SUBJECT 52.216-9059 Economic Price Adjustment (EPA) MEAL COLD WEATHER

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SUBJECT 52.216-9059 Economic Price Adjustment (EPA) MEAL COLD WEATHER Powered By Docstoc
					                                               DEFENSE LOGISTICS AGENCY
                                                          HEADQUARTERS
                                                    8725 JOHN J, KINGMAN ROAD
                                                 FORT BELVOIR, VIRGINIA 22060·6221




IN REPLY
     KEl'li" TO   J-7                                                                              NOV 0 ' .
                  PROCLTR 09-52


                  MEMORANDUM FOR PROCLTR DISTRIBUTION LIST

                  SUBJECT: 52.216-9059 Economic Price Adjustment (EPA) MEAL COLD WEATHER
                           LONG RANGE PATROL


                       The purpose ofthis PROCLTR is to implement one Subsistence Supply Chain EPA
                  Clause for the 30 items included in the MEAL COLD WEATHERlLONG RANGE PATROL.
                  Tlus Defense Logistics Acquisition Directive (DLAD) EPA clause is based on established
                  market prices in accordance with Federal Acquisition Regulation 16.203-1(a)(1) and DLAD
                  16.203- l(a)(90) as reflected in publications such as United States Depatiment of Agriculture,
                  and Wall Street Journal referenced. The contracting officer, in accOrdatlCe with DLAD
                  16.203-4-90, determined that there are no existing EPA clauses that will adequately reflect
                  current chicken, beef, eggs, turkey, cocoa and other market prices shown.

                      This DLAD EPA clause replaces the fill in the blank methodology that Defense Supply
                  Center Philadelphia (DSCP) had been using under Site Clause Number 52.2l6-9PI7, which
                  was deleted on PROCLTR 09-07 dated February 9, 2009. This new EPA clause is based on
                  specific economic indicators that are identified in advance, can be verified to established
                  publications that are updated on either a weekly or monthly basis, and therefore is all
                  acceptable methodology,

                       The contracting officer may add additional components based upon customer
                  requirements witlun paragraph (b) of the clause. Prior to incorporation of any additional
                  components into a solicitation or contract, the contracting officer shall provide the requested
                  new components along with supp01iing documentation to the cost/price analyst for review and
                  approval. DSCP will keep track of any items added and/or those items should be deleted from
                  the clause and rep01i to Headquarters, Defense Logistics Agency, ATTN: J-73, every
                  2 years for review and updating of the clause as necessary,
                                                                                      2


    Tins PROCLTR is effective immediately and expil"es upon incorporation of this
coverage in the DLAD. The point of contact is Stephen Larson, J- 73, Redacted !!! ,
Redacted !!!    , or email: Redacted !!!




                                    1lONt~M< l
                                        NANCY M. HEIMBAUGH
                                        Component Acquisition Executive

Attachment:
EPA Clause Meal Cold Weather Long Range Patrol
                                                                                               3

16.203-4-90 Additional Clauses

*****
16.203-l(a)(90) & 16.203-4-90: The clause at 52.216-9059 may be used in solicitations and
resulting contracts for Meal Cold WeatherlLong Range Patrol (MCW/LRP). The contracting
officer may add additional components based upon customer requirements within paragraph
(b) of the clause. Prior to incorporation of any additional component(s) into a solicitation or
contract, the contracting officer shall provide the requested new components along with
supporting documentation to the cost/price office for review and approval. DSCP will keep
track of any items added and/or those that should be deleted from the clause and report to HQ
DLA, ATTN: J-73 every two years for review and updating of the clause as necessary.



52.216-9059 ECONOMIC PRICE ADJUSTMENT - MEAL COLD
WEATHER/LONG RANGE PATROL (MCWILRP) (OCT 2009) DLAD


As prescribed at FAR 16.203(a)(l), and DLAD 16.203-1(a)(90) & 16.203-4-90, insert the
following clause:


ECONOMIC PRICE ADJUSTMENT - MEAL COLD WEATHERILONG RANGE
PATROL (MCWILRP) - DLAD


(a) WARRANTIES: For the pottion of the schedule that is covered by this EPA clause, the
Contractor warrants that the unit prices included in the Schedule does not include allowances
for any portion of the contingency covered by this clause. Refer to clause DLAD 52.217-
9001, OPTION TO EXTEND THE TERM OF THE CONTRACT - SEPARATE FIRM
FIXED PRICE & FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT PORTIONS,
contained elsewhere in this solicitation.

