Federal Acquisition Regulation: Application of Micro-Purchase Threshold to Task and Delivery Orders, 31073-31074 [2021-11864]

Agencies

• DEPARTMENT OF DEFENSE
• General Services Administration
• National Aeronautics and Space Administration

[Federal Register Volume 86, Number 110 (Thursday, June 10, 2021)]
[Rules and Regulations]
[Pages 31073-31074]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11864]



[[Page 31073]]

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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 16

[FAC 2021-06; FAR Case 2020-004; Item II; Docket No. FAR-2020-0004, 
Sequence No. 1]
RIN 9000-AO04


Federal Acquisition Regulation: Application of Micro-Purchase 
Threshold to Task and Delivery Orders

AGENCY: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: DoD, GSA, and NASA are issuing a final rule amending the 
Federal Acquisition Regulation (FAR) to implement a section of the 
National Defense Authorization Act for Fiscal Year 2020 that raises the 
threshold for fair opportunity on certain task and delivery orders to 
the micro-purchase threshold.

DATES: Effective: July 12, 2021.

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 2021-06 and FAR Case 2020-004.

SUPPLEMENTARY INFORMATION:

I. Background

    DoD, GSA, and NASA published a proposed rule at 85 FR 67327, on 
October 22, 2020, to implement section 826 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2020 (Pub. L. 116-92), 
which increases the threshold for requiring fair opportunity on orders 
under multiple-award contracts from $2,500 to the ``micro-purchase 
threshold''. The fair opportunity to be considered at FAR 16.505(b)(1) 
applies to orders over the threshold unless an exception at 
16.505(b)(2) applies. The threshold at FAR 16.505 is currently $3,500, 
as a result of inflation adjustments in accordance with FAR 1.109. The 
micro-purchase threshold (MPT) is $10,000 (FAR case 2018-004 published 
on July 2, 2020, at 85 FR 40064).

II. Discussion and Analysis

    There were no public comments submitted in response to the proposed 
rule, and no changes were made to the final rule.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This final rule does not create any new provisions or clauses, nor 
does it change the applicability of any existing provisions or clauses 
included in solicitations and contracts valued at or below the 
simplified acquisition threshold, or for commercial items, including 
commercially available off-the-shelf items.

IV. Expected Impact of the Rule

    DoD, GSA, and NASA have performed an analysis for this final rule. 
This rule is expected to reduce the public burden because the threshold 
increase will reduce costs to submit an offer for the unsuccessful 
awardees who participate in fair opportunity competitions for orders 
under FAR part 16. DoD, GSA, and NASA recognize some awardees may be 
impacted by a reduction in the number of opportunities an awardee may 
have to receive an award of a delivery or task order through fair 
opportunity. Using Federal Procurement Data System (FPDS) data from FY 
2017 through FY 2019, the average number of fair opportunity task or 
delivery orders under FAR part 16 procedures is approximately 9,800 
orders annually. DoD, GSA, and NASA estimate that the Government 
receives an average of three offers for each of the 9,800 task or 
delivery orders, resulting in an estimated 19,600 (9,800 x 2) 
unsuccessful offers. There are costs to submit the estimated 19,600 
unsuccessful offers, which will be eliminated by this rule.
    DoD, GSA, and NASA recognize that the increase in the MPT in FAR 
Case 2018-004 has resulted in an increased use of the Governmentwide 
commercial purchase card and a general reduction in the number of FAR 
part 16 delivery and task orders awarded between $3,500 and $10,000. 
According to FPDS, there were 12,911 fair opportunity FAR part 16 
awards between $3,500 and $10,000 in FY 2017. In contrast, there were 
6,421 awards in FY 2019; a decrease of almost 50%. This decrease can be 
attributed to the preference given to the Governmentwide commercial 
purchase card for procurements under the MPT. While it is unclear 
whether there will be further decreases in the number of FAR part 16 
fair opportunity awards, it is clear that the increased MPT implemented 
by FAR Case 2018-004 has already reduced the public and Government 
burden by approximately 50% by shifting procurements from FAR part 16 
delivery and task orders to Governmentwide commercial purchase cards.
    DoD, GSA, and NASA expect the rule to also reduce burden on the 
Government and streamline procurements for FAR part 16 orders below the 
MPT. Contracting officers will not be required to review multiple 
offers to make award, resulting in time savings for each order awarded.

