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Client Alert: FAR acquisition-related thresholds have been increased.

DOD, GSA, and NASA issued a final rule, published July 2, 2015, amending the FAR to adjust acquisition-related thresholds for inflation.  In accordance with the U.S. Code, FAR acquisition-related thresholds must be adjusted for inflation every five years using the Consumer Price Index for all urban consumers.  Nonstatutory FAR acquisition-related thresholds are also amended in this way as a matter of policy.

The final rule, effective October 1, 2015, addresses the following frequently-used thresholds:

  • FAR 2.101. The micro-purchase base threshold of $3,000 is increased to $3,500.
  • FAR 2.101. The simplified acquisition threshold of $150,000 is unchanged.
  • FAR part 5. The FedBizOpps pre-award and post-award notices remain at $25,000 because of trade agreements.
  • FAR 13.500. The threshold for use of simplified acquisition procedures for acquisition of commercial items is raised from $6.5 million to $7 million.
  • FAR 15.403-4. The cost or pricing data threshold and the statutorily equivalent Cost Accounting Standard threshold are raised from $700,000 to $750,000.
  • FAR 19.702. The prime contractor subcontracting plan floor is raised from $650,000 to $700,000, and the construction threshold of $1.5 million stays the same.
  • FAR subpart 4.14 and FAR 52.204-10. The threshold for reporting first-tier subcontract information including executive compensation will increase from $25,000 to $30,000.

In a Final Regulatory Flexibility Analysis (FRFA), DOD, GSA, and NASA explain that the rule was intended to simply adjust for the changing value of the dollar, maintaining the status quo.  However, the agencies concede that the increase of the micro-purchase threshold may temporarily decrease the number of acquisitions automatically reserved for small business concerns.  In addition, the FRFA projects that while the simplified acquisition threshold of $150,000 remains unchanged, it may increase to $200,000 by 2020.  

 

Related Links

Final Rule:

https://federalregister.gov/a/2015-16205

Supplementary Information:

80 Fed. Reg. 38,292–38,314 (July 2, 2015).