(b) The base unit prices for the purpose of the adjustment calculations under this clause shall
be the arithmetic average of the weekly or monthly prices of each applicable economic
indicator only (e.g. an average of beef indices for beef products, an average of poultly indices
for poultry products, etc.) for the period specified under the "Base Unit Price" below
immediately preceding either the solicitation closing date for proposals (if no discussions are
held), the due date for final proposal revisions (if discussions are held) 01' the solicitation
opening date (if sealed bidding is used).
                                                                                                                                                                              4


                                                                                                             PUBLISHER/
                                                         EPA                                                 PUBLICATION                     BASE                     ADJ.
                                                      FACTOR!                    ECONOMIC                    /FREQUENCY                       UNIT                    UNIT
         ITEM                   MEl\'U              COl\JPOl\'ENT                INDICATOR                    PUBLISHED                      PRICE                   PRICE
,;, ;;                 .;,\,'i2"                            ;;4;;;;'1     'j" ,.;;J,;;YZ;S /; O;;';;S I:..                 'if';;;                  ;.•.....   h;; ;';':;'
      Chicken                      #1                Spicy Oriental              Breasts, BIS,               USDA/USDA                        52                      52
                                                    Chicken wI Rice              Georgia, FOB                Broiler Market                  Week                    Week
                                                                                  Dock, Wtd.                 News Report 13                  period                  period
                                                                                  Avg. Price                   XPerWk
                                   #5               Chicken & Rice               Breasts, BIS,               USDA/USDA                        52                       52
                                                                                 Georgia, FOB                Broiler Market                  Week                    Week
                                                                                  Dock, Wid.                 News Report 13                  period                  period
                                                                                  Avg. Price                   X Per Wk
                                   #9                   Rice and                 Breasts, BIS,               USDA/USDA                        52                      52
                                                        Chicken,                 Georgia, FOB                Broiler Market                  Week                    Week
                                                        Mexican                   Dock, Wtd.                 News Report 13                  period                  period
                                                                                   Avg.Price                   XPcrWk
                                   #3               Soup, Noodle,                 Flour, hard                  WSJ /WSJ                       52                       52
                                                    Ramen, hlslanl,              winter Kansas               Conmlodity Cash                 Week                    Week
                                                     Fried Noodle,                 City cv.1                  Prices I Daily                 period                  period

I·;       ", ;;;'.';     ;       ;";.';
                                                           CUP
                                                                                      '.;;,.        I oj'; '..; >;;<":c,..,. ;.;.     ";'.
                                                                                                                                                                 ,            ".