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 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.

VI. Congressional Review Act

    As required by the Congressional Review Act (5 U.S.C. 801-808) 
before an interim or final rule takes effect, DoD, GSA and NASA will 
send the rule and the ``Submission of Federal Rules Under the 
Congressional Review Act'' form to each House of the Congress and to 
the Comptroller General of the United States. A major rule cannot take 
effect until 60 days after it is published in the Federal Register. The 
Office of Information and Regulatory Affairs (OIRA) in the Office of 
Management and Budget has determined that this is not a major rule 
under 5 U.S.C. 804.

VII. 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. 601-612. The FRFA is summarized as follows:

    This final rule amends the Federal Acquisition Regulation to 
implement section 826 of the National Defense Authorization Act 
(NDAA) for Fiscal Year (FY) 2020 (Pub. L. 116-92), which raises the 
threshold for fair opportunity on certain task and delivery orders 
to the word-based, ``micro-purchase threshold''.

[[Page 31074]]

    The objective of the rule is to increase the threshold for 
requiring fair opportunity on FAR part 16 orders under multiple-
award contracts from $3,500 to the word-based, ``micro-purchase 
threshold'' for consistency of application and alignment with future 
adjustments. The legal basis for the rule is section 826 of the NDAA 
for FY 2020 (Pub. L. 116-92).
    There were no significant issues raised 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; most of 
the impact will be on the Government. This rule will likely affect 
small entities that participate in fair opportunity competitions for 
FAR part 16 task and delivery orders under multiple-award contracts 
conducted by the Federal Government between $3,500 and the micro-
purchase threshold, which currently is $10,000. DoD, GSA, and NASA 
do not expect a significant change in the number of orders awarded 
to small entities; however, in certain circumstances this rule is 
expected to reduce the costs associated with developing and 
submitting a response to task and delivery order competitions for 
actions up to $10,000. To assess the impact of the threshold 
increase, data was obtained from FPDS. For FY 2017 through FY 2019, 
there was an average of 9,803 FAR part 16 task and delivery orders 
awarded using fair opportunity between $3,500 and $10,000. Of these 
actions, an average of 5,852 were awarded to 843 unique small 
entities. As a result of this rule, it is assumed that approximately 
843 small entities may experience a reduction in proposal costs on 
task and delivery orders valued between $3,500 and $10,000.
    This rule does not impose any reporting, recordkeeping, or other 
compliance requirements.
    There are no alternatives that are consistent with the 
objectives of the 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.

VIII. Paperwork Reduction Act

    This 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. 3501-3521).

List of Subjects in 48 CFR Part 16

    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 part 16 as set forth 
below:

PART 16--TYPES OF CONTRACTS

0
1. The authority citation for 48 CFR part 16 continues to read as 
follows:

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 137; and 51 
U.S.C. 20113.


16.505   [Amended]

0
2. Amend section 16.505 by--
0
a. Removing from paragraph (b)(1)(i) introductory text ``$3,500'' and 
adding ``the micro-purchase threshold'' in its place;
0
b. Removing from paragraph (b)(2)(i) introductory text ``delivery-order 
or task-order exceeding $3,500'' and adding ``delivery order or task 
order exceeding the micro-purchase threshold'' in its place; and
0
c. Removing from the paragraph (b)(2)(ii)(A) subject heading ``$3,500'' 
and adding ``the micro-purchase threshold'' in its place.

[FR Doc. 2021-11864 Filed 6-9-21; 8:45 am]
BILLING CODE 6820-EP-P