Inflation hits GSA Schedules holders: CGP

      Inflation pressures are hurting small businesses with contracts on the General Services Administration’s Multiple-Award Schedule program, although the problems may be temporary.

      The inflation rate rose to 7% in 2021, which economists have said is due to a burst of pandemic stimulus funds overheating the economy and to pandemic-related labor shortages affecting manufacturing and delivery of goods and services. Treasury Secretary Janet Yellen said on Jan. 20 that she expects inflation to fall to 2% by December 2022.

      Meanwhile, the Coalition for Government Procurement recently sounded an alarm about inflation’s effect on small holders of GSA Schedule contracts and suggested GSA ought to be making the issue a priority.

      “GSA’s current framework leaves contracting officers relying on a standard Economic Price Adjustment (EPA) clause with little or no effective guidance supporting the streamlined administration of contractor requests for price increases,” the coalition stated in an unsigned “FAR and Beyond” blog entry on Jan. 28. “There appears to be no sense of urgency in addressing the impact of inflation across the MAS program.”

      “MAS contractors are being put in an untenable position: continue performance at losses of 15-25% or more on individual products, seek other, more flexible channels to support the customer, or simply exit the government space altogether in favor of the private sector that responds more readily to the forces of the market,” the blog entry stated.

More information:
CGP column: https://bit.ly/3raBz6U

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