          Beef                     #2               Beef Stroganoff               IMPS 167A                  USDA / Weekly                    52                       52
                                                     wI Noodle-s                    Round,                    Nation Carlot                  Week                    Week
                                                                                   Knuckle,                   Meat Report I                  period                  period
                                                                                   Trimmed,                      Weekly
                                                                                   Wtd,Avg.
                                                                                  (BPN U-12)
                                   #3                Chili Macaroni                 Boneless                 USDA / Weekly                     52                      52
                                                                                   Processing                 Nation Carlot                  Week                    Week
                                                                                   BeeflBeef                  Meat Report I                  period                  period
                                                                                  Trimmings,                     Weekly
                                                                                 FOB National,
                                                                                   Wtd. Avg.
                                                                                  85% fr (BPN
                                                                                    U-24)
                                   #7                  Beef Stew                  IMPS 167A                  USDA / Weekly                     52                      52
                                                                                    Round,                    Nation Carlot                  Week                    Week
                                                                                   Knuckle,                   Meat Report I                  period                  period
                                                                                   Trimmed,                     Weekly
                                                                                   Wtd,Avg.
                                                                                  (BPN U-Il)
                                   #8                 Spaghetti wI                Flour, hard                  WSJ / WSJ                       52                      52
                                                      Meat Sauce                 winter Kansas               Conmlodity Cash                 Week                    Week
                                                                                   Cityc,,1                   Prices I Daily                 period                  period
                                   #3               Soup, Noodle,                 Flour, hard                  WSJ/WSJ                         52                      52
                                                    Ramen, Instant,              winter Kansas               Commodity Cash                  Week                    Week
                                                     Fried Noodle,                 City C\\1                  Prices I Daily                 period                  period
                                                           Cup
  ''5. i .;i''               ·.,···.• ·.·;·,;;i; l'l,<V' .;i,i;,/_;';''5,... 1'/'5.,;·;··i';·;./·      i"     '.<               ;    ......... ,                 '   ....
        Pork                           #10            Scrambled Eggs                 National                 USDA/USDA                        52                      52
                                                          wI cheese,                  Liquid,                  Egg Market                    Week                    Week
                                                        Western style              Whole, WId.                Ncws/2XPer                     period                  period
                                                       (l)1'e 1lI- Ham                  Avg                         Wk
                                                            dices)
                                       #11            Scrambled Eggs                 National                 USDA/USDA                        52                      52
                                                       wI Bacon (type                 Liquid,                  Egg Market                    Week                    Week
                                                      II-Bacon pieces)             Whole, Wtd.                News 12 X Per                  period                  period
                                                                                        Avg                      Wk
                                       #12            Scrambled Eggs                 National                 USDA/USDA                        52                      52
                                                          wI cheese,                  Liquid,                  Egg Market                    Week                    Week
                                                        Western style              Whole, Wtd.                News/2 X Per                   pcriod                  period
                                                       (type Ill- Ham                   Avg                         Wk
                                                            dices)
                                                                                                                                                                                             5
 .",,;'''.;''                         iii,                               ;',,'        1'3'        ·i";i·.ii.,;· i;;'!i,;ii.·;':                       ,'};.               .··i    ...
       Turkey                         #4                       Turkey                              Turkey            USDA/USDA                                 52                    52
                                                              Tctrazzini                        Breasts, B/S,                 Turkey Market                 Week                   Week
                                                                                                     Tom                      News Report 13                period                 period


                                                                                                                                              • .
                                                                                                                                 XPerWk
I··X···..• ···.·>·;··.:;'.;   (i';;i;.iii                                             R·,·               ,'' .;,.'' ' i,"f.    .i;.                        :;",;                  .;;

             Eggs                     #10                 Scrambled Eggs                         National                     USDA/USDA                        52                    52
                                                            wI cheese,                           Liquid,                        Egg Market                  Week                   Week
                                                            Westcm style                        Whole, WId.                   News /2 X Pcr                 period                 period
                                                                                                   Avg                              IVk
                                     #11                  Scrambled Eggs                         National                     USDA/USDA                        52                    52
                                                               wI Bacon                          Liquid,                        Egg Market                   Week                  Week
                                                                                                Whole, Wid.                    News 12 X Pcr                period                 period
                                                                                                     Avg                         Wk
                                     #12                  Scrambled Eggs                         National                     USDA/USDA                       52                    52
                                                             wI cheese,                          Liquid,                        Egg Market                   Week                  Week
                                                           Westem style                         Whole, Wid.                    News 12 X Pcr                period                 period
                                                                                                     Avg
     ·i;·
            Cheese                    #3                   Cbeese spread
                                                                                                      " ... '
                                                                                                 Cheese
                                                                                                                    '~V;i
                                                                                                                                    Wk

