Federal Acquisition Regulation: Increased Micro-Purchase and Simplified Acquisition Thresholds; 2018-004, 52420-52425 [2019-20796]
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Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / Proposed Rules
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SUPPLEMENTARY INFORMATION:
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Dated: September 25, 2019.
Panagiotis Tsirigotis,
Director, Office of Air Quality Planning and
Standards.
[FR Doc. 2019–21219 Filed 10–1–19; 8:45 am]
BILLING CODE 6560–50–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 2, 9, 13, 16, 19, 22, 25,
and 52
[FAR Case 2018–004; Docket No. FAR–
2018–0011, Sequence No. 1]
RIN 9000–AN65
Federal Acquisition Regulation:
Increased Micro-Purchase and
Simplified Acquisition Thresholds;
2018–004
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Proposed rule.
AGENCY:
DoD, GSA, and NASA are
proposing to amend the Federal
Acquisition Regulation (FAR) to
implement a section of the National
Defense Authorization Act (NDAA) for
Fiscal Year (FY) 2017 and several
sections of the NDAA for FY 2018 that
increase the micro-purchase threshold
(MPT), increase the simplified
acquisition threshold (SAT), and clarify
certain procurement terms, as well as
align some non-statutory thresholds
with the MPT and SAT.
DATES: Interested parties should submit
comments to the Regulatory Secretariat
Division at one of the addresses shown
below on or before December 2, 2019 to
be considered in the formulation of a
final rule.
ADDRESSES: Submit comments in
response to FAR Case 2018–004 by any
of the following methods:
• Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
searching for ‘‘FAR Case 2018–004’’.
Select the link ‘‘Comment Now’’ that
corresponds with ‘‘FAR Case 2018–
004.’’ Follow the instructions provided
on the screen. Please include your
name, company name (if any), and
‘‘FAR Case 2018–004’’ on your attached
document.
• Mail: General Services
Administration, Regulatory Secretariat
SUMMARY:
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Division (MVCB), ATTN: Lois Mandell,
1800 F Street NW, 2nd floor,
Washington, DC 20405.
Instructions: Please submit comments
only and cite ‘‘FAR case 2018–004’’ in
all correspondence related to this case.
All comments received will be posted
without change to https://
www.regulations.gov, including any
personal and/or business confidential
information provided. To confirm
receipt of your comment(s), please
check https://www.regulations.gov,
approximately two to three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Mr.
Michael O. Jackson, Procurement
Analyst, at 202–208–4949 or
michaelo.jackson@gsa.gov for
clarification of content. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat Division at 202–501–4755.
Please cite ‘‘FAR Case 2018–004’’.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing
to amend the FAR to implement section
217(b) of the NDAA for FY 2017 (Pub.
L. 114–328) and sections 805, 806, and
1702(a) of the NDAA for FY 2018 (Pub.
L. 115–91). The proposed rule will also
replace non-statutory, stated dollar
thresholds that are intended to
correspond with the MPT and SAT,
with the text ‘‘micro-purchase
threshold’’ and ‘‘simplified acquisition
threshold.’’ Referencing some stated
thresholds by name instead of by a
specific dollar value will ease
maintenance of regulations, given the
likelihood of future changes to the
threshold amounts. Text clarifying the
use of the approval thresholds, based on
the increase of the SAT, for sole source
justifications executed under the
simplified procedures for certain
commercial items has been added to
subpart 13.5.
Section 217(b) amends 41 U.S.C. 1902
to increase the MPT for acquisitions
from institutions of higher education or
related or affiliated nonprofit entities, or
from nonprofit research organizations or
independent research institutes, from
$3,500 to $10,000, or a higher amount
as determined appropriate by the head
of the agency and consistent with clean
audit findings under 31 U.S.C. Chapter
75, an internal institutional risk
assessment, or State law.
Section 806 increases the MPT in 41
U.S.C. 1902(a) to $10,000.
Section 805 increases the SAT to
$250,000.
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Section 1702(a) amends section
15(j)(1) of the Small Business Act (15
U.S.C. 644(j)(1)) to replace specific
dollar thresholds with the terms ‘‘micropurchase threshold’’ and ‘‘simplified
acquisition threshold.’’
II. Discussion and Analysis
This rule proposes to amend the FAR,
as follows:
• At FAR Part 2, to—
Æ Replace ‘‘$3,500’’ with ‘‘$10,000’’
and add an exception to the MPT for
acquisitions from institutions of higher
education or related or affiliated
nonprofit entities, nonprofit research
organizations, or independent research
institutes, at the definition of ‘‘micropurchase threshold’’ and,
Æ Replace ‘‘$150,000’’ with
‘‘$250,000’’ at the definition of
‘‘simplified acquisition threshold.’’
• At FAR Part 3, to replace
‘‘simplified acquisition threshold’’ with
‘‘$150,000’’ at 3.502–3 to conform to
3.502–2(i).
• At FAR part 9, to replace ‘‘$3,500’’
with ‘‘$10,000’’ as the Federal tax
delinquency threshold, at 9.406–
2(b)(1)(v) replaces ‘‘$3,500’’ with ‘‘the
threshold at FAR 9.104–5(a)(2)’’ and at
9.407–2(a)(7) replaces ‘‘$3,500’’ with
‘‘the threshold at FAR 9.104–5(a)(2)’’.
When an offeror indicates in its
representations and certifications a
delinquency in excess of the threshold,
a contracting officer must report that
information to the agency’s suspending
or debarring official, and, a suspending
or debarring official may suspend or
debar a contractor for delinquent
Federal taxes in excess of the threshold.
• At FAR part 13, to replace ‘‘$3,500’’
with ‘‘the micro-purchase threshold’’
and ‘‘$150,000’’ with ‘‘the simplified
acquisition threshold’’ when addressing
the thresholds for acquisitions that are
reserved exclusively for small business
concerns;
Æ At FAR 13.005, List of laws
inapplicable to contracts and
subcontracts at or below the simplified
acquisition threshold, there is an impact
of this increase in the SAT. This list was
first required by section 4101 of FASA
(Pub. L. 103–355), now codified at 41
U.S.C. 1906. FASA sections 4102–4104
made certain laws inapplicable below
the SAT, and made other laws
inapplicable below $100,000. At the
time, these two thresholds were of
equivalent value, so there was no
problem with listing all of them at FAR
13.005. Intervening escalation raised all
of these thresholds to $150,000.
However, now that the SAT has been
increased to $250,000, those thresholds
that were set at a dollar value rather
than at the SAT, are not increasing to
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$250,000. Therefore, the following laws
should be removed from the list at FAR
13.005: 13.005(a)(1), (a)(2), (a)(3), and
(a)(5);
Æ At FAR 13.501(a)(2) to clarify the
procedures to be used for justifications
of other than full and open competition,
when the simplified acquisition
threshold is raised, e.g., for contingency
operations.
• At FAR part 16, to replace
‘‘$150,000’’ with ‘‘the simplified
acquisition threshold’’ when addressing
the maximum threshold for fixedceiling-price contracts with retroactive
price redetermination and the maximum
threshold for firm-fixed-price, level-ofeffort term contracts, without higher
level approval.
• At FAR part 19, to replace ‘‘$3,500’’
with ‘‘the micro-purchase threshold’’
and/or ‘‘$150,000’’ with ‘‘the simplified
acquisition threshold’’ when addressing
set-aside requirements, and inserting the
clause for FAR 52.219–14, Limitations
on Subcontracting.
• At FAR part 22, specifically,
22.1803, replace ‘‘the simplified
acquisition threshold’’ with ‘‘$150,000.’’
• At FAR part 25, to replace ‘‘$3,500’’
with ‘‘10,000’’ as the ‘‘significant
transaction’’ amount an offeror may not
exceed when engaging with Iran’s
Revolutionary Guard Corps or any of its
officials, agents, or affiliates.
• At FAR part 52, to—
Æ Replace ‘‘$3,500’’ with ‘‘the
threshold at 9.104–5(a)(2)’’ at FAR
52.209–5(a)(1)(i)(D) and FAR 52.212–
3(h)(4);
Æ Replace ‘‘$150,000’’ with the
‘‘simplified acquisition threshold’’ as
the subcontractor flow-down threshold
for FAR 52.203–16, Preventing Personal
Conflicts of Interest;
Æ Replace ‘‘$3,500’’ with ‘‘the micropurchase threshold’’ as the threshold an
offer must exceed, unless otherwise
required, for the offeror to be required
to provide its unique entity identifier, as
stated in paragraph (j) of FAR provision
52.212–1, Instruction to Offerors—
Commercial Items;
Æ Replace the threshold an offeror
must certify, in paragraph (o)(2)(iii) of
FAR 52.212–3, and FAR 52.225–25,
Prohibition on Contracting with Entities
Engaging in Certain Activities or
Transactions Relating to Iran—
Representation and Certifications, it has
not exceeded when engaging with Iran’s
Revolutionary Guard Corps or any of its
officials, agents, or affiliates. The clause
title of FAR 52.225–25 is also corrected.
