Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds, 62485-62490 [2020-21690]
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Federal Register / Vol. 85, No. 192 / Friday, October 2, 2020 / Rules and Regulations
(see FAR 1.109). DoD, GSA, and NASA
are also using the same methodology to
change nonstatutory FAR acquisitionrelated thresholds for adjustment in
2020. This final rule will not have a
significant economic impact on a
substantial number of small entities.
William F. Clark,
Director, Office of Government-wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-wide Policy.
[FR Doc. 2020–21691 Filed 10–1–20; 8:45 am]
BILLING CODE 6820–EP–P
DEPARTMENT OF DEFENSE
GENERAL SERVICES
ADMINISTRATION
NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
48 CFR Parts 1, 2, 3, 5, 6, 8, 9, 10, 12,
13, 15, 16, 17, 19, 22, 26, 32, 36, 42, 50,
52, and 53
[FAC 2021–01, FAR Case 2019–013, Docket
No. FAR–2019–0013; Sequence No. 1]
RIN 9000–AN96
Federal Acquisition Regulation:
Inflation Adjustment of AcquisitionRelated Thresholds
Department of Defense (DoD),
General Services Administration (GSA),
and National Aeronautics and Space
Administration (NASA).
ACTION: Final rule.
AGENCY:
DoD, GSA, and NASA are
issuing a final rule amending the
Federal Acquisition Regulation (FAR) to
further implement the statute which
requires an adjustment every five years
of statutory acquisition-related
thresholds for inflation. The adjustment
uses the Consumer Price Index for all
urban consumers, and does not apply to
the Construction Wage Rate
Requirements statute (Davis-Bacon Act),
Service Contract Labor Standards
statute, and trade agreements
thresholds. DoD, GSA, and NASA are
also using the same methodology to
adjust nonstatutory FAR acquisitionrelated thresholds in 2020.
DATES: Effective: October 1, 2020.
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 FAC 2021–01, FAR Case
2019–013.
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SUMMARY:
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SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published a
proposed rule at 85 FR 39146 on June
30, 2020, to further implement 41 U.S.C.
1908. Section 1908 requires an
adjustment every five years (on October
1 of each year evenly divisible by five)
of statutory acquisition-related
thresholds for inflation, using the
Consumer Price Index (CPI) for all urban
consumers, except for the Construction
Wage Rate Requirements statute (DavisBacon Act), Service Contract Labor
Standards statute, and trade agreements
thresholds (see FAR 1.109). As a matter
of policy, DoD, GSA, and NASA are also
using the same methodology to adjust
nonstatutory FAR acquisition-related
thresholds on October 1, 2020.
The preamble to the proposed rule
contained detailed explanations of—
• What an acquisition-related
threshold is;
• What acquisition-related thresholds
are not subject to escalation adjustment
under this case;
• How the Defense Acquisition
Regulations Council and the Civilian
Agency Acquisition Council (Councils)
analyze statutory and non-statutory
acquisition-related thresholds; and
• The effect of this rule on the most
heavily used thresholds.
DoD, GSA, and NASA implemented
three rules that have reduced the
complexity and impact of the October 1,
2020, threshold adjustments throughout
the FAR. The changes implemented
through these rules significantly
reduced the number of cite-specific
inflation adjustments in the FAR and
associated matrix.
FAR Case 2018–004, published as a
final rule on July 2, 2020 (85 FR 40064)
implemented section 217(b) of the
National Defense Authorization Act
(NDAA) for Fiscal Year (FY) 2017 (Pub.
L. 114–328) and sections 805, 806, and
1702(a) of the NDAA for FY 2018 (Pub.
L. 115–91), to increase the micropurchase threshold (MPT) to $10,000
and simplified acquisition threshold
(SAT) to $250,000 throughout the FAR.
The case also changed some stated
dollar thresholds to text to ensure
continued alignment with the value
defined in FAR subpart 2.101.
FAR Case 2018–005, published as a
final rule on July 2, 2020 (85 FR 40071)
implemented section 811 of the NDAA
for FY 2018 that amended 10 U.S.C.
2306a, Cost or Pricing Data: Truth in
Negotiations and 41 U.S.C. 3502,
Required cost or pricing data and
certification. The case increased the
threshold for requesting certified cost or
pricing data from $750,000 to $2 million
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62485
for contracts entered into after June 30,
2018.
FAR Case 2018–007, published as a
final rule on May 6, 2020 (85 FR 27088)
implemented section 821 of the NDAA
for FY 2018 (Pub. L. 115–91) which
made inflation adjustments of statutory
acquisition-related thresholds under 41
U.S.C. 1908 applicable to existing
contracts and subcontracts that contain
the clause implementing section 821
and that are in effect on the date of the
adjustment. The case replaced
throughout FAR part 52 as appropriate,
numerical values based on the value of
the MPT or the SAT with the term
‘‘micro-purchase threshold’’ or
‘‘simplified acquisition threshold’’.
When such terms are used, there is a
reference to the definition in FAR 2.101.
In addition to the MPT and SAT,
numerical values for certain thresholds
have been replaced with a reference to
the applicable FAR text that specifies
the numerical threshold.
The following list identifies the
impact of this rule on heavily-used
thresholds.
• The micro-purchase threshold at
FAR 2.101 was raised to $10,000 by
statute (see FAR Case 2018–004). No
further increase to the basic threshold is
made at this time, as there has been
insufficient inflation. Paragraph 3(ii) of
the definition, for acquisitions to
support contingency operations or to
facilitate defense against certain attacks,
is increasing from $30,000 to $35,000.
• The simplified acquisition
threshold was changed to $250,000 by
statute (see FAR Case 2018–004). No
further increase in the basic threshold is
proposed, as there has been insufficient
inflation. Paragraph (1)(i) of the
definition for acquisitions to support
contingency operations or to facilitate
defense against certain attacks, is
increasing from $750,000 to $800,000.
• The preaward and post-award
notices (FAR part 5) remain at $25,000
because of trade agreements.
• The requirements for limiting
competition (FAR part 6) to eligible 8(a)
awards over $22 million is increased to
$25 million.
• The simplified procedures for
certain commercial items ceiling (FAR
13.500) is increased from $7 million to
$7.5 million. For acquisitions described
at 13.500(c), the ceiling is increasing
from $13.5 million to $15 million.
• The cost or pricing data threshold
(FAR 15.403–4) was increased by statute
from $750,000 to $2 million (see FAR
Case 2018–005) and is not increasing in
this case.
• The prime contractor
subcontracting plan (FAR 19.702)
threshold is increasing from $700,000 to
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$750,000, but the construction threshold
of $1.5 million will not change.
Standard Form 294 at General
Instruction 3 has a reference to
$700,000, which will be changed.
• The threshold for reporting first-tier
subcontract information including
executive compensation will not change
(FAR subpart 4.14 and 52.204–10).
This is the fourth review of FAR
acquisition-related thresholds since the
statute was passed on October 28, 2004
(section 807 of the Ronald W. Reagan
National Defense Authorization Act for
Fiscal Year 2005). The last review was
conducted under FAR case 2014–022
during FY 2015. The final rule under
that case was published in the Federal
Register on July 2, 2015 (80 FR 38293),
effective October 1, 2015.
Seven respondents submitted
comments on the proposed rule.
II. Discussion and Analysis
The Civilian Agency Acquisition
Council and the Defense Acquisition
Regulations Council (the Councils)
reviewed the comments in the
development of the final rule.
A. Summary of Significant Changes
Minor edits were made to the final
rule to account for baseline updates
caused by publication of other FAR
interim or final rules.
The proposed rule included some
thresholds that were very close but,
ultimately, did not reach the statutory
calculation formula amount. As a result,
the Councils have removed them from
the text of the final rule: FAR 9.405–2,
9.409, 13.402, $3,500 at 16.505(b),
19.1406(a)(2)(ii), 28.102–1 to 28.102–3,
and 42.1502(f). In one case, for FAR
50.102–3, the statutory calculation did
increase the threshold to $35 million,
but this is lower than the value
published in the proposed rule.
Some thresholds were inadvertently
omitted, but are now included because
they did reach the statutory calculation
formula amount: 16.503(d), 19.804–6,
19.1506, 52.209–12, 52.222–50, and
52.222–56.
The FAR text also makes a correction
to 52.222–50(i)(1). The paragraphs
marked as (A) and (B) have been
corrected to (i) and (ii), respectively.
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B. Analysis of Public Comments
A discussion of the comments is
provided as follows:
Comment: A respondent stated that
there appeared to be an error in the
proposed rule with a reference to FAR
42.709–0, as the current FAR has no
42.709–0; and did we mean the
reference to 42.709–6 to be 42.709–7.
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Response: The proposed rule
contained the correct section numbering
for sections 42.709–0 through 42.709–6.
The Acquisition.Gov website reflected
incorrect references, however, the
Electronic Code of Federal Regulations
reflected the correct FAR text.
Comment: A respondent asked why
FAR 19.804–6 and 19.1506 did not
appear in the proposed rule.