                                                                                                                              USDA / Federal
                                                                                                                                                               .....,," c ' ; •..•• ;
                                                                                                                                                                12            12
                                                                                               Avcrage Price                  Milk Order Price              Month                 Month
                                                                                                Per Pound                     Announcements I               period                period
                                                                                                  (Class 111)                     Monthly
                                      #4                   Cheese spread                          Cheese                       USDA/USDA                           12                12
                                                                                               Avcrage Price                   Federal Milk                Months                 Month
                                                                                                Pcr Pound                       Order Price                period                 period
                                                                                                 (Class 111)                  Announcements I
                                                                                                                                 Monthly
                                     #10                  Scrambled Eggs                          National                     USDA/USDA                       52                    52
                                                             wI cheese,                           Liquid,                       Egg Market                  Week                   Week
                                                           Western style                        Whole, W.d.                    News 12 X Per                period                 pcriod
                                                                                                   Avg                            Wk
                                     #12                  Scrambled Eggs                          National                     USDA/USDA                       52                    52
                                                             wI cheese,                           Liquid,                       Egg Market                  Week                   Week
                                                           Wcstem style                         111101e, W,d.                  News 12 X Per                period                 period

                                                                           .;.
                                                                                                     Avg
                                                                                                   ~;, :i
                                                                                                                                    Wk
                                                                                                                               .'.'.>.1,./, "i            ......              ;      .....
            Non-Fat               #1 &#12                     Dairyshake                         Base Skim                    USDA/USDA,                       12                    12
            Dry Milk                                                                                 Milk                       AMS, Dairy                  Month                 Month
             Powder                                                                            Price for Class                  Programs I                  period                period
                                                                                                1 time 0.965                     Monthly
                                                                                                     plus
                                                                                                 Advanced
                                                                                                  Butterfat
                                                                                               Pricing Factor
                                                                                                  times 3.5
                                     #10                  Cocoa beverage                        Cocoa, Ivory                    IVSJ /IVSJ                     52                    52
                                                             powder                             Coast, S per                  Commodity Cash                Week                   Week
                                                                                                 metric ton                    Prices I Dail '              period                 period
                                     #11                  Cocoa beverage                        Cocoa, Ivory                     WSJ /WSJ                      52                    52
                                                             powder                             Coast, $ per                  Commodity Cash                Week                   Week
                                                                                                 metric ton                    Prices I Daily               period                 period
                                      #2                 Chocolate Sports                       Cocoa, Ivory                    WSJ /IVSJ                      52                    52
                                                              Bar                               Coast, S per                  Commodity Cash                Week                   Week
                                                                                                 metric ton                    Prices I Dail '              period                 period
 ;     .;>.                       . "",.;;. ,is r.·. .                    "':",; I·'.··..· .•. ;".. '.··· I"';                          >;' .'.'., 1"'<                 it Ii··.· ;;';i';
                                      All                     Non-Dairy                           Soybean oil,                   WSJ /WSJ                      52                    52
                                  Accessory                    Creamer                           crude; Central               Commodity Cash                Week                   Week
                                   Packets                                                          Illinois lb.               Prices I Dail '              period                 period
       ..······:;E';                              '•. ,,', .•; "'.l" '.' .'i. ',,' '.; ,.   .',,"- ~'''':'                    .;.;."                  ""i,;i.·,·,             ......
            Peanut                    #3                 Chocolate Peanut                            Virginia                 USDA I National              52                        52
            Butter 1                                       Pan Coated                                 Peanuts                    Agriculture                Week                   Week
            Peanuts                                           Disks                              Average Price                   Statistical                period                 period
                                                                                                    per pound                 S.udies (NASS)
                                                                                                                               Peanut Price-s I
                                                                                                         6
                                                                   Weekly
                  #2&#6       Nut & Fmit Mix      Virginia      USDA I National       52         52
                                                  Peanuts         Agriculture        Week      Week
                                                Avcrage Price      Statistical       period    period
                                                 per pound      Studies (NASS)
                                                                 Peanut Prices I
                                                                    Weekly
                    #8       Chocolate Peanut     Virginia      USDA I National       52        52
                                  Spread          Peanuts         Agriculture        Week      Week
                                                AYerage Price      Statistical       period    period
                                                 per pound      Shldies (NASS)
                                                                 Peanut Prices I
                                                                    Weekly

    Packaging                   Linerboard       Linerboard     Miller Freeman,      Semi-     Semi-
    Materials                                      (42-lb)       Inc.! Pulp &        anllual   annllal
                                                 Unbleached      Paper Week I
                                                 Kraft, East,   WeeklylPrices
                                                  Sil. TOll,     are Published
                                                Semi-Annual         Monthly