The threshold will be that at FAR
25.703–2(a)(2);
Æ Replace ‘‘$150,000’’ with ‘‘the
simplified acquisition threshold’’ as the
threshold a subcontract award must
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exceed in order for a contractor to be
required to keep records on the
corresponding subcontract solicitation,
as identified in FAR clause 52.219–9,
Small Business Subcontracting Plan and
its Alternate IV.
III. Expected Impact of the Proposed
Rule and Proposed Cost Savings
This rule impacts any business, large
or small, that prepares quotes exceeding
$3,500 ($5,000 for DoD) and not
exceeding $10,000 (or higher for select
educational institutions); proposals
exceeding $150,000 and not exceeding
$250,000; and proposals exceeding
$300,000 and not exceeding $500,000,
in support of humanitarian or
peacekeeping operations. This rule does
not add any new solicitation provisions
or contract clauses. Rather, it reduces
burden on contractors by increasing the
thresholds at which various regulatory
burdens apply.
Increasing the MPT and SAT means
additional awards could be made under
the MPT and additional awards could
be made under the SAT. The additional
awards at or below the MPT would not
require provisions or clauses, except as
provided in FAR 13.202 and FAR
32.1110, and the additional awards at or
below the SAT would be awarded
without provisions and clauses which
are prescribed only above the SAT. In
addition to including fewer regulations
in applicable awards, the proposed rule
would allow for more awards based on
quotes in lieu of a formal proposal,
thereby reducing the contractor’s bid
and proposal costs. Costs associated
with contractor financing could also be
reduced by increasing the number of
micro-purchases, for which the
Governmentwide purchase card is the
preferred method of purchase and
payment (see FAR 13.201(b)).
To determine the dollar amounts and
entities affected, data was pulled from
the Federal Procurement Data System
(FPDS) from fiscal years 2015–2018. For
the micro-purchase value change, there
was an annual average in total impacted
contract awards of $2,442,317 for small
businesses and $1,359,916 for other
than small businesses for contracts with
values exceeding $3,500 ($5,000 for
DOD), but less than or equal to $10,000
(or higher, for educational institutions).
For the simplified acquisition threshold
change, there was an annual average in
total impacted contract awards of
$300,073,039 for small businesses and
$161,715,144 for other than small
businesses for contracts with values
exceeding $150,000, but less than or
equal to $250,000 (from $300,000 to
$500,000 for contingency, humanitarian,
or peacekeeping awards).
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Commercial item awards, as well as
orders placed through indefinitequantity contract orders and other large
contracting schedule orders, were
removed from this calculation to
determine the cost reduction on offerors
and contractors. Commercial items were
removed from this calculation because
the simplified threshold for commercial
item awards is set at $7 million, so the
increased SAT threshold would not
impact compliance or business
procedures for contractors with awards
conducted through commercial item
procedures.
To calculate the burden reduction on
Government by raising these thresholds,
indefinite-quantity contracts were
included, as the threshold changes
would impact Government acquisition
procedures.
The Federal Acquisition Streamlining
Act (FASA) made a number of laws
inapplicable to items procured under
the SAT. This was meant to save both
the Government and service providers
money while also expediting the entire
contract process. When finalized, this
rule will decrease the number of
regulatory requirements agencies need
to include in awards.
Because this rule will reduce bid and
proposal costs and other administrative
burdens and since it does not
implement any new requirements on
Summary
Public
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Present Value Costs ................................................................................
Annualized Costs .....................................................................................
Annualized Value Costs (as of 2016 if Year 1 is 2019) ..........................
In an attempt to quantify savings as a
result of this rule, DoD, GSA, and NASA
seek input from contractors that could
be impacted by this rule. In addition to
the Government cost savings discussed
in the accompanying materials in the
docket at www.regulations.gov, DoD,
GSA, and NASA welcome feedback on
contract proposals and contract quotes
(but not quotes for a task order or
delivery order) on—
1. The total bid and proposal (B&P)
cost and the total number of proposals
in Fiscal Year (FY) 2018 for proposals
greater than $150,000 and less than or
equal to $250,000, including the hours
expended in the preparation of the
proposals and personnel involved. If
available, the total cost related to
compliance for awards greater than
$150,000 and less than or equal to
$250,000 that could be eliminated by
using simplified acquisition procedures.
2. The total B&P cost and the total
number of quotes in FY 2018 for quotes
less than or equal to $150,000, including
the hours expended in the preparation
of the quotes and personnel involved.
3. The total B&P cost and the total
number of quotes in FY18 for quotes
greater than $3,500 and less than or
equal to $10,000, including the hours
expended in the preparation of the
quotes and personnel involved. If
available, the total cost related to
compliance for awards greater than
$3,500 and less than or equal to $10,000
that could be eliminated by conducting
a micro-purchase.
4. The total B&P cost and the total
number of quotes in FY18 for quotes
less than or equal to $3,500, including
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¥$662,413,271
¥$46,368,929
¥$37,850,858
the hours expended in the preparation
of the quotes and personnel involved.
IV. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold and for Commercial Items,
Including Commercially Available Offthe-Shelf (COTS) Items
The rule applies to contracts at or
below the simplified acquisition
threshold, and to contracts for
commercial items, including COTS
items. However, it does not add any
new solicitation provisions or contract
clauses, and it reduces burden on
contractors by increasing the thresholds
at which various regulatory burdens
apply.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and
13563 direct agencies to assess all costs
and benefits of available regulatory
alternatives and, if regulation is
necessary, to select regulatory
approaches that maximize net benefits
(including potential economic,
environmental, public health and safety
effects, distributive impacts, and
equity). E.O. 13563 emphasizes the
importance of quantifying both costs
and benefits, of reducing costs, of
harmonizing rules, and of promoting
flexibility. This is an economically
significant regulatory action and,
therefore, was subject to review under
section 6(b) of E.O. 12866, Regulatory
Planning and Review, dated September
30, 1993. This rule is a major rule under
5 U.S.C. 804.
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offerors, DoD, GSA, and NASA believe
this rule to be deregulatory.
Please see the Regulatory Cost
Analysis narrative for an in-depth
discussion of data used to calculate the
estimated reduced burden on
contractors and the Government. To
access the full Regulatory Cost Analysis
for this rule, go to the Federal
eRulemaking Portal at
www.regulations.gov, search for ‘‘FAR
Case 2018–004,’’ click ‘‘Open Docket,’’
and view ‘‘Supporting Documents.’’ The
following is a summary of the estimated
public and Government cost savings
calculated in perpetuity in 2016 dollars
at a 7-percent discount rate:
Government
¥$2,216,678,757
¥$155,167,513
¥$126,662,911
Total
¥$2,879,092,029
¥$201,536,442
¥$164,513,770
VI. Congressional Review Act
This proposed rule is subject to the
Congressional Review Act provisions of
the Small Business Regulatory
Enforcement Fairness Act of 1996 (5
U.S.C. 801 et seq.) and will, if finalized,
be transmitted to the Congress and to
the Comptroller General for review in
accordance with such provisions.
VII. Executive Order 13771
This rule is subject to E.O. 13771
because this rule is an economically
significant regulatory action under E.O.
12866. As explained in section III of this
preamble and in the accompanying
documentation available in the docket
at www.regulations.gov, DoD, GSA, and
NASA believe the rule is deregulatory
and seek public input on this
preliminary determination as well as
information that can better quantify
savings.
VIII. Regulatory Flexibility Act
DoD, GSA, and NASA expect this rule
to have a positive significant economic
impact on a substantial number of small
entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601,
et seq. An Initial Regulatory Flexibility
Analysis (IRFA) has been performed and
is summarized as follows:
DoD, GSA, and NASA are proposing to
amend the FAR to implement a section of the
NDAA for Fiscal Year (FY) 2017 and several
sections of the NDAA for FY 2018 that
increase the MPT, increase the SAT, clarify
certain procurement terms, as well as align
non-statutory thresholds with the MPT and
SAT.
The objective of the rule is to implement
section 217(b) of the NDAA for FY 2017 (Pub.
L. 114–328) and sections 805, 806, and
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1702(a) of the NDAA for FY 2018 (Pub. L.