Response: These were inadvertently
omitted. The required statutory changes
now appear in the final rule.
Comment: A respondent stated it is
unclear why the existing thresholds at
FAR 19.1406(a)(2)(i) and 19.1506(c)(1)(i)
are different than those established
under FAR 19.805–1. The respondent
stated that prior to 2006, FAR 19.805–
1, 19.1306, and 19.1406 appear to have
been identical (or similar) and one
would assume that if these thresholds
were adjusted based on the CPI, they
would remain the same.
Response: The thresholds at FAR
19.1406(a)(2)(i), 19.1506(c)(1)(i), and
19.805–1 were established by different
statutes. The calculations are set by 41
U.S.C. 1908, and are based on the
enactment date of the underlying
statute. The calculation for FAR
19.1406(a)(2) is based on a statute
enacted December 16, 2003; paragraph
(a)(2)(i) will increase to $7 million, but
paragraph (a)(2)(ii) was not sufficient for
that threshold to change in the final
rule, and will remain at $4 million. FAR
19.1506(c)(1)(i) and (ii) are subject to the
inflation statute, but were inadvertently
omitted from the proposed rule; they
appear in the final rule with increased
thresholds of $7 million and $4.5
million. The calculation for FAR
19.805–1 and 19.1306 were based on
statutes enacted before October 1, 2000.
For more information on the
calculations please see FAR 1.109 and
the matrix referenced there.
Comment: A respondent
recommended that the Miller Act
threshold be raised to $250,000 to be in
line with the increase of the SAT to
$250,000.
Response: There is no statute allowing
this.
Comment: Two respondents stated
that the $35,000 payment bond
thresholds at FAR 28.102–1(b)(1),
28.102–2(c), and 28.102–3(b) should not
be increased, as (1) they are not
acquisition-related thresholds, instead
being closer to ‘‘required levels of
insurance’’, and (2) the increase would
harm small business by increasing the
risk of nonpayment by prime
contractors.
Response: These thresholds are not
increasing in the final rule because they
did not reach the statutory calculation
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formula amount (see Section II.A. of this
preamble). In regard to whether bond
thresholds are considered acquisitionrelated thresholds, the Councils disagree
with the commenter’s assertion that the
thresholds are ‘‘required levels of
insurance’’. The application of payment
bond requirements are specific to a
particular contract, however required
levels of insurance apply more generally
to a particular contractor. An example of
a required level of insurance can be
found at FAR 28.307–2, such as
worker’s compensation insurance which
is required at $100,000. In regard to the
comment that the increase will harm
small business, this is a policy matter
which does not override the statutory
requirement to apply the inflation
increase to acquisition-related statutory
thresholds. These particular thresholds
have increased in previous FAR
inflation cases, to include the most
recent FAR case 2014–022, from the
$25,000 found in 40 U.S.C. 3132 to the
current FAR amount of $35,000.
Comment: A respondent expressed
general support for the rule.
Response: The support is noted.
III. Applicability to Contracts at or
Below the Simplified Acquisition
Threshold (SAT) and for Commercial
Items, Including Commercially
Available Off-the-Shelf (COTS) Items
This final rule does not create any
new provisions or clauses, nor does it
change the applicability or burden of
any existing provisions or clauses
included in solicitations and contracts
valued at or below the SAT, or for
commercial items, including COTS
items, except for the changes in the
thresholds themselves.
IV. 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 not a significant
regulatory action and, therefore, was not
subject to review under section 6(b) of
E.O. 12866, Regulatory Planning and
Review, dated September 30, 1993. This
rule is not a major rule under 5 U.S.C.
804.
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V. Executive Order 13771
The rule is not subject to E.O. 13771,
because this rule is not a significant
regulatory action under E.O. 12866.
VI. Regulatory Flexibility Act
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DoD, GSA, and NASA have prepared
a Final Regulatory Flexibility Analysis
(FRFA) consistent with the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq. The
FRFA is summarized as follows:
This final rule amends the Federal
Acquisition Regulation to implement 41
U.S.C. 1908 and to amend other acquisitionrelated dollar thresholds that are based on
policy rather than statute in order to adjust
for the changing value of the dollar. 41 U.S.C.
1908 requires adjustment every five years of
statutory acquisition-related dollar
thresholds, except for Construction Wage
Rate Requirements statute (Davis-Bacon Act),
Service Contract Labor Standards statute, and
trade agreements thresholds. While
reviewing all statutory acquisition-related
thresholds, this case presented an
opportunity to also review all nonstatutory
acquisition-related thresholds in the FAR
that are based on policy. The objective of the
case is to maintain the status quo, by
adjusting acquisition-related thresholds for
inflation.
There were no significant issues raised by
the public in response to the initial
regulatory flexibility analysis.
DoD, GSA, and NASA do not expect this
rule to have a 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. The threshold changes
in this rule are not expected to have any
significant economic impact on small
business concerns because the threshold
changes are intended to maintain the status
quo by adjusting for changes in the value of
the dollar. Often any impact will be
beneficial, by preventing burdensome
requirements from applying to more and
more acquisitions, as the dollar loses value.
One threshold change in this rule which
may impact small business concerns is the
increase of the threshold for requiring a
justification or determination for sole source
8(a) awards made pursuant to FAR 6.303–1
from $22 million to $25 million. This
threshold increase is expected to benefit
small businesses under the 8(a) program by
expanding their access to contract
opportunities. To assess the impact of the
increase, data was requested from the Federal
Procurement Data System. For FY 2017
through FY 2019, there was an average of 300
contracts and calls/orders between $22
million and $25 million. Of these actions, an
average of 134 went to small business
concerns, 27 of which were 8(a) program
participants. We expect that many of these
awards will still go to small business
concerns and potentially increase the number
of awards to 8(a) program participants.
This rule does not include any new
reporting, recordkeeping, or other
compliance requirements on any small
entities.
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There are no known significant alternative
approaches to the rule that would meet the
stated objectives of the applicable statute.
Interested parties may obtain a copy
of the FRFA from the Regulatory
Secretariat Division. The Regulatory
Secretariat Division has submitted a
copy of the FRFA to the Chief Counsel
for Advocacy of the Small Business
Administration.
VII. Paperwork Reduction Act
PART 3—IMPROPER BUSINESS
PRACTICES AND PERSONAL
CONFLICTS OF INTEREST
3.1004
4. Amend section 3.1004 by removing
from paragraphs (a), (b)(1)(i), and (b)(3)
‘‘$5.5 million’’ and adding ‘‘$6 million’’
in their places, respectively.
PART 5—PUBLICIZING CONTRACT
ACTIONS
5.303
List of Subjects in 48 CFR Parts 1, 2, 3,
5, 6, 8, 9, 10, 12, 13, 15, 16, 17, 19, 22,
26, 32, 36, 42, 50, 52, and 53
6.204
William F. Clark,
Director, Office of Government-wide
Acquisition Policy, Office of Acquisition
Policy, Office of Government-wide Policy.
Therefore, DoD, GSA, and NASA
amend 48 CFR parts 1, 2, 3, 5, 6, 8, 9,
10, 12, 13, 15, 16, 17, 19, 22, 26, 32, 36,
42, 50, 52, and 53 as set forth below:
1. The authority citation for 48 CFR
parts 1, 2, 3, 5, 6, 8, 9, 10, 12, 13, 15,
16, 17, 19, 22, 26, 32, 36, 42, 50, 52, and
53 continues to read as follows:
■
Authority: 40 U.S.C. 121(c); 10 U.S.C.
chapter 137; and 51 U.S.C. 20113.
PART 1—FEDERAL ACQUISITION
REGULATIONS SYSTEM
1.109
[Amended]
2. Amend section 1.109, in paragraph
(e) by removing ‘‘2014–022’’ and adding
‘‘2019–013’’ in its place.
■
2.101
[Amended]
3. Amend section 2.101, in paragraph
(b)(2) by—
■ a. In the definition ‘‘Major system’’,
removing from paragraph (2) ‘‘$ 2
million’’ and adding ‘‘$2.5 million’’ in
its place;
■ b. In the definition ‘‘Micro-purchase
threshold’’, removing from paragraph
(3)(ii) ‘‘$30,000’’ and adding ‘‘$35,000’’
in its place; and
■ c. In the definition ‘‘Simplified
acquisition threshold’’, removing from
paragraph (1)(i) ‘‘$750,000’’ and adding
‘‘$800,000’’ in its place.
■
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[Amended]
5. Amend section 5.303 in paragraph
(a) by removing ‘‘$4 million’’ and
adding ‘‘$4.5 million’’ in its place.
■
PART 6—COMPETITION
REQUIREMENTS
[Amended]
6. Amend section 6.204 in paragraph
(b) by removing ‘‘$22 million’’ and
adding ‘‘$25 million’’ in its place.
■
6.302–5
[Amended]
7. Amend section 6.302–5 by—
a. Removing from paragraph (b)(4)
‘‘$22 million. (See subpart 19.8.)’’ and
adding ‘‘$25 million. (See subpart
19.8.)’’ in its place; and
■ b. Removing from paragraph (c)(2)(iii)
‘‘$22 million’’ and adding ‘‘$25 million’’
in its place.
