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    While doing price analysis in the present hyper inflationary times, if vendors submit requests for EPA mods for any %s, and if the proposed adjustments are higher than the indexes (Global Insight, IHS, etc.), how do we proceed? Are these hyperinflationary conditions being addressed in the revised DAU Cost/Price classes?


    This response is based on the information provided.  We suggest you discuss with your contracting team, program manager and/or legal department as appropriate. 


    You need to address a few issues in this situation.  First, if a vendor is requesting an Economic Price Adjustment (EPA) based on the effects of inflation, was the contract created/established as a "Fixed-price contract with economic price adjustment See FAR 16.203)?  If your contract is FP-EPA, then any adjustment will be negotiated per the pre-established terms of the contract.  If the contract is FFP, then no adjustments should be allowed unless the vendor/contractor is offering reasonable consideration.  DPC Policy letter entitled, "Managing the Effects of Inflation with Existing Contracts" dated September 9, 2022 (in signature block) addresses possible actions regarding adjustments requested driven by inflation.


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