115–91), as well as align non-statutory, stated
dollar thresholds that are intended to
correspond with the MPT and SAT, with
word-based thresholds to ensure continued
alignment with the current increase to these
thresholds and any future change to the
threshold amounts. DoD, GSA, and NASA
expect this rule to have a positive significant
economic impact on a substantial number of
small entities within the meaning of the
Regulatory Flexibility Act, 5 U.S.C. 601, et
seq.
According to data from the Federal
Procurement Data System (FPDS), there were
505 contracts awarded in FY 2018 with a
value exceeding $3,500 ($5,000 for DOD), but
less than or equal to $10,000 wherein
contractors would have a change in
compliance requirements. Of the 505 new
awards, 358 (71 percent) of these actions
were awarded to 198 unique small business
entities.
Data from FPDS also indicates that in FY
2018, there were no (0) small business
entities that had additional contract actions
for educational or related institutions for
contracts with a value exceeding $10,000, but
less than or equal to $15,000 (equivalent to
the upper bound of the expected micropurchase value for these types of institutions)
wherein contractors would have a change in
compliance requirements.
Data from FPDS also indicates there were
3,653 new contracts awarded in FY 2018
with a value exceeding $150,000, but less
than or equal to $250,000 wherein
contractors would have a change in
compliance requirements. Of these, 2,621 (72
percent) of these actions were awarded to
1,680 unique small business entities.
As mentioned previously, commercial
items were removed from this calculation
because the simplified threshold for
commercial item awards is set at $7 million,
so the increased SAT threshold would not
impact compliance or business procedures
for contractors with awards conducted
through commercial item procedures.
Data from the FPDS further indicates that
for contingency, humanitarian, or
peacekeeping contract actions, there were 11
new total contracts awarded in FY 2018 with
a value exceeding $300,000 but less than or
equal to $500,000 wherein contractors would
have a change in compliance requirements.
Of these, 4 (36 percent) of these actions were
awarded to 4 unique small business entities.
This rule will also change the smallbusiness set aside threshold under FAR
19.502; instead of being from greater than
$3,500 to less than or equal to $150,000, the
threshold will be from greater than $10,000
to less than or equal to $250,000. This is
expected to increase the number of small
business entities able to do business with the
Government; for contracts affected by this
threshold change, (please see full regulatory
cost analysis for explanation of excepted
contract types), in FY 2018, there were 3,653
records exceeding $150,000 and less than or
equal to $250,000, while there were 505
records exceeding $3,500 ($5,000 for DOD)
and less than or equal to $10,000.
As of September 30, 2017, there were
637,791 active entity registrations in SAM. Of
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those active entity registrations, 452,310 (71
percent) completed all four modules of the
registration, in accordance with the
definition ‘‘Registered in the System for
Award Management (SAM)’’ at FAR 52.204–
7(a), including Assertions (where they enter
their size metrics and select their NAICS
Codes) and Reps & Certs (where they certify
to the information they provided and the size
indicator by NAICS).
Of the possible 452,310 active SAM entity
registrations, 338,207 (75 percent) certified to
meeting the size standard of small for their
primary NAICS Code. Therefore, this rule
may be beneficial to 338,207 small business
entities that submit solicitation responses
that may now fall under the MPT or SAT and
have streamlined procedures as a result of
this rule.
The proposed rule applies to all entities
who do business with the Federal
Government.
This proposed rule does not include any
new reporting, recordkeeping, or other
compliance requirements. The rule reduces
burden on contractors by increasing the
thresholds at which various regulatory
burdens begin to apply. The proposed rule
does not duplicate, overlap, or conflict with
any other Federal rules. There are no known
significant alternative approaches to the
proposed rule that would meet the
requirements of the applicable requirement.
The Regulatory Secretariat Division
has submitted a copy of the IRFA to the
Chief Counsel for Advocacy of the Small
Business Administration. A copy of the
IRFA may be obtained from the
Regulatory Secretariat Division. DoD,
GSA, and NASA invite comments from
small business concerns and other
interested parties on the expected
impact of this rule on small entities.
DoD, GSA, and NASA will also
consider comments from small entities
concerning the existing regulations in
subparts affected by the rule in
accordance with 5 U.S.C. 610. Interested
parties must submit such comments
separately and should cite 5 U.S.C. 610
(FAR Case 2018–004), in
correspondence.
IX. Paperwork Reduction Act
The rule does not contain any
information collection requirements that
require the approval of the Office of
Management and Budget under the
Paperwork Reduction Act (44 U.S.C.
chapter 35).
List of Subjects in 48 CFR Parts 2, 9, 13,
16, 19, 22, 25 and 52
Government procurement.
William F. Clark,
Director, Office of Government-wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA
propose amending 48 CFR parts 2, 9, 13,
16, 19, 22, 25, and 52 as set forth below:
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1. The authority citation for 48 CFR
parts 2, 9, 13, 16, 19, 22, 25, and 52
continues to read as follows:
■
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 51 U.S.C. 20113.
PART 2—DEFINITIONS OF WORDS
AND TERMS
2. Amend section 2.101, in paragraph
(b) by—
■ a. In the definition ‘‘Micro-purchase
threshold’’ removing from the
introductory text ‘‘$3,500’’ and adding
‘‘$10,000’’ in its place, removing from
paragraph (2) the word ‘‘and’’ at the end
of the sentence, removing from
paragraph (3)(ii) ‘‘States.’’ and adding
‘‘States; and’’ in its place, and adding
paragraph (4); and
■ b. In the definition ‘‘Simplified
acquisition threshold’’ removing from
the introductory text ‘‘$150,000’’ and
adding ‘‘$250,000’’ in its place, and
removing from paragraph (2)
‘‘$300,000’’ and adding ‘‘$500,000’’ in
its place.
The addition reads as follows:
■
2.101
Definitions.
*
*
*
*
*
(b) * * *
Micro-purchase threshold * * *
(4) For acquisitions of supplies or
services from institutions of higher
education (20 U.S.C. 1001(a)) or related
or affiliated nonprofit entities, or from
nonprofit research organizations or
independent research institutes—
(i) $10,000; or
(ii) A higher threshold, as determined
appropriate by the head of the agency
and consistent with clean audit findings
under 31 U.S.C. chapter 75,
Requirements for Single Audits; an
internal institutional risk assessment; or
State law.
*
*
*
*
*
PART 3—IMPROPER BUSINESS
PRACTICES AND PERSONAL
CONFLICTS OF INTEREST
*
*
3.502–3
*
*
*
[Amended]
3. Amend section 3.502–3 by
removing ‘‘the simplified acquisition
threshold’’ and adding ‘‘$150,000’’ in its
place.
*
*
*
*
*
■
PART 9—CONTRACTOR
QUALIFICATIONS
9.104–5
[Amended]
4. Amend section 9.104–5 by
removing from paragraph (a)(2)
‘‘$3,500’’ and adding ‘‘$10,000’’ in its
place.
■
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02OCP1
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9.406–2
Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / Proposed Rules
[Amended]
13.501
5. Amend section 9.406–2 by
removing from paragraph (b)(1)(v)
‘‘$3,500’’ and adding ‘‘the threshold at
9.104–5(a)(2)’’ in its place.
■
9.407–2
[Amended]
6. Amend section 9.407–2 by
removing from paragraph (a)(7)
‘‘$3,500’’ and adding ‘‘the threshold at
9.104–5(a)(2)’’ in its place.
■
PART 13—SIMPLIFIED ACQUISITION
PROCEDURES
Policy.
*
*
*
*
*
(b)(1) Acquisitions of supplies or
services that have an anticipated dollar
value exceeding the micro-purchase
threshold but not exceeding the
simplified acquisition threshold are
reserved exclusively for small business
concerns and shall be set aside (see
19.000, 19.203, and subpart 19.5).
*
*
*
*
*
■ 8. Amend section 13.005 by revising
paragraph (a) to read as follows:
khammond on DSKJM1Z7X2PROD with PROPOSALS
13.005 List of laws inapplicable to
contracts and subcontracts at or below the
simplified acquisition threshold.
(a) The following laws are
inapplicable to all contracts and
subcontracts (if otherwise applicable to
subcontracts) at or below the simplified
acquisition threshold pursuant to 41
U.S.C. 1905:
(1) 41 U.S.C. 8102(a)(1) (Drug-Free
Workplace), except for individuals.
(2) 10 U.S.C. 2306(b) and 41 U.S.C.
3901(b) (Contract Clause Regarding
Contingent Fees).
(3) 10 U.S.C. 2313 and 41 U.S.C. 4706
(Authority to Examine Books and
Records of Contractors).
(4) 10 U.S.C. 2402 and 41 U.S.C. 4704
(Prohibition on Limiting Subcontractors
Direct Sales to the United States).