■
■
6.303–1
[Amended]
8. Amend section 6.303–1 in
paragraph (b) introductory text by
removing ‘‘$22 million’’ and adding
‘‘$25 million’’ in its place.
■
6.303–2
[Amended]
9. Amend section 6.303–2 by
removing from the introductory text of
paragraphs (b) and (d) ‘‘$22 million’’
and adding ‘‘$25 million’’ in their
places, respectively.
■
6.304
PART 2—DEFINITIONS OF WORDS
AND TERMS
[Amended]
■
The Paperwork Reduction Act (44
U.S.C. chapter 35) does apply; however,
these changes to the FAR do not impose
additional information collection
requirements to the paperwork burden
previously approved under OMB
Control numbers: 9000–0006, 9000–
0007, 1250–0004, and 1293–0005.
Government Procurement.
62487
[Amended]
10. Amend section 6.304 by—
a. Removing from paragraph (a)(1)
‘‘$700,000’’ and adding ‘‘$750,000’’ in
its place;
■ b. Removing from paragraph (a)(2)
‘‘$700,000’’ and ‘‘$13.5 million’’ and
adding ‘‘$750,000’’ and ‘‘$15 million’’ in
their places, respectively;
■ c. Removing from paragraph (a)(3)
introductory text ‘‘$13.5 million’’, ‘‘$68
million’’, and ‘‘$93 million’’ and adding
‘‘$15 million’’, ‘‘$75 million’’, and
‘‘$100 million’’ in their places,
respectively; and
■ d. Removing from paragraph (a)(4)
‘‘$68 million’’ and ‘‘$93 million’’ and
adding ‘‘$75 million’’ and ‘‘$100
million’’ in their places, respectively.
■
■
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PART 8—REQUIRED SOURCES OF
SUPPLIES AND SERVICES
PART 12—ACQUISITION OF
COMMERCIAL ITEMS
8.404
12.102
[Amended]
11. Amend section 8.404 in paragraph
(b)(2) by removing ‘‘$550,000’’ and
adding ‘‘$600,000’’ in its place.
■
8.405–3
[Amended]
12. Amend section 8.405–3 by—
a. Removing from paragraph (a)(3)(ii)
introductory text ‘‘$112 million’’ and
adding ‘‘$100 million’’ in its place;
■ b. Removing from paragraph (a)(3)(iii)
‘‘$112 million’’ and adding ‘‘$100
million’’ in its place; and
■ c. Removing from paragraph (a)(7)(v)
‘‘$112 million’’ and adding ‘‘$100
million’’ in its place.
■
■
8.405–6
12.203
[Amended]
19. Amend section 12.203 by
removing ‘‘$7 million ($13 million’’ and
adding ‘‘$7.5 million ($15 million’’ in
its place.
■
PART 13—SIMPLIFIED ACQUISITION
PROCEDURES
[Amended]
13. Amend section 8.405–6 by—
a. Removing from paragraph (d)(1)
‘‘$700,000’’ and adding ‘‘$750,000’’ in
its place;
■ b. Removing from paragraph (d)(2)
‘‘$700,000’’ and ‘‘$13.5 million’’ and
adding ‘‘$750,000’’ and ‘‘$15 million’’ in
their places, respectively;
■ c. Removing from paragraph (d)(3)
introductory text ‘‘$13.5 million’’, ‘‘$68
million’’, and ‘‘$93 million’’ and adding
‘‘$15 million’’, ‘‘$75 million’’, and
‘‘$100 million’’ in their places,
respectively; and
■ d. Removing from paragraph (d)(4)
‘‘$68 million’’ and ‘‘$93 million’’ and
adding ‘‘$75 million’’ and ‘‘$100
million’’ in their places, respectively.
PART 15—CONTRACTING BY
NEGOTIATION
15.403–1
15.404–3
13.000
[Amended]
20. Amend section 13.000 by
removing ‘‘$7 million ($13 million’’ and
adding ‘‘$7.5 million ($15 million’’ in
its place.
13.003
[Amended]
21. Amend section 13.003 by
removing from paragraphs (c)(1)(ii) and
(g)(2) ‘‘$7 million ($13 million’’ and
adding ‘‘$7.5 million ($15 million’’ in
their places, respectively.
15.408
[Amended]
22. Amend section 13.201 in
paragraph (g)(1)(ii) by removing
‘‘$30,000’’ and adding ‘‘$35,000’’ in its
place.
PART 16—TYPES OF CONTRACTS
16.503
[Amended]
9.104–7
13.500
■
■
[Amended]
[Amended]
■
■
24. Amend section 13.500 by—
a. Removing from paragraph (a) ‘‘$7
million ($13 million’’ and adding ‘‘$7.5
million ($15 million’’ in its place; and
■ b. Removing from paragraph (c)
introductory text ‘‘$13 million’’ and
adding ‘‘$15 million’’ in its place.
15. Amend section 9.104–7 by—
a. Removing from paragraphs (b) and
(c)(1) ‘‘$550,000’’ and adding
‘‘$600,000’’ in their places, respectively;
and
■ b. Removing from paragraph (e)
‘‘$5,000,000’’ and adding ‘‘$5.5 million’’
in its place.
■
■
PART 10—MARKET RESEARCH
■
■
■
■
10.001
[Amended]
16. Amend section 10.001 in
paragraph (d) by removing ‘‘$5.5
million’’ and adding ‘‘$6 million’’ in its
place.
■
10.003
[Amended]
17. Amend section 10.003 by
removing ‘‘$5.5 million’’ and adding
‘‘$6 million’’ in its place.
■
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[Amended]
13.501
[Amended]
25. Amend section 13.501 by—
a. Removing from paragraph (a)(2)(i)
‘‘$700,000’’ and adding ‘‘$750,000’’ in
its place;
■ b. Removing from paragraph (a)(2)(ii)
‘‘$700,000’’ and ‘‘$13.5 million’’ and
adding ‘‘$750,000’’ and ‘‘$15 million’’ in
their places, respectively;
■ c. Removing from paragraph (a)(2)(iii)
‘‘$13.5 million’’, ‘‘$68 million’’, and
‘‘$93 million’’ and adding ‘‘$15
million’’, ‘‘$75 million’’, and ‘‘$100
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[Amended]
30. Amend section 16.503 by—
a. Removing from paragraph (b)(2)
‘‘$112 million’’ and adding ‘‘$100
million’’ in its place; and
■ b. Removing from paragraph (d)(1)
‘‘$13.5 million’’ and adding ‘‘$15
million’’ in its place.
14. Amend section 9.104–5 in
paragraph (c) by removing ‘‘$5,000,000’’
and adding ‘‘$5.5 million’’ in its place.
■
[Amended]
29. Amend section 15.408, in Table
15–2, section II, paragraph A.(2) by
removing ‘‘$13.5 million’’ and adding
‘‘$15 million’’ in its place.
■
■
13.303–5
[Amended]
28. Amend section 15.407–2 by
removing from paragraphs (c)(1) and
(c)(2) introductory text ‘‘$13.5 million’’
and adding ‘‘$15 million’’ in their
places, respectively.
■
■
13.201
15.407–2
■
■
9.104–5
[Amended]
27. Amend section 15.404–3 in
paragraph (c)(1)(i) by removing ‘‘$13.5
million’’ and adding ‘‘$15 million’’ in
its place.
23. Amend section 13.303–5 by—
a. Removing from paragraph (b)(1) ‘‘$7
million’’ and ‘‘$13 million’’ and adding
‘‘$7.5 million’’ and ‘‘$15 million’’ in
their places, respectively; and
■ b. Removing from paragraph (b)(2) ‘‘$7
million ($13 million’’ and adding ‘‘$7.5
million ($15 million’’ in its place.
PART 9—CONTRACTOR
QUALIFICATIONS
[Amended]
26. Amend section 15.403–1 in
paragraph (c)(3)(iv) by removing ‘‘$19
million’’ and adding ‘‘$20 million’’ in
its place.
■
■
■
■
■
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[Amended]
18. Amend section 12.102 in
paragraph (f)(2) by removing ‘‘$19
million’’ and adding ‘‘$20 million’’ in
its place.
■
million’’ in their places, respectively;
and
■ d. Removing from paragraph (a)(2)(iv)
‘‘$68 million’’ and ‘‘$93 million’’ and
adding ‘‘$75 million’’ and ‘‘$100
million’’ in their places, respectively.
16.504
[Amended]
31. Amend section 16.504 by—
a. Removing from paragraphs
(c)(1)(ii)(D)(1) and (D)(3) introductory
text, ‘‘$112 million’’ and adding ‘‘$100
million’’ in their places, respectively;
and
■ b. Removing from paragraph (c)(2)(i)
introductory text ‘‘$13.5 million’’ and
adding ‘‘$15 million’’ in its place.
