Significant Increases to FAR Dollar Thresholds Under Proposed Rule

2.5.2010 - Posted in E&B Alerts – Government Contracts

On February 4, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued a proposed rule to amend the Federal Acquisition Regulation (FAR). 75 Fed. Reg. 5716 (Feb. 4, 2010). The amendment would implement 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"). The proposed 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 are excepted from the increases.

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) would not be changed.  The proposed increases are based on a projected CPI of 222 as of April 2010.  If the CPI turns out to be higher, additional adjustments will be made to the increases set forth in the current version of the proposed rule.

To see a complete list of the affected thresholds, visit www.regulations.gov and search for "FAR Case 2008-024."  Comments regarding the proposed amendment may be submitted through www.regulations.gov.   The deadline for submitting comments is April 5, 2010.  For further information regarding the proposed rule, please contact Mark Blando at (612) 236-0160 or [email protected] .