(5) 15 U.S.C. 631 note (HUBZone Act
of 1997), except for 15 U.S.C.
657a(b)(2)(B), which is optional for the
agencies subject to the requirements of
the Act.
(6) 31 U.S.C. 1354(a) (Limitation on
use of appropriated funds for contracts
with entities not meeting veterans
employment reporting requirements).
(7) 22 U.S.C. 2593e (Measures Against
Persons Involved in Activities that
Violate Arms Control Treaties or
Agreements with the United States).
(The requirement at 22 U.S.C.
2593e(c)(3)(B) to provide a certification
does not apply).
*
*
*
*
*
16:10 Oct 01, 2019
Jkt 250001
[Amended]
10. Amend section 16.206–2 by
removing from the introductory text
‘‘$150,000’’ and adding ‘‘the simplified
acquisition threshold’’ in its place.
7. Amend section 13.003 by revising
paragraph (b)(1) to read as follows:
VerDate Sep<11>2014
PART 16—TYPES OF CONTRACTS
16.206–2
16.206–3
[Amended]
11. Amend section 16.206–3 by
removing from paragraph (a) ‘‘$150,000’’
and adding ‘‘the simplified acquisition
threshold’’ in its place.
■
16.207–3
[Amended]
12. Amend section 16.207–3 by
removing from paragraph (d)
‘‘$150,000’’ and adding ‘‘the simplified
acquisition threshold’’ in its place.
■
PART 19—SMALL BUSINESS
PROGRAMS
13. Amend section 19.203 by revising
paragraph (b) to read as follows:
■
19.203 Relationship among small
business programs.
*
*
*
*
*
(b) At or below the simplified
acquisition threshold. For acquisitions
of supplies or services that have an
anticipated dollar value exceeding the
micro-purchase threshold, but not
exceeding the simplified acquisition
threshold, the requirement at 19.502–
2(a) to exclusively reserve acquisitions
for small business concerns does not
preclude the contracting officer from
awarding a contract to a small business
under the 8(a) Program, HUBZone
Program, SDVOSB Program, or WOSB
Program.
*
*
*
*
*
19.502–1
Frm 00041
Fmt 4702
19.502–2
Total small business set-asides.
(a) * * * Each acquisition of supplies
or services that has an anticipated dollar
value exceeding the micro-purchase
threshold, but not over the simplified
acquisition threshold, is automatically
reserved exclusively for small business
concerns and shall be set aside for small
business unless the contracting officer
determines there is not a reasonable
expectation of obtaining offers from two
or more responsible small business
concerns that are competitive in terms
of market prices, quality, and delivery.
* * *
*
*
*
*
*
19.508
[Amended]
16. Amend section 19.508 by
removing from paragraph (e) ‘‘$150,000’’
and adding ‘‘the simplified acquisition
threshold’’ in its place.
■
PART 22—APPLICATION OF LABOR
LAWS TO GOVERNMENT
ACQUISITIONS
22.1803
[Amended]
17. Amend section 22.1803 by
removing from the introductory text
‘‘the simplified acquisition threshold’’
and adding ‘‘$150,000’’ in its place.
■
PART 25—FOREIGN ACQUISITION
25.703–2
[Amended]
18. Amend section 25.703–2 by
removing from paragraph (a)(2)
‘‘$3,500’’ and adding ‘‘$10,000’’ in its
place.
■
25.703–4
[Amended]
19. Amend section 25.703–4 by
removing from paragraphs (c)(5)(ii),
(c)(7)(iii), and (c)(8)(iii) ‘‘$3,500’’ and
adding ‘‘the threshold at 25.703–2(a)(2)’’
in its place, respectively.
■
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
20. Amend section 52.203–16 by
revising the date of the clause and
removing from paragraph (d)(1)
‘‘$150,000’’ and adding ‘‘the simplified
acquisition threshold’’ in its place.
The revision reads as follows:
■
[Amended]
14. Amend section 19.502–1 by—
■ a. Removing from paragraph (b) ‘‘of
$3,500 or less ($20,000 or less for
acquisitions as described in
13.201(g)(1))’’ and adding ‘‘valued at or
below the micro-purchase threshold’’ in
its place, and
■ b. Removing ‘‘Part 8’’ in paragraph (b)
and adding ‘‘part 8’’ in its place.
■ 15. Amend section 19.502–2 by—
■ a. Revising the second sentence in
paragraph (a), and
■
PO 00000
b. Removing from paragraph (b)
‘‘$150,000’’ and adding ‘‘the simplified
acquisition threshold’’ in its place.
The revision reads as follows:
■
■
■
13.003
[Amended]
9. Amend section 13.501 by removing
from paragraph (a)(2)(i) ‘‘$150,000’’ and
adding ‘‘the simplified acquisition
threshold’’ in its place, and removing
from paragraph (a)(2)(ii) ‘‘$700,000’’ and
adding ‘‘$700,000 or the thresholds in
paragraph (1) of the definition of
simplified acquisition threshold in FAR
2.101,’’ in its place.
■
Sfmt 4702
52.203–16 Preventing Personal Conflicts
of Interest.
*
*
*
*
*
Preventing Personal Conflicts of Interest
(DATE)
*
E:\FR\FM\02OCP1.SGM
*
*
02OCP1
*
*
Federal Register / Vol. 84, No. 191 / Wednesday, October 2, 2019 / Proposed Rules
21. Amend section 52.209–5 by
revising the date of the provision and
removing from paragraph (a)(1)(i)(D)
introductory text ‘‘$3,500’’ and adding
‘‘the threshold at 9.104–5(a)(2)’’ in its
place.
The revision reads as follows:
■
52.209–5 Certification Regarding
Responsibility Matters.
*
*
*
*
*
52.219–9
Plan.
Certification Regarding Responsibility
Matters (DATE)
*
*
*
*
*
*
22. Amend section 52.212–1 by
revising the date of the provision and
removing from paragraph (j) ‘‘$3,500,
and offers of $3,500’’ and adding ‘‘the
micro-purchase threshold, and offers at
the micro-purchase threshold’’ in its
place.
The revision reads as follows:
■
52.212–1 Instructions to Offerors—
Commercial Items.
*
*
*
*
*
Instructions to Offerors—Commercial Items
(DATE)
*
*
*
*
*
■ 23. Amend section 52.212–3 by—
■ (a) Revising the date of the provision;
■ (b) Removing from paragraph (h)(4)
introductory text ‘‘$3,500’’ and adding
‘‘the threshold at 9.104–5(a)(2)’’ in its
place; and
■ (c) Removing from paragraph
(o)(2)(iii) ‘‘$3,500’’ and adding ‘‘the
threshold at 25.703–2(a)(2)’’ in its place.
The revision reads as follows:
52.212–3 Offeror Representations and
Certifications—Commercial Items.
*
*
*
*
*
*
*
*
*
24. Amend section 52.212–5 by—
(a) Revising the date of the clause;
(b) Removing from paragraph (b)(17)(i)
‘‘(Aug 2018)’’ and adding ‘‘(DATE); and
■ (c) Removing from paragraph
(b)(17)(v) ‘‘(Aug 2018)’’ and adding
‘‘(DATE) in its place.
The revision reads as follows:
■
■
■
khammond on DSKJM1Z7X2PROD with PROPOSALS
52.212–5 Contract Terms and Conditions
Required To Implement Statutes or
Executive Orders—Commercial Items.
*
*
*
*
Contract Terms and Conditions Required To
Implement Statutes or Executive Orders—
Commercial Items (DATE)
*
*
*
*
*
■ 25. Amend section 52.219–9 by—
■ a. Revising the date of the clause;
■ b. Removing from paragraph
(d)(11)(iii) ‘‘$150,000’’ and adding ‘‘the
VerDate Sep<11>2014
16:10 Oct 01, 2019
Jkt 250001
*
Small Business Subcontracting
*
*
*
Small Business Subcontracting Plan (DATE)
*
*
*
*
*
Alternate IV (DATE). * * *
*
*
*
*
*
26. Amend section 52.225–25 by
revising the provision title and date, and
removing from paragraph (c)(3)
‘‘$3,500’’ and adding ‘‘the threshold at
25.703–2(a)(2)’’ in its place.
The revisions read as follows:
■
52.225–25 Prohibition on Contracting with
Entities Engaging in Certain Activities or
Transactions Relating to Iran—
Representation and Certifications.
