If a company holds a GSA Consolidated Multiple Award Schedule that includes hardware/product pricing, if the US Government imposes Tariffs what grounds does the company have to get equitable adjustment or add in a Tariff Surcharge on a pass through basis? Is the EPA Clause 552.216-70 the best way to argue it? Other? If I get an unsolicited order via GSA eBuy can we reject it?

Have you checked your GSA schedule contract? Is FAR clause 52.229-3 in your contract?

I found this AI overview: “For federal contractors, the FAR clause related to tariffs is FAR 52.229-3 (Federal, State, and Local Taxes), which allows for equitable adjustments to contract prices when new or increased federal excise taxes or duties (like tariffs) are imposed after contract award, provided the contractor notifies the contracting officer promptly and the costs weren't already factored in.”

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FAR 52.229-3 isn't in the agreement. GSAR 552.229-70 is and it does not address price adjustments when new or increased federal excise taxes or duties (including tariffs) are imposed after contract award. thanks for the link to the Article

 

Well, let’s see. A Tariff is a “duty”, not a tax. So, the GSAR clause only addresses “taxes” being inclusive in the contract prices.

The GSAR clause is for contracts expected to exceed the micro purchase threshold but not the simplified acquisition threshold:

“529.470 Domestic contract clauses.

(a)Insert the clause at 552.229-70, Federal, State, and Local Taxes, in solicitations and contracts estimated to exceed the micro-purchase threshold, but not the simplified acquisition threshold.“

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Does your contract allow and involve acquisition of non-domestic supplies or materials?

FAR 52.249-8

Why not try discussing this with GSA?

On 4/4/2025 at 11:56 AM, RogerW said:

If a company holds a GSA Consolidated Multiple Award Schedule that includes hardware/product pricing, if the US Government imposes Tariffs what grounds does the company have to get equitable adjustment or add in a Tariff Surcharge on a pass through basis? Is the EPA Clause 552.216-70 the best way to argue it?

With no specific experience my thoughts...

552.216-70 sets no limitation as to what constitutes a EPA increase/decrease. Or in other words "only for" is NOT stated in the clause so the door is wide open it would seem so if me I would attempt the request per the clause if in the parent GSA MAS contract.

On 4/4/2025 at 11:56 AM, RogerW said:

If I get an unsolicited order via GSA eBuy can we reject it?

Is clause 552.238-78 in the parent GSA MAS? You might want to read it.

Joel's suggestion to contact GSA is a good one as well.

I started to post similar information but saw this first. https://gormgroup.com/2025/04/04/white-house-announces-additional-tariffs-what-this-means-for-your-gsa-schedule-april-2025/

Talk with your GSA CO. You’ll need to show proof that your commercial price increased as a result of tariffs. Your GSA pricing is based upon your commercial published pricing. So show GSA what your new prices are with a revised price list, give them proof that you sold at the new prices such as paid invoices, and submit a request to modify the contract pursuant to the EPA clause.

On 4/6/2025 at 7:20 AM, joel hoffman said:

Well, let’s see. A Tariff is a “duty”, not a tax. So, the GSAR clause only addresses “taxes” being inclusive in the contract prices.

What legal authority are you using to distinguish "tariff" or "duty" from "tax"?

I just saw this article https://gormgroup.com/2025/04/04/white-house-announces-additional-tariffs-what-this-means-for-your-gsa-schedule-april-2025/ It’s consistent with what I said earlier. The article is from a company headed by Bill Gormley, who was former Assistant Commissioner of Acquisition at GSA and had a big impact of the current MAS program.

58 minutes ago, MBrown said:

What legal authority are you using to distinguish "tariff" or "duty" from "tax"?

@MBown What’s your point?

Tariffs and duties are commonly interchangeable terms.You can do a simple search to find that.

The 52.229-3 clause discusses increased or after imposed excise taxes and duties as eligible for a price adjustment. Not every type of tax is eligible for price adjustments either.

The GSAR clause says that the contract prices “include all applicable Federal, State, and local taxes”

And “No adjustment will be made to cover taxes which may subsequently be imposed on this transaction or changes in the rates of currently applicable taxes.”

Whether or not a tariff is a duty or a tax, the GSAR clause at 552-229-70 doesn’t provide for a price adjustment for changes in rates or after imposed taxes nor does it mention duties or tariffs.

Edit: Some other mechanism in GSA schedule contracts may provide an adjustment for tax increases or imposed/increased duties such as tariffs. I don’t know. I was only addressing the aforementioned FAR and GSARS clauses.

Edited April 8Apr 8 by joel hoffman

Is there any authoritative guidance on whether or not President Trump's tariffs or any portion thereof are compensable under a government contract due to increased production costs? Normally, in a fixed price contract, the burden is on the contractor to meet the government's needs at the stated price. However, some contractors are insisting that they be compensated before they will agree to enter into new contracts. With so many mergers and acquisitions in so many fields, this can leave the government with few choices for certain products or services. If anyone knows of any authoritative guidance coming out of the Department of Transportation or elsewhere, it would be most appreciated.

No, and I wouldn't expect more than "read your contract." If the contract includes FAR 52.229-3, Federal, State, and Local Taxes, then the contractor could be compensated for an after-imposed federal tax. This includes duties (a tariff is a type of duty).

Here's a good analysis: https://www.insidegovernmentcontracts.com/2025/03/the-trump-tariffs-and-federal-contractors-in-these-taxing-times-contractors-have-a-duty-to-know-these-five-things/

10 hours ago, Don Mansfield said:

If the contract includes FAR 52.229-3, Federal, State, and Local Taxes, then the contractor could be compensated for an after-imposed federal tax. This includes duties (a tariff is a type of duty).

I’d be careful about equating “tariffs” and “duties” with “taxes”.

The 52.229-3 clause refers to “tax(es) and dut(ies)” and “taxes or duties”, both in the singular and plural senses. They are distinctly addressed in the clause.

Yes, I agree with Don that this clause may* allow an adjustment (up or down) for after award changes to or imposed duties, as stated in multiple posts.

And yes, I agree with Don that a tariff is a type of duty, as stated in multiple posts and in numerous references.

*The 52.229-3 clause excepts or limits such adjustments where and to the extent that the contract price already includes contingencies for increases in excise taxes or duties.