16.505
[Amended]
32. Amend section 16.505 by—
a. Removing from paragraph (b)(1)(iv)
introductory text ‘‘$5.5 million’’
wherever it appears and adding ‘‘$6
million’’ in their places, respectively;
■ b. Removing from paragraph
(b)(2)(ii)(C)(1) ‘‘$700,000’’ and adding
‘‘$750,000’’ in its place;
■ c. Removing from paragraph
(b)(2)(ii)(C)(2) ‘‘$700,000’’ and ‘‘$13.5
million’’ and adding ‘‘$750,000’’ and
■
■
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‘‘$15 million’’ in their places,
respectively;
■ d. Removing from paragraph
(b)(2)(ii)(C)(3) introductory text ‘‘$13.5
million’’, ‘‘$68 million’’, and ‘‘$93
million’’ and adding ‘‘$15 million’’,
‘‘$75 million’’ and ‘‘$100 million’’ in
their places, respectively;
■ e. Removing from paragraph
(b)(2)(ii)(C)(4) ‘‘$68 million’’ and ‘‘$93
million’’ and adding ‘‘$75 million’’ and
‘‘$100 million’’ in their places,
respectively; and
■ f. Removing from paragraph (b)(6)
introductory text ‘‘$5.5 million’’
wherever it appears and adding ‘‘$6
million’’ in their places, respectively.
16.506
[Amended]
33. Amend section 16.506 by—
a. Removing from paragraphs (f) and
(g) ‘‘$13.5 million’’ and adding ‘‘$15
million’’ in their places, respectively;
and
■ b. Removing from paragraph (h) ‘‘$5.5
million’’ and adding ‘‘$6 million’’ in its
place.
■
■
PART 17—SPECIAL CONTRACTING
METHODS
17.108
26.404
19.805–1
■
[Amended]
40. Amend section 19.805–1 in
paragraph (a)(2) by removing ‘‘$7
million’’ and ‘‘$4 million’’ and adding
‘‘$7.5 million’’ and ‘‘$4.5 million’’ in
their places, respectively.
■
19.808–1
41. Amend section 19.808–1 in
paragraph (a) by removing ‘‘$22
million’’ and adding ‘‘$25 million’’ in
its place.
■
19.1306
[Amended]
35. Amend section 17.500 in
paragraph (c)(2) by removing
‘‘$550,000’’ and adding ‘‘$600,000’’ in
its place.
[Amended]
42. Amend section 19.1306 by—
a. Removing from paragraph (a)(2)(i)
‘‘$7 million’’ and adding ‘‘$7.5 million’’
in its place; and
■ b. Removing from paragraph (a)(2)(ii)
‘‘$4 million’’ and adding ‘‘$4.5 million’’
in its place.
■
■
[Amended]
22.1103
19.704
■
19.708
[Amended]
38. Amend section 19.708 in
paragraph (b)(1) introductory text by
removing ‘‘$700,000’’ and adding
‘‘$750,000’’ in its place.
■
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[Amended]
45. Amend section 22.1103 by
removing ‘‘$700,000’’ and adding
‘‘$750,000’’ in its place.
■
37. Amend section 19.704 by—
a. Removing from paragraph (a)
introductory text ‘‘plan’’ and adding
‘‘plan required’’ in its place; and
■ b. Removing from paragraph (a)(9)
‘‘$700,000’’ and adding ‘‘$750,000’’ in
its place.
[Amended]
50. Amend section 32.104 by
removing from paragraphs (d)(2)(i) and
(ii) ‘‘$2.5 million’’ and adding ‘‘$3
million’’ in their places, respectively.
PART 36—CONSTRUCTION AND
ARCHITECT-ENGINEER CONTRACTS
36.303–1
22.1701
[Amended]
46. Amend section 22.1701 in
paragraph (b)(2) by removing
‘‘$500,000’’ and adding ‘‘$550,000’’ in
its place.
22.1703
[Amended]
47. Amend section 22.1703 by
removing from paragraphs (c)(1)(i)(B)
and (c)(3)(i)(B) ‘‘$500,000’’ and adding
‘‘$550,000’’ in their places, respectively.
■
22.1705
[Amended]
48. Amend section 22.1705 in
paragraph (b)(1) by removing
■
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[Amended]
51. Amend section 36.303–1 in
paragraph (a)(4) by removing ‘‘$4
million’’ and adding ‘‘$4.5 million’’ in
its place.
■
PART 42—CONTRACT
ADMINISTRATION AND AUDIT
SERVICES
42.709–6
[Amended]
44. Amend section 19.1506 by—
a. Removing from paragraph (c)(1)(i)
‘‘$6.5 million’’ and adding ‘‘$7 million’’
in its place; and
■ b. Removing from paragraph (c)(1)(ii)
‘‘$4 million’’ and adding ‘‘$4.5 million’’
in its place.
36. Amend section 19.702 by
removing from paragraphs (a)(1)(i)
through (iii) ‘‘$700,000’’ and adding
‘‘$750,000’’ in their places, respectively.
■
■
32.104
19.1506
19.702
[Amended]
PART 32—CONTRACT FINANCING
42.709–0
PART 22—APPLICATION OF LABOR
LAWS TO GOVERNMENT
ACQUISITIONS
[Amended]
[Amended]
49. Amend section 26.404 by
removing ‘‘$25,000’’ and adding
‘‘$30,000’’ in its place.
43. Amend section 19.1406 by
removing from paragraph (a)(2)(i) ‘‘$6.5
million’’ and adding ‘‘$7 million’’ in its
place.
PART 19—SMALL BUSINESS
PROGRAMS
■
PART 26—OTHER SOCIOECONOMIC
PROGRAMS
■
[Amended]
■
■
■
‘‘$500,000’’ and adding ‘‘$550,000’’ in
its place.
39. Amend section 19.804–6 in
paragraph (c)(2) by removing ‘‘$7
million’’ and ‘‘$4 million’’ and adding
‘‘$7.5 million’’ and ‘‘$4.5 million’’ in
their places, respectively.
■
34. Amend section 17.108 by—
a. Removing from paragraph (a)
‘‘$13.5 million’’ and adding ‘‘$15
million’’ in its place; and
■ b. Removing from paragraph (b)
‘‘$135.5 million’’ and adding ‘‘$150
million’’ in its place.
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[Amended]
■
19.1406
[Amended]
■
■
17.500
19.804–6
62489
[Amended]
52. Amend section 42.709–0 in
paragraph (b) by removing ‘‘$750,000’’
and adding ‘‘$800,000’’ in its place.
■
[Amended]
53. Amend section 42.709–6 by
removing ‘‘$750,000’’ and adding
‘‘$800,000’’ in its place.
■
42.1502
[Amended]
54. Amend section 42.1502 by
removing from paragraph (e) ‘‘$700,000’’
twice and adding ‘‘$750,000’’ in their
places, respectively.
■
PART 50—EXTRAORDINARY
CONTRACTUAL ACTIONS AND THE
SAFETY ACT
50.102–1
[Amended]
55. Amend section 50.102–1 in
paragraph (b) by removing ‘‘$70,000’’
and adding ‘‘$75,000’’ in its place.
■
50.102–3
[Amended]
56. Amend section 50.102–3 by—
a. Removing from paragraph (b)(4)
‘‘$34 million’’ and adding ‘‘$35 million’’
in its place; and
■ b. Removing from paragraphs (e)(1)(i)
and (ii) ‘‘$70,000’’ and adding
‘‘$75,000’’ in their places.
■
■
PART 52—SOLICITATION PROVISIONS
AND CONTRACT CLAUSES
57. Amend section 52.209–12 by
revising the date of the provision, and
■
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removing from paragraph (b)
‘‘$5,000,000’’ and adding ‘‘$5.5 million’’
in its place.
The revision reads as follows:
52.209–12
Matters.
Certification Regarding Tax
52.213–4 Terms and Conditions—
Simplified Acquisitions (Other Than
Commercial Items).
*
*
*
*
*
*
Certification Regarding Tax Matters
(OCT 2020)
*
*
*
*
*
58. Amend section 52.212–5 by—
a. Revising the date of the clause;
b. Removing from paragraph (b)(35)(i)
‘‘(JAN 2019)’’ and adding ‘‘(OCT 2020)’’
in its place;
■ c. Removing from paragraph
(e)(1)(xiii)(A) ‘‘(JAN 2019)’’ and adding
‘‘(OCT 2020)’’ in its place;
■ d. Revising the date of Alternate II;
and
■ e. In paragraph (e)(1)(ii)(L) of
Alternate II removing ‘‘(JAN 2019)’’ and
adding ‘‘(OCT 2020)’’ in its place.
The revisions read 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
(OCT 2020)
*
*
*
*
*
Alternate II (OCT 2020). * * *
*
*
*
*
*
■ 59. Amend section 52.213–4 by
revising the date of the clause, and
removing from paragraph (b)(1)(viii)(A)
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‘‘(JAN 2019)’’ and adding ‘‘(OCT 2020)’’
in its place.