*
*
*
*
*
Prohibition on Contracting With Entities
Engaging in Certain Activities or
Transactions Relating to Iran—
Representation and Certifications (DATE)
*
*
*
*
*
[FR Doc. 2019–20796 Filed 10–1–19; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
*
Offeror Representations and Certifications—
Commercial Items (DATE)
*
simplified acquisition threshold’’ in its
place;
■ c. Revising the date of Alternate IV;
and
■ d. In Alternate IV, removing from
(d)(11)(iii) ‘‘$150,000’’ and adding ‘‘the
simplified acquisition threshold’’ in its
place.
The revisions read as follows:
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 12, 13, 15, 16, and 37
[FAR Case 2018–016; Docket No. FAR–
2018–0016, Sequence No. 1]
RIN 9000–AN75
Federal Acquisition Regulation:
Lowest Price Technically Acceptable
Source Selection Process
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Proposed rule.
AGENCY:
DoD, GSA, and NASA are
proposing to amend the Federal
Acquisition Regulation (FAR) to
implement a section of the John S.
McCain National Defense Authorization
Act for Fiscal Year 2019, which
SUMMARY:
PO 00000
Frm 00042
Fmt 4702
Sfmt 4702
52425
specifies the criteria that must be met in
order to include lowest price technically
acceptable (LPTA) source selection
criteria in a solicitation; and requires
procurements predominantly for the
acquisition of certain services and
supplies to avoid the use of LPTA
source selection criteria, to the
maximum extent practicable.
DATES: Interested parties should submit
written comments to the Regulatory
Secretariat Division at one of the
addresses shown below on or before
December 2, 2019 to be considered in
the formation of the final rule.
ADDRESSES: Submit comments in
response to FAR Case 2018–016 by any
of the following methods:
• Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
searching for ‘‘FAR Case 2018–016’’.
Select the link ‘‘Comment Now’’ that
corresponds with ‘‘FAR Case 2018–
016’’. Follow the instructions provided
on the screen. Please include your
name, company name (if any), and
‘‘FAR Case 2018–016’’ on your attached
document.
• Mail: General Services
Administration, Regulatory Secretariat
Division (MVCB), ATTN: Lois Mandell,
1800 F Street NW, 2nd Floor,
Washington, DC 20405.
Instructions: Please submit comments
only and cite ‘‘FAR Case 2018–016’’, in
all correspondence related to this case.
All comments received will be posted
without change to https://
www.regulations.gov, including any
personal and/or business confidential
information provided. To confirm
receipt of your comment(s), please
check www.regulations.gov,
approximately two to three days after
submission to verify posting (except
allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Mr.
Michael O. Jackson, Procurement
Analyst, at 202–208–4949 or
michaelo.jackson@gsa.gov for
clarification of content. For information
pertaining to status or publication
schedules, contact the Regulatory
Secretariat Division at 202–501–4755.
Please cite ‘‘FAR Case 2018–016’’.
SUPPLEMENTARY INFORMATION:
I. Background
Section 880 of the John S. McCain
National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2019 (Pub.
L. 115–232, 41 U.S.C. 3701 Note) makes
it the policy of the Government to avoid
using Lowest Price Technically
Acceptable (LPTA) source selection
criteria in circumstances that would
E:\FR\FM\02OCP1.SGM
02OCP1
]]>Agencies
[Federal Register Volume 84, Number 191 (Wednesday, October 2, 2019)]
[Proposed Rules]
[Pages 52420-52425]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20796]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 2, 9, 13, 16, 19, 22, 25, and 52
[FAR Case 2018-004; Docket No. FAR-2018-0011, Sequence No. 1]
RIN 9000-AN65
Federal Acquisition Regulation: Increased Micro-Purchase and
Simplified Acquisition Thresholds; 2018-004
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are proposing to amend the Federal
Acquisition Regulation (FAR) to implement a section of the National
Defense Authorization Act (NDAA) for Fiscal Year (FY) 2017 and several
sections of the NDAA for FY 2018 that increase the micro-purchase
threshold (MPT), increase the simplified acquisition threshold (SAT),
and clarify certain procurement terms, as well as align some non-
statutory thresholds with the MPT and SAT.
DATES: Interested parties should submit comments to the Regulatory
Secretariat Division at one of the addresses shown below on or before
December 2, 2019 to be considered in the formulation of a final rule.
ADDRESSES: Submit comments in response to FAR Case 2018-004 by any of
the following methods:
Regulations.gov: https://www.regulations.gov. Submit
comments via the Federal eRulemaking portal by searching for ``FAR Case
2018-004''. Select the link ``Comment Now'' that corresponds with ``FAR
Case 2018-004.'' Follow the instructions provided on the screen. Please
include your name, company name (if any), and ``FAR Case 2018-004'' on
your attached document.
Mail: General Services Administration, Regulatory
Secretariat Division (MVCB), ATTN: Lois Mandell, 1800 F Street NW, 2nd
floor, Washington, DC 20405.
Instructions: Please submit comments only and cite ``FAR case 2018-
004'' in all correspondence related to this case. All comments received
will be posted without change to https://www.regulations.gov, including
any personal and/or business confidential information provided. To
confirm receipt of your comment(s), please check https://www.regulations.gov, approximately two to three days after submission
to verify posting (except allow 30 days for posting of comments
submitted by mail).
FOR FURTHER INFORMATION CONTACT: Mr. Michael O. Jackson, Procurement
Analyst, at 202-208-4949 or [email protected] for clarification
of content. For information pertaining to status or publication
schedules, contact the Regulatory Secretariat Division at 202-501-4755.
Please cite ``FAR Case 2018-004''.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA are proposing to amend the FAR to implement
section 217(b) of the NDAA for FY 2017 (Pub. L. 114-328) and sections
805, 806, and 1702(a) of the NDAA for FY 2018 (Pub. L. 115-91). The
proposed rule will also replace non-statutory, stated dollar thresholds
that are intended to correspond with the MPT and SAT, with the text
``micro-purchase threshold'' and ``simplified acquisition threshold.''
Referencing some stated thresholds by name instead of by a specific
dollar value will ease maintenance of regulations, given the likelihood
of future changes to the threshold amounts. Text clarifying the use of
the approval thresholds, based on the increase of the SAT, for sole
source justifications executed under the simplified procedures for
certain commercial items has been added to subpart 13.5.
Section 217(b) amends 41 U.S.C. 1902 to increase the MPT for
acquisitions from institutions of higher education or related or
affiliated nonprofit entities, or from nonprofit research organizations
or independent research institutes, from $3,500 to $10,000, or a higher
amount as determined appropriate by the head of the agency and
consistent with clean audit findings under 31 U.S.C. Chapter 75, an
internal institutional risk assessment, or State law.
Section 806 increases the MPT in 41 U.S.C. 1902(a) to $10,000.
Section 805 increases the SAT to $250,000.
[[Page 52421]]
Section 1702(a) amends section 15(j)(1) of the Small Business Act
(15 U.S.C. 644(j)(1)) to replace specific dollar thresholds with the
terms ``micro-purchase threshold'' and ``simplified acquisition
threshold.''
II. Discussion and Analysis
This rule proposes to amend the FAR, as follows:
At FAR Part 2, to--
[cir] Replace ``$3,500'' with ``$10,000'' and add an exception to
the MPT for acquisitions from institutions of higher education or
related or affiliated nonprofit entities, nonprofit research
organizations, or independent research institutes, at the definition of
``micro-purchase threshold'' and,
[cir] Replace ``$150,000'' with ``$250,000'' at the definition of
``simplified acquisition threshold.''
At FAR Part 3, to replace ``simplified acquisition
threshold'' with ``$150,000'' at 3.502-3 to conform to 3.502-2(i).
At FAR part 9, to replace ``$3,500'' with ``$10,000'' as
the Federal tax delinquency threshold, at 9.406-2(b)(1)(v) replaces
``$3,500'' with ``the threshold at FAR 9.104-5(a)(2)'' and at 9.407-
2(a)(7) replaces ``$3,500'' with ``the threshold at FAR 9.104-
5(a)(2)''. When an offeror indicates in its representations and
certifications a delinquency in excess of the threshold, a contracting
officer must report that information to the agency's suspending or
debarring official, and, a suspending or debarring official may suspend
or debar a contractor for delinquent Federal taxes in excess of the
threshold.
At FAR part 13, to replace ``$3,500'' with ``the micro-
purchase threshold'' and ``$150,000'' with ``the simplified acquisition
threshold'' when addressing the thresholds for acquisitions that are
reserved exclusively for small business concerns;
[cir] At FAR 13.005, List of laws inapplicable to contracts and
subcontracts at or below the simplified acquisition threshold, there is
an impact of this increase in the SAT. This list was first required by
section 4101 of FASA (Pub. L. 103-355), now codified at 41 U.S.C. 1906.
