FAR Inflation Adjustment of Acquisition-Related Thresholds

It’s time to update acquisition-related thresholds – an adjustment for CPI every 5 years to satisfy the requirement at 41 U.S.C. 1908. You can read the entire Proposed Rule in the Federal Register.

What is the effect of this proposed rule on the most heavily-used thresholds?

This rule includes the following proposed changes to heavily-used thresholds:

  • The micro-purchase threshold of $3,000 (FAR 2.101) will increase to $3,500. The Title 41 recodification (Pub. L. 111-350, enacted January 4, 2011) relocated the micro-purchase authorization to 41 U.S.C. 1902, and raised the micro-purchase threshold to $3,000 (equivalent to the escalated value in the FAR). However, as Congress stated in House Report 111-42, the recodification statute did not intend to make any substantive changes, therefore the inflation calculation will continue to be calculated based on the October 2000 amount of $2,500, not the January 2011 value of $3,000.
  • The simplified acquisition threshold (FAR 2.101) of $150,000 will not change.
  • The FedBizOpps preaward and post-award notices (FAR Part 5) remain at $25,000 because of trade agreements.
  • Commercial items test program ceiling (FAR 13.500) will increase from $6.5 million to $7 million.
  • The cost or pricing data threshold (FAR 15.403-4) will increase from $700,000 to $750,000.
  • The prime contractor subcontracting plan (FAR 19.702) floor will increase from $650,000 to $700,000, but the construction threshold of $1.5 million will not change.

The threshold for reporting first-tier subcontract information including executive compensation will increase from $25,000 to $30,000 (FAR subpart 4.14 and section 52.204-10).

This proposed rule is based on a projected CPI of 243 for March 2015. If the actual CPI for March 2015 is higher than 243, then additional statutory thresholds may be subject to escalation in the final rule, even though not included in the proposed rule.

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