The revision reads as follows:
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*
*
*
*
Terms and Conditions—Simplified
Acquisitions (Other Than Commercial
Items) (OCT 2020)
Certification Regarding Trafficking in
Persons Compliance Plan (OCT 2020)
*
*
*
*
*
62. Amend section 52.244–6 by
revising the date of the clause, and
removing from paragraph (c)(1)(xiv)(A)
‘‘(JAN 2019)’’ and adding ‘‘(OCT 2020)’’
in its place.
The revision reads as follows:
■
*
*
*
*
60. Amend section 52.222–50—
a. Revising the date of the clause;
b. Removing from paragraph (h)(1)(ii)
‘‘$500,000’’ and adding $550,000’’ in its
place;
■ c. Redesignating paragraphs (i)(1)(A)
and (B) as paragraphs (i)(1)(i) and (ii);
and
■ d. Removing from newly redesignated
paragraph (i)(1)(ii) ‘‘$500,000’’ and
adding ‘‘$550,000’’ in its place.
The revision reads as follows:
52.244–6
Items.
52.222–50
Persons.
Combating Trafficking in
52.248–3 Value Engineering—
Construction.
*
*
*
*
■
■
■
*
*
*
*
*
Subcontracts for Commercial
*
*
*
Subcontracts for Commercial Items
(OCT 2020)
*
*
*
*
*
63. Amend section 52.248–3 by
revising the date of the clause, and
removing from paragraph (h) ‘‘$70,000’’
and adding ‘‘$75,000’’ in its place.
The revision reads as follows:
■
*
*
*
*
Combating Trafficking in Persons (OCT
2020)
Value Engineering—Construction (OCT
2020)
*
*
*
*
*
*
61. Amend section 52.222–56 by
revising the date of the provision, and
removing from paragraph (b)(2)
‘‘$500,000’’ and adding ‘‘$550,000’’ in
its place.
The revision reads as follows:
*
*
*
*
■
PART 53—FORMS
53.219
[Amended]
64. Amend section 53.219 by
removing ‘‘(Rev. 8/2016)’’ and adding
‘‘(Rev. OCT 2020)’’ in its place.
■
52.222–56 Certification Regarding
Trafficking in Persons Compliance Plan.
[FR Doc. 2020–21690 Filed 10–1–20; 8:45 am]
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]]>Agencies
[Federal Register Volume 85, Number 192 (Friday, October 2, 2020)]
[Rules and Regulations]
[Pages 62485-62490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21690]
-----------------------------------------------------------------------
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 1, 2, 3, 5, 6, 8, 9, 10, 12, 13, 15, 16, 17, 19, 22,
26, 32, 36, 42, 50, 52, and 53
[FAC 2021-01, FAR Case 2019-013, Docket No. FAR-2019-0013; Sequence No.
1]
RIN 9000-AN96
Federal Acquisition Regulation: Inflation Adjustment of
Acquisition-Related Thresholds
AGENCY: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the
Federal Acquisition Regulation (FAR) to further implement the statute
which requires an adjustment every five years of statutory acquisition-
related thresholds for inflation. The adjustment uses the Consumer
Price Index for all urban consumers, and does not apply to the
Construction Wage Rate Requirements statute (Davis-Bacon Act), Service
Contract Labor Standards statute, and trade agreements thresholds. DoD,
GSA, and NASA are also using the same methodology to adjust
nonstatutory FAR acquisition-related thresholds in 2020.
DATES: Effective: October 1, 2020.
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 FAC 2021-01, FAR Case 2019-013.
SUPPLEMENTARY INFORMATION:
I. Background
DoD, GSA, and NASA published a proposed rule at 85 FR 39146 on June
30, 2020, to further implement 41 U.S.C. 1908. Section 1908 requires an
adjustment every five years (on October 1 of each year evenly divisible
by five) of statutory acquisition-related thresholds for inflation,
using the Consumer Price Index (CPI) for all urban consumers, except
for the Construction Wage Rate Requirements statute (Davis-Bacon Act),
Service Contract Labor Standards statute, and trade agreements
thresholds (see FAR 1.109). As a matter of policy, DoD, GSA, and NASA
are also using the same methodology to adjust nonstatutory FAR
acquisition-related thresholds on October 1, 2020.
The preamble to the proposed rule contained detailed explanations
of--
What an acquisition-related threshold is;
What acquisition-related thresholds are not subject to
escalation adjustment under this case;
How the Defense Acquisition Regulations Council and the
Civilian Agency Acquisition Council (Councils) analyze statutory and
non-statutory acquisition-related thresholds; and
The effect of this rule on the most heavily used
thresholds.
DoD, GSA, and NASA implemented three rules that have reduced the
complexity and impact of the October 1, 2020, threshold adjustments
throughout the FAR. The changes implemented through these rules
significantly reduced the number of cite-specific inflation adjustments
in the FAR and associated matrix.
FAR Case 2018-004, published as a final rule on July 2, 2020 (85 FR
40064) implemented section 217(b) of the National Defense Authorization
Act (NDAA) for Fiscal Year (FY) 2017 (Pub. L. 114-328) and sections
805, 806, and 1702(a) of the NDAA for FY 2018 (Pub. L. 115-91), to
increase the micro-purchase threshold (MPT) to $10,000 and simplified
acquisition threshold (SAT) to $250,000 throughout the FAR. The case
also changed some stated dollar thresholds to text to ensure continued
alignment with the value defined in FAR subpart 2.101.
FAR Case 2018-005, published as a final rule on July 2, 2020 (85 FR
40071) implemented section 811 of the NDAA for FY 2018 that amended 10
U.S.C. 2306a, Cost or Pricing Data: Truth in Negotiations and 41 U.S.C.
3502, Required cost or pricing data and certification. The case
increased the threshold for requesting certified cost or pricing data
from $750,000 to $2 million for contracts entered into after June 30,
2018.
FAR Case 2018-007, published as a final rule on May 6, 2020 (85 FR
27088) implemented section 821 of the NDAA for FY 2018 (Pub. L. 115-91)
which made inflation adjustments of statutory acquisition-related
thresholds under 41 U.S.C. 1908 applicable to existing contracts and
subcontracts that contain the clause implementing section 821 and that
are in effect on the date of the adjustment. The case replaced
throughout FAR part 52 as appropriate, numerical values based on the
value of the MPT or the SAT with the term ``micro-purchase threshold''
or ``simplified acquisition threshold''. When such terms are used,
there is a reference to the definition in FAR 2.101. In addition to the
MPT and SAT, numerical values for certain thresholds have been replaced
with a reference to the applicable FAR text that specifies the
numerical threshold.
The following list identifies the impact of this rule on heavily-
used thresholds.
The micro-purchase threshold at FAR 2.101 was raised to
$10,000 by statute (see FAR Case 2018-004). No further increase to the
basic threshold is made at this time, as there has been insufficient
inflation. Paragraph 3(ii) of the definition, for acquisitions to
support contingency operations or to facilitate defense against certain
attacks, is increasing from $30,000 to $35,000.
The simplified acquisition threshold was changed to
$250,000 by statute (see FAR Case 2018-004). No further increase in the
basic threshold is proposed, as there has been insufficient inflation.
Paragraph (1)(i) of the definition for acquisitions to support
contingency operations or to facilitate defense against certain
attacks, is increasing from $750,000 to $800,000.
The preaward and post-award notices (FAR part 5) remain at
$25,000 because of trade agreements.
The requirements for limiting competition (FAR part 6) to
eligible 8(a) awards over $22 million is increased to $25 million.
The simplified procedures for certain commercial items
ceiling (FAR 13.500) is increased from $7 million to $7.5 million. For
acquisitions described at 13.500(c), the ceiling is increasing from
$13.5 million to $15 million.
The cost or pricing data threshold (FAR 15.403-4) was
increased by statute from $750,000 to $2 million (see FAR Case 2018-
005) and is not increasing in this case.
The prime contractor subcontracting plan (FAR 19.702)
threshold is increasing from $700,000 to
[[Page 62486]]
$750,000, but the construction threshold of $1.5 million will not
change. Standard Form 294 at General Instruction 3 has a reference to
$700,000, which will be changed.
The threshold for reporting first-tier subcontract
information including executive compensation will not change (FAR
subpart 4.14 and 52.204-10).
This is the fourth review of FAR acquisition-related thresholds
since the statute was passed on October 28, 2004 (section 807 of the
Ronald W. Reagan National Defense Authorization Act for Fiscal Year
2005). The last review was conducted under FAR case 2014-022 during FY
2015. The final rule under that case was published in the Federal
Register on July 2, 2015 (80 FR 38293), effective October 1, 2015.
Seven respondents submitted comments on the proposed rule.
II. Discussion and Analysis
The Civilian Agency Acquisition Council and the Defense Acquisition
Regulations Council (the Councils) reviewed the comments in the
development of the final rule.
A. Summary of Significant Changes
Minor edits were made to the final rule to account for baseline
updates caused by publication of other FAR interim or final rules.