FASA sections 4102-4104 made certain laws inapplicable below the SAT,
and made other laws inapplicable below $100,000. At the time, these two
thresholds were of equivalent value, so there was no problem with
listing all of them at FAR 13.005. Intervening escalation raised all of
these thresholds to $150,000. However, now that the SAT has been
increased to $250,000, those thresholds that were set at a dollar value
rather than at the SAT, are not increasing to $250,000. Therefore, the
following laws should be removed from the list at FAR 13.005:
13.005(a)(1), (a)(2), (a)(3), and (a)(5);
[cir] At FAR 13.501(a)(2) to clarify the procedures to be used for
justifications of other than full and open competition, when the
simplified acquisition threshold is raised, e.g., for contingency
operations.
At FAR part 16, to replace ``$150,000'' with ``the
simplified acquisition threshold'' when addressing the maximum
threshold for fixed-ceiling-price contracts with retroactive price
redetermination and the maximum threshold for firm-fixed-price, level-
of-effort term contracts, without higher level approval.
At FAR part 19, to replace ``$3,500'' with ``the micro-
purchase threshold'' and/or ``$150,000'' with ``the simplified
acquisition threshold'' when addressing set-aside requirements, and
inserting the clause for FAR 52.219-14, Limitations on Subcontracting.
At FAR part 22, specifically, 22.1803, replace ``the
simplified acquisition threshold'' with ``$150,000.''
At FAR part 25, to replace ``$3,500'' with ``10,000'' as
the ``significant transaction'' amount an offeror may not exceed when
engaging with Iran's Revolutionary Guard Corps or any of its officials,
agents, or affiliates.
At FAR part 52, to--
[cir] Replace ``$3,500'' with ``the threshold at 9.104-5(a)(2)'' at
FAR 52.209-5(a)(1)(i)(D) and FAR 52.212-3(h)(4);
[cir] Replace ``$150,000'' with the ``simplified acquisition
threshold'' as the subcontractor flow-down threshold for FAR 52.203-16,
Preventing Personal Conflicts of Interest;
[cir] Replace ``$3,500'' with ``the micro-purchase threshold'' as
the threshold an offer must exceed, unless otherwise required, for the
offeror to be required to provide its unique entity identifier, as
stated in paragraph (j) of FAR provision 52.212-1, Instruction to
Offerors--Commercial Items;
[cir] Replace the threshold an offeror must certify, in paragraph
(o)(2)(iii) of FAR 52.212-3, and FAR 52.225-25, Prohibition on
Contracting with Entities Engaging in Certain Activities or
Transactions Relating to Iran--Representation and Certifications, it
has not exceeded when engaging with Iran's Revolutionary Guard Corps or
any of its officials, agents, or affiliates. The clause title of FAR
52.225-25 is also corrected. The threshold will be that at FAR 25.703-
2(a)(2);
[cir] Replace ``$150,000'' with ``the simplified acquisition
threshold'' as the threshold a subcontract award must exceed in order
for a contractor to be required to keep records on the corresponding
subcontract solicitation, as identified in FAR clause 52.219-9, Small
Business Subcontracting Plan and its Alternate IV.
III. Expected Impact of the Proposed Rule and Proposed Cost Savings
This rule impacts any business, large or small, that prepares
quotes exceeding $3,500 ($5,000 for DoD) and not exceeding $10,000 (or
higher for select educational institutions); proposals exceeding
$150,000 and not exceeding $250,000; and proposals exceeding $300,000
and not exceeding $500,000, in support of humanitarian or peacekeeping
operations. This rule does not add any new solicitation provisions or
contract clauses. Rather, it reduces burden on contractors by
increasing the thresholds at which various regulatory burdens apply.
Increasing the MPT and SAT means additional awards could be made
under the MPT and additional awards could be made under the SAT. The
additional awards at or below the MPT would not require provisions or
clauses, except as provided in FAR 13.202 and FAR 32.1110, and the
additional awards at or below the SAT would be awarded without
provisions and clauses which are prescribed only above the SAT. In
addition to including fewer regulations in applicable awards, the
proposed rule would allow for more awards based on quotes in lieu of a
formal proposal, thereby reducing the contractor's bid and proposal
costs. Costs associated with contractor financing could also be reduced
by increasing the number of micro-purchases, for which the
Governmentwide purchase card is the preferred method of purchase and
payment (see FAR 13.201(b)).
To determine the dollar amounts and entities affected, data was
pulled from the Federal Procurement Data System (FPDS) from fiscal
years 2015-2018. For the micro-purchase value change, there was an
annual average in total impacted contract awards of $2,442,317 for
small businesses and $1,359,916 for other than small businesses for
contracts with values exceeding $3,500 ($5,000 for DOD), but less than
or equal to $10,000 (or higher, for educational institutions). For the
simplified acquisition threshold change, there was an annual average in
total impacted contract awards of $300,073,039 for small businesses and
$161,715,144 for other than small businesses for contracts with values
exceeding $150,000, but less than or equal to $250,000 (from $300,000
to $500,000 for contingency, humanitarian, or peacekeeping awards).
[[Page 52422]]
Commercial item awards, as well as orders placed through
indefinite-quantity contract orders and other large contracting
schedule orders, were removed from this calculation to determine the
cost reduction on offerors and contractors. Commercial items were
removed from this calculation because the simplified threshold for
commercial item awards is set at $7 million, so the increased SAT
threshold would not impact compliance or business procedures for
contractors with awards conducted through commercial item procedures.
To calculate the burden reduction on Government by raising these
thresholds, indefinite-quantity contracts were included, as the
threshold changes would impact Government acquisition procedures.
The Federal Acquisition Streamlining Act (FASA) made a number of
laws inapplicable to items procured under the SAT. This was meant to
save both the Government and service providers money while also
expediting the entire contract process. When finalized, this rule will
decrease the number of regulatory requirements agencies need to include
in awards.
Because this rule will reduce bid and proposal costs and other
administrative burdens and since it does not implement any new
requirements on offerors, DoD, GSA, and NASA believe this rule to be
deregulatory.
Please see the Regulatory Cost Analysis narrative for an in-depth
discussion of data used to calculate the estimated reduced burden on
contractors and the Government. To access the full Regulatory Cost
Analysis for this rule, go to the Federal eRulemaking Portal at
www.regulations.gov, search for ``FAR Case 2018-004,'' click ``Open
Docket,'' and view ``Supporting Documents.'' The following is a summary
of the estimated public and Government cost savings calculated in
perpetuity in 2016 dollars at a 7-percent discount rate:
----------------------------------------------------------------------------------------------------------------
Summary Public Government Total
----------------------------------------------------------------------------------------------------------------
Present Value Costs........................... -$662,413,271 -$2,216,678,757 -$2,879,092,029
Annualized Costs.............................. -$46,368,929 -$155,167,513 -$201,536,442
Annualized Value Costs (as of 2016 if Year 1 -$37,850,858 -$126,662,911 -$164,513,770
is 2019).....................................
----------------------------------------------------------------------------------------------------------------
In an attempt to quantify savings as a result of this rule, DoD,
GSA, and NASA seek input from contractors that could be impacted by
this rule. In addition to the Government cost savings discussed in the
accompanying materials in the docket at www.regulations.gov, DoD, GSA,
and NASA welcome feedback on contract proposals and contract quotes
(but not quotes for a task order or delivery order) on--
1. The total bid and proposal (B&P) cost and the total number of
proposals in Fiscal Year (FY) 2018 for proposals greater than $150,000
and less than or equal to $250,000, including the hours expended in the
preparation of the proposals and personnel involved. If available, the
total cost related to compliance for awards greater than $150,000 and
less than or equal to $250,000 that could be eliminated by using
simplified acquisition procedures.
2. The total B&P cost and the total number of quotes in FY 2018 for
quotes less than or equal to $150,000, including the hours expended in
the preparation of the quotes and personnel involved.
3. The total B&P cost and the total number of quotes in FY18 for
quotes greater than $3,500 and less than or equal to $10,000, including
the hours expended in the preparation of the quotes and personnel
involved. If available, the total cost related to compliance for awards
greater than $3,500 and less than or equal to $10,000 that could be
eliminated by conducting a micro-purchase.
4. The total B&P cost and the total number of quotes in FY18 for
quotes less than or equal to $3,500, including the hours expended in
the preparation of the quotes and personnel involved.
IV. Applicability to Contracts at or Below the Simplified Acquisition
Threshold and for Commercial Items, Including Commercially Available
Off-the-Shelf (COTS) Items
The rule applies to contracts at or below the simplified
acquisition threshold, and to contracts for commercial items, including
COTS items. However, it does not add any new solicitation provisions or
contract clauses, and it reduces burden on contractors by increasing
the thresholds at which various regulatory burdens apply.
