The value of a federal government contract determines the applicability of various trade agreements. When the value of a contract exceeds the threshold established for a particular agreement, contractors may choose to provide products from countries who are a party to that agreement. Yesterday, the DoD approved an increase in the procurement thresholds for trade agreements applicable to federal contracts. These changes were published in the Federal Register by the United States Trade Representative and took effect on January 1, 2010 (see 74 Fed. Reg. 68907 (Dec. 29, 2009)). Yesterday’s action implements the new thresholds throughout the Department of Defense.
The new thresholds replace those found at Federal Acquisition Regulation (FAR) 25.402(b) for Department of Defense contracts. Contracting officers are instructed to use the new thresholds instead of the current FAR 25.402(b) wherever they appear in the FAR or the Defense Federal Acquisition Regulation Supplement (DFARS). The superseding table is available at: http://www.acq.osd.mil/dpap/policy/policyvault/USA000154-10-DPAP.pdf.
It is important for contractors to recognize how the value of a contract affects what contract clauses and laws may apply to the contract. If you have any questions regarding how this change will affect your business, please contact us.