The proposed rule included some thresholds that were very close
but, ultimately, did not reach the statutory calculation formula
amount. As a result, the Councils have removed them from the text of
the final rule: FAR 9.405-2, 9.409, 13.402, $3,500 at 16.505(b),
19.1406(a)(2)(ii), 28.102-1 to 28.102-3, and 42.1502(f). In one case,
for FAR 50.102-3, the statutory calculation did increase the threshold
to $35 million, but this is lower than the value published in the
proposed rule.
Some thresholds were inadvertently omitted, but are now included
because they did reach the statutory calculation formula amount:
16.503(d), 19.804-6, 19.1506, 52.209-12, 52.222-50, and 52.222-56.
The FAR text also makes a correction to 52.222-50(i)(1). The
paragraphs marked as (A) and (B) have been corrected to (i) and (ii),
respectively.
B. Analysis of Public Comments
A discussion of the comments is provided as follows:
Comment: A respondent stated that there appeared to be an error in
the proposed rule with a reference to FAR 42.709-0, as the current FAR
has no 42.709-0; and did we mean the reference to 42.709-6 to be
42.709-7.
Response: The proposed rule contained the correct section numbering
for sections 42.709-0 through 42.709-6. The Acquisition.Gov website
reflected incorrect references, however, the Electronic Code of Federal
Regulations reflected the correct FAR text.
Comment: A respondent asked why FAR 19.804-6 and 19.1506 did not
appear in the proposed rule.
Response: These were inadvertently omitted. The required statutory
changes now appear in the final rule.
Comment: A respondent stated it is unclear why the existing
thresholds at FAR 19.1406(a)(2)(i) and 19.1506(c)(1)(i) are different
than those established under FAR 19.805-1. The respondent stated that
prior to 2006, FAR 19.805-1, 19.1306, and 19.1406 appear to have been
identical (or similar) and one would assume that if these thresholds
were adjusted based on the CPI, they would remain the same.
Response: The thresholds at FAR 19.1406(a)(2)(i), 19.1506(c)(1)(i),
and 19.805-1 were established by different statutes. The calculations
are set by 41 U.S.C. 1908, and are based on the enactment date of the
underlying statute. The calculation for FAR 19.1406(a)(2) is based on a
statute enacted December 16, 2003; paragraph (a)(2)(i) will increase to
$7 million, but paragraph (a)(2)(ii) was not sufficient for that
threshold to change in the final rule, and will remain at $4 million.
FAR 19.1506(c)(1)(i) and (ii) are subject to the inflation statute, but
were inadvertently omitted from the proposed rule; they appear in the
final rule with increased thresholds of $7 million and $4.5 million.
The calculation for FAR 19.805-1 and 19.1306 were based on statutes
enacted before October 1, 2000. For more information on the
calculations please see FAR 1.109 and the matrix referenced there.
Comment: A respondent recommended that the Miller Act threshold be
raised to $250,000 to be in line with the increase of the SAT to
$250,000.
Response: There is no statute allowing this.
Comment: Two respondents stated that the $35,000 payment bond
thresholds at FAR 28.102-1(b)(1), 28.102-2(c), and 28.102-3(b) should
not be increased, as (1) they are not acquisition-related thresholds,
instead being closer to ``required levels of insurance'', and (2) the
increase would harm small business by increasing the risk of nonpayment
by prime contractors.
Response: These thresholds are not increasing in the final rule
because they did not reach the statutory calculation formula amount
(see Section II.A. of this preamble). In regard to whether bond
thresholds are considered acquisition-related thresholds, the Councils
disagree with the commenter's assertion that the thresholds are
``required levels of insurance''. The application of payment bond
requirements are specific to a particular contract, however required
levels of insurance apply more generally to a particular contractor. An
example of a required level of insurance can be found at FAR 28.307-2,
such as worker's compensation insurance which is required at $100,000.
In regard to the comment that the increase will harm small business,
this is a policy matter which does not override the statutory
requirement to apply the inflation increase to acquisition-related
statutory thresholds. These particular thresholds have increased in
previous FAR inflation cases, to include the most recent FAR case 2014-
022, from the $25,000 found in 40 U.S.C. 3132 to the current FAR amount
of $35,000.
Comment: A respondent expressed general support for the rule.
Response: The support is noted.
III. Applicability to Contracts at or Below the Simplified Acquisition
Threshold (SAT) and for Commercial Items, Including Commercially
Available Off-the-Shelf (COTS) Items
This final rule does not create any new provisions or clauses, nor
does it change the applicability or burden of any existing provisions
or clauses included in solicitations and contracts valued at or below
the SAT, or for commercial items, including COTS items, except for the
changes in the thresholds themselves.
IV. 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 not a significant regulatory action and, therefore, was not
subject to review under section 6(b) of E.O. 12866, Regulatory Planning
and Review, dated September 30, 1993. This rule is not a major rule
under 5 U.S.C. 804.
[[Page 62487]]
V. Executive Order 13771
The rule is not subject to E.O. 13771, because this rule is not a
significant regulatory action under E.O. 12866.
VI. Regulatory Flexibility Act
DoD, GSA, and NASA have prepared a Final Regulatory Flexibility
Analysis (FRFA) consistent with the Regulatory Flexibility Act, 5
U.S.C. 601, et seq. The FRFA is summarized as follows:
This final rule amends the Federal Acquisition Regulation to
implement 41 U.S.C. 1908 and to amend other acquisition-related
dollar thresholds that are based on policy rather than statute in
order to adjust for the changing value of the dollar. 41 U.S.C. 1908
requires adjustment every five years of statutory acquisition-
related dollar thresholds, except for Construction Wage Rate
Requirements statute (Davis-Bacon Act), Service Contract Labor
Standards statute, and trade agreements thresholds. While reviewing
all statutory acquisition-related thresholds, this case presented an
opportunity to also review all nonstatutory acquisition-related
thresholds in the FAR that are based on policy. The objective of the
case is to maintain the status quo, by adjusting acquisition-related
thresholds for inflation.
There were no significant issues raised by the public in
response to the initial regulatory flexibility analysis.
DoD, GSA, and NASA do not expect this rule to have a 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. The
threshold changes in this rule are not expected to have any
significant economic impact on small business concerns because the
threshold changes are intended to maintain the status quo by
adjusting for changes in the value of the dollar. Often any impact
will be beneficial, by preventing burdensome requirements from
applying to more and more acquisitions, as the dollar loses value.
One threshold change in this rule which may impact small
business concerns is the increase of the threshold for requiring a
justification or determination for sole source 8(a) awards made
pursuant to FAR 6.303-1 from $22 million to $25 million. This
threshold increase is expected to benefit small businesses under the
8(a) program by expanding their access to contract opportunities. To
assess the impact of the increase, data was requested from the
Federal Procurement Data System. For FY 2017 through FY 2019, there
was an average of 300 contracts and calls/orders between $22 million
and $25 million. Of these actions, an average of 134 went to small
business concerns, 27 of which were 8(a) program participants. We
expect that many of these awards will still go to small business
concerns and potentially increase the number of awards to 8(a)
program participants.
This rule does not include any new reporting, recordkeeping, or
other compliance requirements on any small entities.
There are no known significant alternative approaches to the
rule that would meet the stated objectives of the applicable
statute.
Interested parties may obtain a copy of the FRFA from the
Regulatory Secretariat Division. The Regulatory Secretariat Division
has submitted a copy of the FRFA to the Chief Counsel for Advocacy of
the Small Business Administration.
VII. Paperwork Reduction Act
The Paperwork Reduction Act (44 U.S.C. chapter 35) does apply;
however, these changes to the FAR do not impose additional information
collection requirements to the paperwork burden previously approved
under OMB Control numbers: 9000-0006, 9000-0007, 1250-0004, and 1293-
0005.
List of Subjects in 48 CFR Parts 1, 2, 3, 5, 6, 8, 9, 10, 12, 13,
15, 16, 17, 19, 22, 26, 32, 36, 42, 50, 52, and 53
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 amend 48 CFR parts 1, 2, 3, 5, 6, 8,
9, 10, 12, 13, 15, 16, 17, 19, 22, 26, 32, 36, 42, 50, 52, and 53 as
set forth below:
0
1. The authority citation for 48 CFR parts 1, 2, 3, 5, 6, 8, 9, 10, 12,
13, 15, 16, 17, 19, 22, 26, 32, 36, 42, 50, 52, and 53 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 1--FEDERAL ACQUISITION REGULATIONS SYSTEM
1.109 [Amended]
0
2. Amend section 1.109, in paragraph (e) by removing ``2014-022'' and
adding ``2019-013'' in its place.
PART 2--DEFINITIONS OF WORDS AND TERMS
2.101 [Amended]
0
3. Amend section 2.101, in paragraph (b)(2) by--
0
a. In the definition ``Major system'', removing from paragraph (2) ``$
2 million'' and adding ``$2.5 million'' in its place;
0
b. In the definition ``Micro-purchase threshold'', removing from
paragraph (3)(ii) ``$30,000'' and adding ``$35,000'' in its place; and
0
c. In the definition ``Simplified acquisition threshold'', removing
from paragraph (1)(i) ``$750,000'' and adding ``$800,000'' in its
place.
PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF
INTEREST
3.1004 [Amended]
0
4. Amend section 3.1004 by removing from paragraphs (a), (b)(1)(i), and
(b)(3) ``$5.5 million'' and adding ``$6 million'' in their places,
respectively.
PART 5--PUBLICIZING CONTRACT ACTIONS
5.303 [Amended]
0
5. Amend section 5.303 in paragraph (a) by removing ``$4 million'' and
adding ``$4.5 million'' in its place.
PART 6--COMPETITION REQUIREMENTS
6.204 [Amended]
0
6. Amend section 6.204 in paragraph (b) by removing ``$22 million'' and
adding ``$25 million'' in its place.
6.302-5 [Amended]
0
7. Amend section 6.302-5 by--
0
a. Removing from paragraph (b)(4) ``$22 million. (See subpart 19.8.)''
and adding ``$25 million. (See subpart 19.8.)'' in its place; and
0
b. Removing from paragraph (c)(2)(iii) ``$22 million'' and adding ``$25
million'' in its place.
6.303-1 [Amended]
0
8. Amend section 6.303-1 in paragraph (b) introductory text by removing
``$22 million'' and adding ``$25 million'' in its place.
6.303-2 [Amended]
0
9. Amend section 6.303-2 by removing from the introductory text of
paragraphs (b) and (d) ``$22 million'' and adding ``$25 million'' in
their places, respectively.
6.304 [Amended]
0
10. Amend section 6.304 by--
0
a. Removing from paragraph (a)(1) ``$700,000'' and adding ``$750,000''
in its place;
0
b. Removing from paragraph (a)(2) ``$700,000'' and ``$13.5 million''
and adding ``$750,000'' and ``$15 million'' in their places,
respectively;
0
c. Removing from paragraph (a)(3) introductory text ``$13.5 million'',
``$68 million'', and ``$93 million'' and adding ``$15 million'', ``$75
million'', and ``$100 million'' in their places, respectively; and
0
d. Removing from paragraph (a)(4) ``$68 million'' and ``$93 million''
and adding ``$75 million'' and ``$100 million'' in their places,
respectively.
[[Page 62488]]
PART 8--REQUIRED SOURCES OF SUPPLIES AND SERVICES
8.404 [Amended]
0
11. Amend section 8.404 in paragraph (b)(2) by removing ``$550,000''
and adding ``$600,000'' in its place.
8.405-3 [Amended]
0
12. Amend section 8.405-3 by--
0
a. Removing from paragraph (a)(3)(ii) introductory text ``$112
million'' and adding ``$100 million'' in its place;
0
b. Removing from paragraph (a)(3)(iii) ``$112 million'' and adding
``$100 million'' in its place; and
0
c. Removing from paragraph (a)(7)(v) ``$112 million'' and adding ``$100
million'' in its place.
8.405-6 [Amended]
0
13. Amend section 8.405-6 by--
0
a. Removing from paragraph (d)(1) ``$700,000'' and adding ``$750,000''
in its place;
0
b. Removing from paragraph (d)(2) ``$700,000'' and ``$13.5 million''
and adding ``$750,000'' and ``$15 million'' in their places,
respectively;
0
c. Removing from paragraph (d)(3) introductory text ``$13.5 million'',
``$68 million'', and ``$93 million'' and adding ``$15 million'', ``$75
million'', and ``$100 million'' in their places, respectively; and
0
d. Removing from paragraph (d)(4) ``$68 million'' and ``$93 million''
and adding ``$75 million'' and ``$100 million'' in their places,
respectively.
PART 9--CONTRACTOR QUALIFICATIONS
9.104-5 [Amended]
0
14. Amend section 9.104-5 in paragraph (c) by removing ``$5,000,000''
and adding ``$5.5 million'' in its place.
9.104-7 [Amended]
0
15. Amend section 9.104-7 by--
0
a. Removing from paragraphs (b) and (c)(1) ``$550,000'' and adding
``$600,000'' in their places, respectively; and
0
b. Removing from paragraph (e) ``$5,000,000'' and adding ``$5.5
million'' in its place.
PART 10--MARKET RESEARCH
10.001 [Amended]
0
16. Amend section 10.001 in paragraph (d) by removing ``$5.5 million''
and adding ``$6 million'' in its place.
10.003 [Amended]
0
17. Amend section 10.003 by removing ``$5.5 million'' and adding ``$6
million'' in its place.
PART 12--ACQUISITION OF COMMERCIAL ITEMS
12.102 [Amended]
0
18. Amend section 12.102 in paragraph (f)(2) by removing ``$19
million'' and adding ``$20 million'' in its place.
12.203 [Amended]
0
19. Amend section 12.203 by removing ``$7 million ($13 million'' and
adding ``$7.5 million ($15 million'' in its place.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
13.000 [Amended]
0
20. Amend section 13.000 by removing ``$7 million ($13 million'' and
adding ``$7.5 million ($15 million'' in its place.
13.003 [Amended]
0
21. Amend section 13.003 by removing from paragraphs (c)(1)(ii) and
(g)(2) ``$7 million ($13 million'' and adding ``$7.5 million ($15
million'' in their places, respectively.
13.201 [Amended]
0
22. Amend section 13.201 in paragraph (g)(1)(ii) by removing
``$30,000'' and adding ``$35,000'' in its place.
13.303-5 [Amended]
0
23. Amend section 13.303-5 by--
0
a. Removing from paragraph (b)(1) ``$7 million'' and ``$13 million''
and adding ``$7.5 million'' and ``$15 million'' in their places,
respectively; and
0
b. Removing from paragraph (b)(2) ``$7 million ($13 million'' and
adding ``$7.5 million ($15 million'' in its place.
13.500 [Amended]
0
24. Amend section 13.500 by--
0
a. Removing from paragraph (a) ``$7 million ($13 million'' and adding
``$7.5 million ($15 million'' in its place; and
0
b. Removing from paragraph (c) introductory text ``$13 million'' and
adding ``$15 million'' in its place.
13.501 [Amended]
0
25. Amend section 13.501 by--
0
a. Removing from paragraph (a)(2)(i) ``$700,000'' and adding
``$750,000'' in its place;
0
b. Removing from paragraph (a)(2)(ii) ``$700,000'' and ``$13.5
million'' and adding ``$750,000'' and ``$15 million'' in their places,
respectively;
0
c. Removing from paragraph (a)(2)(iii) ``$13.5 million'', ``$68
million'', and ``$93 million'' and adding ``$15 million'', ``$75
million'', and ``$100 million'' in their places, respectively; and
0
d. Removing from paragraph (a)(2)(iv) ``$68 million'' and ``$93
million'' and adding ``$75 million'' and ``$100 million'' in their
places, respectively.
PART 15--CONTRACTING BY NEGOTIATION
15.403-1 [Amended]
0
26. Amend section 15.403-1 in paragraph (c)(3)(iv) by removing ``$19
million'' and adding ``$20 million'' in its place.
15.404-3 [Amended]
0
27. Amend section 15.404-3 in paragraph (c)(1)(i) by removing ``$13.5
million'' and adding ``$15 million'' in its place.
15.407-2 [Amended]
0
28. Amend section 15.407-2 by removing from paragraphs (c)(1) and
(c)(2) introductory text ``$13.5 million'' and adding ``$15 million''
in their places, respectively.
15.408 [Amended]
0
29. Amend section 15.408, in Table 15-2, section II, paragraph A.(2) by
removing ``$13.5 million'' and adding ``$15 million'' in its place.
PART 16--TYPES OF CONTRACTS
16.503 [Amended]
0
30. Amend section 16.503 by--
0
a. Removing from paragraph (b)(2) ``$112 million'' and adding ``$100
million'' in its place; and
0
b. Removing from paragraph (d)(1) ``$13.5 million'' and adding ``$15
million'' in its place.
16.504 [Amended]
0
31. Amend section 16.504 by--
0
a. Removing from paragraphs (c)(1)(ii)(D)(1) and (D)(3) introductory
text, ``$112 million'' and adding ``$100 million'' in their places,
respectively; and
0
b. Removing from paragraph (c)(2)(i) introductory text ``$13.5
million'' and adding ``$15 million'' in its place.
16.505 [Amended]
0
32. Amend section 16.505 by--
0
a. Removing from paragraph (b)(1)(iv) introductory text ``$5.5
million'' wherever it appears and adding ``$6 million'' in their
places, respectively;
0
b. Removing from paragraph (b)(2)(ii)(C)(1) ``$700,000'' and adding
``$750,000'' in its place;
0
c. Removing from paragraph (b)(2)(ii)(C)(2) ``$700,000'' and ``$13.5
million'' and adding ``$750,000'' and
[[Page 62489]]
``$15 million'' in their places, respectively;
0
d. Removing from paragraph (b)(2)(ii)(C)(3) introductory text ``$13.5
million'', ``$68 million'', and ``$93 million'' and adding ``$15
million'', ``$75 million'' and ``$100 million'' in their places,
respectively;
0
e. Removing from paragraph (b)(2)(ii)(C)(4) ``$68 million'' and ``$93
million'' and adding ``$75 million'' and ``$100 million'' in their
places, respectively; and
0
f. Removing from paragraph (b)(6) introductory text ``$5.5 million''
wherever it appears and adding ``$6 million'' in their places,
respectively.