V. Executive Orders 12866 and 13563
Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess
all costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). E.O.
13563 emphasizes the importance of quantifying both costs and benefits,
of reducing costs, of harmonizing rules, and of promoting flexibility.
This is an economically significant regulatory action and, therefore,
was subject to review under section 6(b) of E.O. 12866, Regulatory
Planning and Review, dated September 30, 1993. This rule is a major
rule under 5 U.S.C. 804.
VI. Congressional Review Act
This proposed rule is subject to the Congressional Review Act
provisions of the Small Business Regulatory Enforcement Fairness Act of
1996 (5 U.S.C. 801 et seq.) and will, if finalized, be transmitted to
the Congress and to the Comptroller General for review in accordance
with such provisions.
VII. Executive Order 13771
This rule is subject to E.O. 13771 because this rule is an
economically significant regulatory action under E.O. 12866. As
explained in section III of this preamble and in the accompanying
documentation available in the docket at www.regulations.gov, DoD, GSA,
and NASA believe the rule is deregulatory and seek public input on this
preliminary determination as well as information that can better
quantify savings.
VIII. Regulatory Flexibility Act
DoD, GSA, and NASA expect this rule to have a positive significant
economic impact on a substantial number of small entities within the
meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. An
Initial Regulatory Flexibility Analysis (IRFA) has been performed and
is summarized as follows:
DoD, GSA, and NASA are proposing to amend the FAR to implement a
section of the NDAA for Fiscal Year (FY) 2017 and several sections
of the NDAA for FY 2018 that increase the MPT, increase the SAT,
clarify certain procurement terms, as well as align non-statutory
thresholds with the MPT and SAT.
The objective of the rule is to implement section 217(b) of the
NDAA for FY 2017 (Pub. L. 114-328) and sections 805, 806, and
[[Page 52423]]
1702(a) of the NDAA for FY 2018 (Pub. L. 115-91), as well as align
non-statutory, stated dollar thresholds that are intended to
correspond with the MPT and SAT, with word-based thresholds to
ensure continued alignment with the current increase to these
thresholds and any future change to the threshold amounts. DoD, GSA,
and NASA expect this rule to have a positive significant economic
impact on a substantial number of small entities within the meaning
of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.
According to data from the Federal Procurement Data System
(FPDS), there were 505 contracts awarded in FY 2018 with a value
exceeding $3,500 ($5,000 for DOD), but less than or equal to $10,000
wherein contractors would have a change in compliance requirements.
Of the 505 new awards, 358 (71 percent) of these actions were
awarded to 198 unique small business entities.
Data from FPDS also indicates that in FY 2018, there were no (0)
small business entities that had additional contract actions for
educational or related institutions for contracts with a value
exceeding $10,000, but less than or equal to $15,000 (equivalent to
the upper bound of the expected micro-purchase value for these types
of institutions) wherein contractors would have a change in
compliance requirements.
Data from FPDS also indicates there were 3,653 new contracts
awarded in FY 2018 with a value exceeding $150,000, but less than or
equal to $250,000 wherein contractors would have a change in
compliance requirements. Of these, 2,621 (72 percent) of these
actions were awarded to 1,680 unique small business entities.
As mentioned previously, commercial items were removed from this
calculation because the simplified threshold for commercial item
awards is set at $7 million, so the increased SAT threshold would
not impact compliance or business procedures for contractors with
awards conducted through commercial item procedures.
Data from the FPDS further indicates that for contingency,
humanitarian, or peacekeeping contract actions, there were 11 new
total contracts awarded in FY 2018 with a value exceeding $300,000
but less than or equal to $500,000 wherein contractors would have a
change in compliance requirements. Of these, 4 (36 percent) of these
actions were awarded to 4 unique small business entities.
This rule will also change the small-business set aside
threshold under FAR 19.502; instead of being from greater than
$3,500 to less than or equal to $150,000, the threshold will be from
greater than $10,000 to less than or equal to $250,000. This is
expected to increase the number of small business entities able to
do business with the Government; for contracts affected by this
threshold change, (please see full regulatory cost analysis for
explanation of excepted contract types), in FY 2018, there were
3,653 records exceeding $150,000 and less than or equal to $250,000,
while there were 505 records exceeding $3,500 ($5,000 for DOD) and
less than or equal to $10,000.
As of September 30, 2017, there were 637,791 active entity
registrations in SAM. Of those active entity registrations, 452,310
(71 percent) completed all four modules of the registration, in
accordance with the definition ``Registered in the System for Award
Management (SAM)'' at FAR 52.204-7(a), including Assertions (where
they enter their size metrics and select their NAICS Codes) and Reps
& Certs (where they certify to the information they provided and the
size indicator by NAICS).
Of the possible 452,310 active SAM entity registrations, 338,207
(75 percent) certified to meeting the size standard of small for
their primary NAICS Code. Therefore, this rule may be beneficial to
338,207 small business entities that submit solicitation responses
that may now fall under the MPT or SAT and have streamlined
procedures as a result of this rule.
The proposed rule applies to all entities who do business with
the Federal Government.
This proposed rule does not include any new reporting,
recordkeeping, or other compliance requirements. The rule reduces
burden on contractors by increasing the thresholds at which various
regulatory burdens begin to apply. The proposed rule does not
duplicate, overlap, or conflict with any other Federal rules. There
are no known significant alternative approaches to the proposed rule
that would meet the requirements of the applicable requirement.
The Regulatory Secretariat Division has submitted a copy of the
IRFA to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the IRFA may be obtained from the Regulatory
Secretariat Division. DoD, GSA, and NASA invite comments from small
business concerns and other interested parties on the expected impact
of this rule on small entities.
DoD, GSA, and NASA will also consider comments from small entities
concerning the existing regulations in subparts affected by the rule in
accordance with 5 U.S.C. 610. Interested parties must submit such
comments separately and should cite 5 U.S.C. 610 (FAR Case 2018-004),
in correspondence.
IX. Paperwork Reduction Act
The rule does not contain any information collection requirements
that require the approval of the Office of Management and Budget under
the Paperwork Reduction Act (44 U.S.C. chapter 35).
List of Subjects in 48 CFR Parts 2, 9, 13, 16, 19, 22, 25 and 52
Government procurement.
William F. Clark,
Director, Office of Government-wide Acquisition Policy, Office of
Acquisition Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 2, 9,
13, 16, 19, 22, 25, and 52 as set forth below:
0
1. The authority citation for 48 CFR parts 2, 9, 13, 16, 19, 22, 25,
and 52 continues to read as follows:
Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51
U.S.C. 20113.
PART 2--DEFINITIONS OF WORDS AND TERMS
0
2. Amend section 2.101, in paragraph (b) by--
0
a. In the definition ``Micro-purchase threshold'' removing from the
introductory text ``$3,500'' and adding ``$10,000'' in its place,
removing from paragraph (2) the word ``and'' at the end of the
sentence, removing from paragraph (3)(ii) ``States.'' and adding
``States; and'' in its place, and adding paragraph (4); and
0
b. In the definition ``Simplified acquisition threshold'' removing
from the introductory text ``$150,000'' and adding ``$250,000'' in its
place, and removing from paragraph (2) ``$300,000'' and adding
``$500,000'' in its place.
The addition reads as follows:
2.101 Definitions.
* * * * *
(b) * * *
Micro-purchase threshold * * *
(4) For acquisitions of supplies or services from institutions of
higher education (20 U.S.C. 1001(a)) or related or affiliated nonprofit
entities, or from nonprofit research organizations or independent
research institutes--
(i) $10,000; or
(ii) A higher threshold, as determined appropriate by the head of
the agency and consistent with clean audit findings under 31 U.S.C.
chapter 75, Requirements for Single Audits; an internal institutional
risk assessment; or State law.
* * * * *
PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
* * * * *
3.502-3 [Amended]
0
3. Amend section 3.502-3 by removing ``the simplified acquisition
threshold'' and adding ``$150,000'' in its place.
* * * * *
PART 9--CONTRACTOR QUALIFICATIONS
9.104-5 [Amended]
0
4. Amend section 9.104-5 by removing from paragraph (a)(2) ``$3,500''
and adding ``$10,000'' in its place.
[[Page 52424]]
9.406-2 [Amended]
0
5. Amend section 9.406-2 by removing from paragraph (b)(1)(v)
``$3,500'' and adding ``the threshold at 9.104-5(a)(2)'' in its place.
