FAR Dollar Thresholds Will Significantly Increase Effective October 1, 2010

Today, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council announced the final rule to amend key dollar thresholds under the Federal Acquisition Regulation (FAR). 75 Fed. Reg. 53130 (Aug. 30, 2010). The amendment is effective October 1, 2010 and implements Section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005, which mandates five-year adjustments for inflation to acquisition-related thresholds based on the Consumer Price Index ("CPI"). This final rule covers both increases to statutory thresholds and increases to other dollar thresholds that appear only in the FAR. However, thresholds related to the Davis-Bacon Act, Service Contract Act, and Trade Agreements Act are not affected by this rule.

Thresholds that would be increased by the proposed rule include:

  • Increasing the Simplified Acquisition Threshold from $100,000 to $150,000
    (FAR 2.201);
  • Increasing the Cost and Pricing data threshold from $650,000 to $700,000
    (FAR 15.403-4); and
  • Increasing the prime contractor Subcontracting Plan floor from $550,000 to $650,000, and the Construction Threshold from $1,000,000 to $1,500,000
    (FAR 19.702).


Notably, the micro-purchase threshold of $3,000 (FAR 2.101) will not change. Because the CPI was slightly lower than expected, some thresholds from the proposed rule, published on February 4, 2010, that exceeded $13 Million were reduced in this final rule.

To see a complete list of the affected thresholds and amendments to the FAR, visithttp://edocket.access.gpo.gov/2010/pdf/2010-21025.pdf. For further information regarding the proposed rule, please contact Tim Connelly at (612) 236-0160 or [email protected] .