16.506 [Amended]
0
33. Amend section 16.506 by--
0
a. Removing from paragraphs (f) and (g) ``$13.5 million'' and adding
``$15 million'' in their places, respectively; and
0
b. Removing from paragraph (h) ``$5.5 million'' and adding ``$6
million'' in its place.
PART 17--SPECIAL CONTRACTING METHODS
17.108 [Amended]
0
34. Amend section 17.108 by--
0
a. Removing from paragraph (a) ``$13.5 million'' and adding ``$15
million'' in its place; and
0
b. Removing from paragraph (b) ``$135.5 million'' and adding ``$150
million'' in its place.
17.500 [Amended]
0
35. Amend section 17.500 in paragraph (c)(2) by removing ``$550,000''
and adding ``$600,000'' in its place.
PART 19--SMALL BUSINESS PROGRAMS
19.702 [Amended]
0
36. Amend section 19.702 by removing from paragraphs (a)(1)(i) through
(iii) ``$700,000'' and adding ``$750,000'' in their places,
respectively.
19.704 [Amended]
0
37. Amend section 19.704 by--
0
a. Removing from paragraph (a) introductory text ``plan'' and adding
``plan required'' in its place; and
0
b. Removing from paragraph (a)(9) ``$700,000'' and adding ``$750,000''
in its place.
19.708 [Amended]
0
38. Amend section 19.708 in paragraph (b)(1) introductory text by
removing ``$700,000'' and adding ``$750,000'' in its place.
19.804-6 [Amended]
0
39. Amend section 19.804-6 in paragraph (c)(2) by removing ``$7
million'' and ``$4 million'' and adding ``$7.5 million'' and ``$4.5
million'' in their places, respectively.
19.805-1 [Amended]
0
40. Amend section 19.805-1 in paragraph (a)(2) by removing ``$7
million'' and ``$4 million'' and adding ``$7.5 million'' and ``$4.5
million'' in their places, respectively.
19.808-1 [Amended]
0
41. Amend section 19.808-1 in paragraph (a) by removing ``$22 million''
and adding ``$25 million'' in its place.
19.1306 [Amended]
0
42. Amend section 19.1306 by--
0
a. Removing from paragraph (a)(2)(i) ``$7 million'' and adding ``$7.5
million'' in its place; and
0
b. Removing from paragraph (a)(2)(ii) ``$4 million'' and adding ``$4.5
million'' in its place.
19.1406 [Amended]
0
43. Amend section 19.1406 by removing from paragraph (a)(2)(i) ``$6.5
million'' and adding ``$7 million'' in its place.
19.1506 [Amended]
0
44. Amend section 19.1506 by--
0
a. Removing from paragraph (c)(1)(i) ``$6.5 million'' and adding ``$7
million'' in its place; and
0
b. Removing from paragraph (c)(1)(ii) ``$4 million'' and adding ``$4.5
million'' in its place.
PART 22--APPLICATION OF LABOR LAWS TO GOVERNMENT ACQUISITIONS
22.1103 [Amended]
0
45. Amend section 22.1103 by removing ``$700,000'' and adding
``$750,000'' in its place.
22.1701 [Amended]
0
46. Amend section 22.1701 in paragraph (b)(2) by removing ``$500,000''
and adding ``$550,000'' in its place.
22.1703 [Amended]
0
47. Amend section 22.1703 by removing from paragraphs (c)(1)(i)(B) and
(c)(3)(i)(B) ``$500,000'' and adding ``$550,000'' in their places,
respectively.
22.1705 [Amended]
0
48. Amend section 22.1705 in paragraph (b)(1) by removing ``$500,000''
and adding ``$550,000'' in its place.
PART 26--OTHER SOCIOECONOMIC PROGRAMS
26.404 [Amended]
0
49. Amend section 26.404 by removing ``$25,000'' and adding ``$30,000''
in its place.
PART 32--CONTRACT FINANCING
32.104 [Amended]
0
50. Amend section 32.104 by removing from paragraphs (d)(2)(i) and (ii)
``$2.5 million'' and adding ``$3 million'' in their places,
respectively.
PART 36--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS
36.303-1 [Amended]
0
51. Amend section 36.303-1 in paragraph (a)(4) by removing ``$4
million'' and adding ``$4.5 million'' in its place.
PART 42--CONTRACT ADMINISTRATION AND AUDIT SERVICES
42.709-0 [Amended]
0
52. Amend section 42.709-0 in paragraph (b) by removing ``$750,000''
and adding ``$800,000'' in its place.
42.709-6 [Amended]
0
53. Amend section 42.709-6 by removing ``$750,000'' and adding
``$800,000'' in its place.
42.1502 [Amended]
0
54. Amend section 42.1502 by removing from paragraph (e) ``$700,000''
twice and adding ``$750,000'' in their places, respectively.
PART 50--EXTRAORDINARY CONTRACTUAL ACTIONS AND THE SAFETY ACT
50.102-1 [Amended]
0
55. Amend section 50.102-1 in paragraph (b) by removing ``$70,000'' and
adding ``$75,000'' in its place.
50.102-3 [Amended]
0
56. Amend section 50.102-3 by--
0
a. Removing from paragraph (b)(4) ``$34 million'' and adding ``$35
million'' in its place; and
0
b. Removing from paragraphs (e)(1)(i) and (ii) ``$70,000'' and adding
``$75,000'' in their places.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
0
57. Amend section 52.209-12 by revising the date of the provision, and
[[Page 62490]]
removing from paragraph (b) ``$5,000,000'' and adding ``$5.5 million''
in its place.
The revision reads as follows:
52.209-12 Certification Regarding Tax Matters.
* * * * *
Certification Regarding Tax Matters (OCT 2020)
* * * * *
0
58. Amend section 52.212-5 by--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (b)(35)(i) ``(JAN 2019)'' and adding ``(OCT
2020)'' in its place;
0
c. Removing from paragraph (e)(1)(xiii)(A) ``(JAN 2019)'' and adding
``(OCT 2020)'' in its place;
0
d. Revising the date of Alternate II; and
0
e. In paragraph (e)(1)(ii)(L) of Alternate II removing ``(JAN 2019)''
and adding ``(OCT 2020)'' in its place.
The revisions read 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 (OCT 2020)
* * * * *
Alternate II (OCT 2020). * * *
* * * * *
0
59. Amend section 52.213-4 by revising the date of the clause, and
removing from paragraph (b)(1)(viii)(A) ``(JAN 2019)'' and adding
``(OCT 2020)'' in its place.
The revision reads as follows:
52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Items).
* * * * *
Terms and Conditions--Simplified Acquisitions (Other Than Commercial
Items) (OCT 2020)
* * * * *
0
60. Amend section 52.222-50--
0
a. Revising the date of the clause;
0
b. Removing from paragraph (h)(1)(ii) ``$500,000'' and adding
$550,000'' in its place;
0
c. Redesignating paragraphs (i)(1)(A) and (B) as paragraphs (i)(1)(i)
and (ii); and
0
d. Removing from newly redesignated paragraph (i)(1)(ii) ``$500,000''
and adding ``$550,000'' in its place.
The revision reads as follows:
52.222-50 Combating Trafficking in Persons.
* * * * *
Combating Trafficking in Persons (OCT 2020)
* * * * *
0
61. Amend section 52.222-56 by revising the date of the provision, and
removing from paragraph (b)(2) ``$500,000'' and adding ``$550,000'' in
its place.
The revision reads as follows:
52.222-56 Certification Regarding Trafficking in Persons Compliance
Plan.
* * * * *
Certification Regarding Trafficking in Persons Compliance Plan (OCT
2020)
* * * * *
0
62. Amend section 52.244-6 by revising the date of the clause, and
removing from paragraph (c)(1)(xiv)(A) ``(JAN 2019)'' and adding ``(OCT
2020)'' in its place.
The revision reads as follows:
52.244-6 Subcontracts for Commercial Items.
* * * * *
Subcontracts for Commercial Items (OCT 2020)
* * * * *
0
63. Amend section 52.248-3 by revising the date of the clause, and
removing from paragraph (h) ``$70,000'' and adding ``$75,000'' in its
place.
The revision reads as follows:
52.248-3 Value Engineering--Construction.
* * * * *
Value Engineering--Construction (OCT 2020)
* * * * *
PART 53--FORMS
53.219 [Amended]
0
64. Amend section 53.219 by removing ``(Rev. 8/2016)'' and adding
``(Rev. OCT 2020)'' in its place.
[FR Doc. 2020-21690 Filed 10-1-20; 8:45 am]
BILLING CODE 6820-EP-P