    Packaging                     Resins        LDPE Resins,    Chemical Data I        12       12
    Materials                                   Large Buyer         Monthly          month     month
                                                 Price Film     Petrochemical &      period    period
                                                Liner Grade     Plastic Analysis I
                                                                    Monthly


In addition to the components shown above, the following are also included

                                                                 PUBLlSIlER I
                                  EPA                           PUBLICAnON           BASE      ADJ.
                                FACTOR!         ECONOMIC        I ~'REQUENCY         UNIT       UNIT
     ITEM        MEl\ru       COMPONENT         INDICATOR         PUBLISHED          PRICE     PRICE


                               (To be completed as required)

(c) The adjusting unit prices shall be the arithmetic average of the weekly or monthly prices
of each applicable economic indicator only for the period specified under the "Adjusting Unit
Price" column shown in paragraph (b) iImnediately preceding the effective date the option
term is exercised.

(d) An established market price is a price that is established in the course of ordinary and
usual trade between buyers and sellers free to bargain and that can be substantiated by data
from sources independent of the offeror(s); and the net price after applying auy standard trade
discounts offered by the Contractor. The established market price under this clause may
reflect industry-wide and/or geographically based market price fluctuations for commodity
groups or specific supplies. The established market price that shall be used for the EPA
factors subject to price adjustments under this clause, and the economic indicators and
publications to be used are listed in paragraph (b) of this clause.

(I) The base unit prices for the purpose of the adjustment calculations under this clause shall
be the arithmetic average of the weekly or monthly prices of each applicable economic
indicator only for the period specified under the "Base Unit Price" colunm in paragraph (b)
immediately preceding (i) the closing date for proposals, if no discussions are held, (ii) the
                                                                                                  7

due date for fmal proposal revisions, if discussions are held, or (iii) the opening date, if sealed
bidding is used.

(2) The adjusting unit prices shall be the arithmetic average of the weekly or monthly prices
of each applicable economic indicator for the period specified under the Adjusting Unit Price
column in paragraph (b) immediately preceding the effective date the option term is exercised,
except for linerboard which shall require one additional adjustment six months after each
option term is exercised.

(e) With respect to increases or decreases under tllis clause, no adjustment shall be made to
the base term contract unit prices. One adjustment calculation shall be made annually to
determine the unit prices applicable to the fOlihcoming option term (if exercised), except
linerboard which will be adjusted on a semi-annual basis.

(f) EPA ALLOWANCE FACTOR: For the purpose of price adjustment pursuant to this
clause, it shall be conclusively presumed that the amount shown under "Portion Subject to
EPA" represents the cost of each item that is subject to adjustment. The portion subject to
EPA refers to the element of cost for each item that is outside the control of the vendor and in
"Schedule B" the offerors will be required to fill in this amount. This is the only portion of
the cost that will be subject to the EPA provision. The EPA provisions based on changes in
market prices for product material costs such as chicken, beef, turkey, eggs, cheese, dry milk
powder, and peanuts are subject to the EPA, because there is serious doubt concerning the
stability of market conditions. The balance of product costs for items such as labor, overhead,
General and Administrative (G&A), transportation, and profit are those contingencies that can
be included in the contract price and can be identified and covered separately through firm
fixed prices. The EPA allowance factor remains fixed throughout the life ofthe contract
unless a Government authorized change is made to the contract which affects this allowance.

(g) PERFORMANCE REQUIREMENT: The United States Army Research, Development
and Engineering Command (RDECOM) Natick Soldier Center (NSC) who prepares the
specifications has moved from Militmy Specifications to Performance Requirements. The
Government no longer states the specific amount of product (meat, flour, cheese, eggs, etc.)
that goes into a Meal Cold Weather/Long Range Patrol (MCW/LRP), only an overall amount
with a protein and carbohydrate requirement. Meeting the protein requirement indicates that
the contractor has put in sufficient (meat) quantities in the MCWILRP to satisfy the
requirement. (Different contractors will put in differing quantities of chicken, beef, turkey,
eggs, cheese, etc. to meet the protein performance requirements). This is why specific
weights or quantities cannot be specified in advance in this EPA as would be used in a
Military Specification and the cost for the items subject to adjustment will be entered by the
contractor in Section B. The Government performs oversight to ensure that the performance
requirements are met or exceeded.

