-9039

(i)  The clause at 52.216-9011, Economic Price Adjustment - DoD Electronic Mall (EMALL) may be included in long-term contracts to be loaded into the DoD Electronic Mall (EMALL).

(b)  Adjustments based on established prices--semistandard supplies.

(1)(90)  The clause at 52.216-9001 (or substantially the same clause) may be used with FAR clause 52.216-3.

(c)  Adjustments based on actual cost of labor or material.

(93)  An actual cost type EPA clause (FAR 52.216-4 or a locally-developed clause) may be included in solicitations and resulting contracts for an item previously bought without such an EPA clause only after the contracting officer determines that no other type of EPA clause is appropriate and documents in the acquisition plan the results of actions taken in reaching this determination. A provision shall also be included in the solicitation and any resulting contracts that--

(i)  Identifies the specific direct cost factor and dollar amount needed to establish the baseline from which adjustments will be made, regardless of whether cost or pricing data was submitted;

(ii)  Incorporates by reference, the cost principles and procedures in FAR Subpart 31.2 for use as the basis for pricing the baseline and any adjustment under the EPA clause;

(iii)  Identifies any appropriate markup factors/amounts; and

(iv)  Provides the methodology for price adjustment calculations.

(1)(90)  The clause at 52.216-9002 (or substantially the same clause) may be used with FAR clause 52.216-4.

(3)(90)  When the FAR "Implementation" DLAD clause is also used (along with the note specified at 15.204-2(b)(91)), the contracting officer shall include the required information in such clause vice the contract Schedule.

(4)(iii)(90)  When the FAR "Implementation" DLAD clause is also used (along with the note specified at 15.204-2(b)(91)), the contracting officer shall include the required information in such clause vice the contract Schedule.

(2)  The clause at 52.216-9012 may be included in solicitations and resulting contracts for Unitized Group Rations - A (UGR-A) when the requirements of FAR 16.203-2 are met and the determination required by FAR 16.203-3 is made. The clause is based on cost of materials (total components price defined below). There is no adjustment for the distribution price (defined below) for these rations. If the Contractor's applicable total components price of a ration component(s) changes (i.e. increase or decrease) after the contract date, the corresponding unit price may be increased, or shall be decreased, by the same amount (subject to upward ceiling discussed below). Clause requires contractor submission of supporting data adequate to support any requested price change.

(d)  Adjustments based on cost indexes of labor or material. An index clause may be included in solicitations and resulting contracts only if the contracting officer documents in the acquisition plan, rationale indicating that the acquisition satisfies the requirements of FAR 16.203-4(d) and DFARS 216.203-4(d). The contracting officer shall select the most appropriate index published by the Bureau of Labor Statistics (BLS). Another index may be used provided the contracting officer determines that no BLS index is suitable and documents in the acquisition plan the specific BLS indexes considered, why they were unsuitable, and rationale demonstrating the suitablility of the index selected.

(d)(iv)(90)  "In the event-

(i)  Any applicable index is discontinued or its method of derivation is altered substantially; or

(ii)  The contracting officer determines that the index consistently and substantially fails to reflect market conditions-

the parties shall agree upon an appropriate substitute index for determining price adjustments hereunder. The contract shall be modified to reflect such substitute index, effective on the date the index specified in the contract is no longer published or began to consistently and substantially fail to reflect market conditions."

(d)(v)(90)  When planning to use an index-type clause which provides for price adjustment, whenever the actual index for a period differs from the projected index for that period sufficiently to trigger a price adjustment, the contracting officer shall ensure that the projected index for each period to be included in the clause at least equals the projected indexes used in pricing the same cost element under the contract.