9.407-2 [Amended]
0
6. Amend section 9.407-2 by removing from paragraph (a)(7) ``$3,500''
and adding ``the threshold at 9.104-5(a)(2)'' in its place.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
0
7. Amend section 13.003 by revising paragraph (b)(1) to read as
follows:
13.003 Policy.
* * * * *
(b)(1) Acquisitions of supplies or services that have an
anticipated dollar value exceeding the micro-purchase threshold but not
exceeding the simplified acquisition threshold are reserved exclusively
for small business concerns and shall be set aside (see 19.000, 19.203,
and subpart 19.5).
* * * * *
0
8. Amend section 13.005 by revising paragraph (a) to read as follows:
13.005 List of laws inapplicable to contracts and subcontracts at or
below the simplified acquisition threshold.
(a) The following laws are inapplicable to all contracts and
subcontracts (if otherwise applicable to subcontracts) at or below the
simplified acquisition threshold pursuant to 41 U.S.C. 1905:
(1) 41 U.S.C. 8102(a)(1) (Drug-Free Workplace), except for
individuals.
(2) 10 U.S.C. 2306(b) and 41 U.S.C. 3901(b) (Contract Clause
Regarding Contingent Fees).
(3) 10 U.S.C. 2313 and 41 U.S.C. 4706 (Authority to Examine Books
and Records of Contractors).
(4) 10 U.S.C. 2402 and 41 U.S.C. 4704 (Prohibition on Limiting
Subcontractors Direct Sales to the United States).
(5) 15 U.S.C. 631 note (HUBZone Act of 1997), except for 15 U.S.C.
657a(b)(2)(B), which is optional for the agencies subject to the
requirements of the Act.
(6) 31 U.S.C. 1354(a) (Limitation on use of appropriated funds for
contracts with entities not meeting veterans employment reporting
requirements).
(7) 22 U.S.C. 2593e (Measures Against Persons Involved in
Activities that Violate Arms Control Treaties or Agreements with the
United States). (The requirement at 22 U.S.C. 2593e(c)(3)(B) to provide
a certification does not apply).
* * * * *
13.501 [Amended]
0
9. Amend section 13.501 by removing from paragraph (a)(2)(i)
``$150,000'' and adding ``the simplified acquisition threshold'' in its
place, and removing from paragraph (a)(2)(ii) ``$700,000'' and adding
``$700,000 or the thresholds in paragraph (1) of the definition of
simplified acquisition threshold in FAR 2.101,'' in its place.
PART 16--TYPES OF CONTRACTS
16.206-2 [Amended]
0
10. Amend section 16.206-2 by removing from the introductory text
``$150,000'' and adding ``the simplified acquisition threshold'' in its
place.
16.206-3 [Amended]
0
11. Amend section 16.206-3 by removing from paragraph (a) ``$150,000''
and adding ``the simplified acquisition threshold'' in its place.
16.207-3 [Amended]
0
12. Amend section 16.207-3 by removing from paragraph (d) ``$150,000''
and adding ``the simplified acquisition threshold'' in its place.
PART 19--SMALL BUSINESS PROGRAMS
0
13. Amend section 19.203 by revising paragraph (b) to read as follows:
19.203 Relationship among small business programs.
* * * * *
(b) At or below the simplified acquisition threshold. For
acquisitions of supplies or services that have an anticipated dollar
value exceeding the micro-purchase threshold, but not exceeding the
simplified acquisition threshold, the requirement at 19.502-2(a) to
exclusively reserve acquisitions for small business concerns does not
preclude the contracting officer from awarding a contract to a small
business under the 8(a) Program, HUBZone Program, SDVOSB Program, or
WOSB Program.
* * * * *
19.502-1 [Amended]
0
14. Amend section 19.502-1 by--
0
a. Removing from paragraph (b) ``of $3,500 or less ($20,000 or less for
acquisitions as described in 13.201(g)(1))'' and adding ``valued at or
below the micro-purchase threshold'' in its place, and
0
b. Removing ``Part 8'' in paragraph (b) and adding ``part 8'' in its
place.
0
15. Amend section 19.502-2 by--
0
a. Revising the second sentence in paragraph (a), and
0
b. Removing from paragraph (b) ``$150,000'' and adding ``the simplified
acquisition threshold'' in its place.
The revision reads as follows:
19.502-2 Total small business set-asides.
(a) * * * Each acquisition of supplies or services that has an
anticipated dollar value exceeding the micro-purchase threshold, but
not over the simplified acquisition threshold, is automatically
reserved exclusively for small business concerns and shall be set aside
for small business unless the contracting officer determines there is
not a reasonable expectation of obtaining offers from two or more
responsible small business concerns that are competitive in terms of
market prices, quality, and delivery. * * *
* * * * *
19.508 [Amended]
0
16. Amend section 19.508 by removing from paragraph (e) ``$150,000''
and adding ``the simplified acquisition threshold'' in its place.
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.1803 [Amended]
0
17. Amend section 22.1803 by removing from the introductory text ``the
simplified acquisition threshold'' and adding ``$150,000'' in its
place.
PART 25--FOREIGN ACQUISITION
25.703-2 [Amended]
0
18. Amend section 25.703-2 by removing from paragraph (a)(2) ``$3,500''
and adding ``$10,000'' in its place.
25.703-4 [Amended]
0
19. Amend section 25.703-4 by removing from paragraphs (c)(5)(ii),
(c)(7)(iii), and (c)(8)(iii) ``$3,500'' and adding ``the threshold at
25.703-2(a)(2)'' in its place, respectively.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
20. Amend section 52.203-16 by revising the date of the clause and
removing from paragraph (d)(1) ``$150,000'' and adding ``the simplified
acquisition threshold'' in its place.
The revision reads as follows:
52.203-16 Preventing Personal Conflicts of Interest.
* * * * *
Preventing Personal Conflicts of Interest (DATE)
* * * * *
[[Page 52425]]
0
21. Amend section 52.209-5 by revising the date of the provision and
removing from paragraph (a)(1)(i)(D) introductory text ``$3,500'' and
adding ``the threshold at 9.104-5(a)(2)'' in its place.
The revision reads as follows:
52.209-5 Certification Regarding Responsibility Matters.
* * * * *
Certification Regarding Responsibility Matters (DATE)
* * * * *
0
22. Amend section 52.212-1 by revising the date of the provision and
removing from paragraph (j) ``$3,500, and offers of $3,500'' and adding
``the micro-purchase threshold, and offers at the micro-purchase
threshold'' in its place.
The revision reads as follows:
52.212-1 Instructions to Offerors--Commercial Items.
* * * * *
Instructions to Offerors--Commercial Items (DATE)
* * * * *
0
23. Amend section 52.212-3 by--
0
(a) Revising the date of the provision;
0
(b) Removing from paragraph (h)(4) introductory text ``$3,500'' and
adding ``the threshold at 9.104-5(a)(2)'' in its place; and
0
(c) Removing from paragraph (o)(2)(iii) ``$3,500'' and adding ``the
threshold at 25.703-2(a)(2)'' in its place.
The revision reads as follows:
52.212-3 Offeror Representations and Certifications--Commercial
Items.
* * * * *
Offeror Representations and Certifications--Commercial Items (DATE)
* * * * *
0
24. Amend section 52.212-5 by--
0
(a) Revising the date of the clause;
0
(b) Removing from paragraph (b)(17)(i) ``(Aug 2018)'' and adding
``(DATE); and
0
(c) Removing from paragraph (b)(17)(v) ``(Aug 2018)'' and adding
``(DATE) in its place.
The revision reads as follows:
52.212-5 Contract Terms and Conditions Required To Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders--Commercial Items (DATE)
* * * * *
0
25. Amend section 52.219-9 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (d)(11)(iii) ``$150,000'' and adding ``the
simplified acquisition threshold'' in its place;
0
c. Revising the date of Alternate IV; and
0
d. In Alternate IV, removing from (d)(11)(iii) ``$150,000'' and adding
``the simplified acquisition threshold'' in its place.
The revisions read as follows:
52.219-9 Small Business Subcontracting Plan.
* * * * *
Small Business Subcontracting Plan (DATE)
* * * * *
Alternate IV (DATE). * * *
* * * * *
0
26. Amend section 52.225-25 by revising the provision title and date,
and removing from paragraph (c)(3) ``$3,500'' and adding ``the
threshold at 25.703-2(a)(2)'' in its place.
The revisions read as follows:
52.225-25 Prohibition on Contracting with Entities Engaging in
Certain Activities or Transactions Relating to Iran--Representation and
Certifications.
* * * * *
Prohibition on Contracting With Entities Engaging in Certain Activities
or Transactions Relating to Iran--Representation and Certifications
(DATE)
* * * * *
[FR Doc. 2019-20796 Filed 10-1-19; 8:45 am]
BILLING CODE 6820-EP-P