(h) Adjustments shall be calculated as follows: (Round to four decimal places)
                                                                                                       8

(I) Compute the Adjusting Unit Price and the Base Unit Price.

(2) (Adjusting Unit Price - Base Unit Price)/Base Unit Price = Market Price Change (+ 01'        -).


(3) Market Price Change X Allowance Factor = Contract Unit Price Adjustment (+ or -) for
each item subject to EPA adjustment.

(4) The original option unit price(s) for each option will be the sum of the finn fixed price
pOltion and the pOltion subject to the EPA (Allowance Factor). The adjusted unit price(s) for
each option shall be determined by increasing or decreasing (as appropriate) the Allowance
Factor by the Contract Unit Price Adjustment and adding that to the firm fixed price pOltion
agreed to at the time of award for the option period being adjusted.

(5) Determine the Contract Price Adjustment by computing the sum total of the price
adjustment of all items subject to EPA.

(i) Price adjustments pursuant to this clause shall be made by contract modification showing
the calculations used to derive the adjusted contract unit price.

G) PAYMENTS: Payment for items pending adjustment under this clause shall be at the
existing unadjusted current unit price until an adjustment modification has been issued.
Following issuance of an adjusting contract modification, the Government shall pay the
Contractor, upon submission of proper invoices or vouchers, the adjusted price stated in the
contract modification for the applicable option period. The contractor represents by
submitting its final invoice that the total amount billed under tlllS contract reflects all increases
or decreases required or authorized by tills clause.

(k) Any pricing actions pursuant to the "CHANGES" clause or other provisions ofthe
contract will be priced as though there were no provisions for economic price adjustment.

(I) No adjustment will be made under this clause unless the total change in the contract
amount is $500.00 or more.

(m) UPWARD CEILING ON ECONOMIC PRICE ADJUSTMENT: The total increase
in any contract unit price shall not exceed 10% per annum of the original option unit prices
agreed to at time of award. There is no percentage limit on downward adjustments under this
clause.

(n) REVISION OF MARKET PRICE INDICATOR: In the event (i) any applicable
market price indicator is discontinued or its method of derivation is altered substantially or (ii)
the Contracting Officer determines that a pmticular market price indicator consistently mld
substantially no longer reflects market conditions, tile parties shall mutually agree upon an
appropriate and comparable substitute and the contract shall be modified to reflect such
                                                                                                  9

substitute effective on the date the indicator was discontinued, altered, or began to
consistently and substantially fail to reflect market conditions.

(0) DISPUTES: If the parties fail to agree on an appropriate substitute market price indicator
or implementation of other matters addressed by this EPA clause then the matter shall be
resolved in accordance with the DISPUTES clause ofthe contract.

(P) AUTHORITY TO ADD ADDITIONAL ITEMS TO THIS CLAUSE: Paragraph (b)
of this clause identifies 30 unique components contained in the MCWILRP. These
components are selected based on historical data and may not be included in every ration.
Refer elsewhere in the solicitation/contract for listing of the exact component makeup. Due to
customer requirements, the contracting officer may add additional components to the ration.
The contracting officer will show within paragraph (b) the additional components(s).

(q) EXAMINATION OF RECORDS: The Contractor agrees that the Contracting Officer
or designated representative shall have the right to examine the Contractor's books, records,
documents, or other data the Contracting Officer deems necessary to verify Contractor
adherence to the provisions of the clause.

(r) In the event any applicable market price indicator is not published for any week(s), that
week will not be included in calculating the base unit price or the adjusting unit price as
applicable. For instance, if within a 52 week period an indicator is not published 4 times, the
average of the 48 published prices only will be calculated. When a range of prices is
provided, for the purposes of the calculations the arithmetic average of the high and low
number will be calculated to determine the indicator for that period.

                                         (End of Clause)

				
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