Federal Acquisition Regulation: Exemption of Certain Contracts From the Periodic Inflation Adjustments to the Acquisition-Related Thresholds, 25476-25477 [2023-08198]

Agencies

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

[Federal Register Volume 88, Number 80 (Wednesday, April 26, 2023)]
[Rules and Regulations]
[Pages 25476-25477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-08198]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Part 1

[FAC 2023-03, FAR Case 2022-002, Item II; Docket No. FAR-2022-0002, 
Sequence No. 1]
RIN 9000-AO39


Federal Acquisition Regulation: Exemption of Certain Contracts 
From the Periodic Inflation Adjustments to the Acquisition-Related 
Thresholds

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 2022 that provides a 
statutory exception to the periodic inflation adjustments of 
acquisition-related thresholds for certain bond requirements.

DATES: Effective May 26, 2023.

FOR FURTHER INFORMATION CONTACT: For clarification of content, contact 
Ms. Marissa Ryba, Procurement Analyst, at 314-586-1280 or by email at 
[email protected]. For information pertaining to status or 
publication schedules, contact the Regulatory Secretariat Division at 
202-501-4755 or [email protected]. Please cite FAC 2023-03, FAR Case 
2022-002.

SUPPLEMENTARY INFORMATION: 

I. Background

    DoD, GSA, and NASA published a proposed rule at 87 FR 58300 on 
September 26, 2022, to implement section 861 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2022 (Pub. L. 117-81), 
which provides for a statutory exception to the periodic inflation 
adjustments of acquisition-related thresholds under 41 U.S.C. 1908. 
Three 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 public comments in the 
development of the final rule. All of the respondents expressed support 
for the rule because maintaining the current thresholds for performance 
and payment bonds ensures continued payment protections benefiting 
small businesses. The Councils acknowledge this support. No changes 
were made to the final rule as a result of public comments.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold (SAT) and for Commercial Services and Commercial Products, 
Including Commercially Available Off-the-Shelf (COTS) Items

    This rule does not create new solicitation provisions or contract 
clauses or revise the text of any existing provisions or clauses. The 
rule does not change any current requirements in the provisions or 
clauses but does prevent future periodic inflation adjustments to 
acquisition-related thresholds.

IV. Expected Impact of the Rule

    This rule does not have a significant impact on the Government or 
industry because this rule maintains acquisition-related thresholds 
that have been in the FAR for several years without significant change.
    The FAR threshold for performance and payment bonds at FAR 28.102 
had one escalation adjustment in 2010, which raised the threshold by 
$50,000 from $100,000 and has since remained unchanged. The FAR 
threshold for alternatives to payment bonds at FAR 28.102 is currently 
$35,000; it was escalated twice, one in 2006 and again in 2015. Each 
adjustment raised the threshold by $5,000 starting from $25,000. Since 
the second adjustment, this threshold has also remained unchanged.
    Because the acquisition-related thresholds under FAR 28.102 have 
remained mostly unchanged, there is little expectation for future 
increases or changes that would affect Government and industry. There 
is also no expected cost impact of this rule since the acquisition-
related thresholds will remain the same. There may be some benefit of 
consistency to the public by ensuring that the thresholds remain the 
same.

[[Page 25477]]

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:

    DoD, GSA, and NASA are amending the Federal Acquisition 
Regulation (FAR) to implement section 861 of the National Defense 
Authorization Act (NDAA) for Fiscal Year (FY) 2022 (Pub. L. 117-81) 
that provides a statutory exception to the periodic inflation 
adjustments of acquisition-related thresholds for certain bond 
requirements.
    The objective of the final rule is to retain the current dollar 
thresholds for performance and payments bonds as well as the 
threshold for alternatives to such bonds.
    There were no significant issues raised by the public in 
response to the initial flexibility analysis provided in the 
proposed rule.
    The final rule applies to small entities performing construction 
services for the Government; however, the impact is expected to be 
de minimis. Contract actions with a value between $35,000 and 
$150,000 will still require an alternative to payment bonds for 
payment protection, and those with a value exceeding $150,000 will 
still require performance and payment bonds. The rule makes 
permanent the thresholds that have been in place for several years, 
resulting in no changes for any entity performing construction 
services.
    Data obtained from the Federal Procurement Data System (FPDS) 
for FY 2019, 2020, and 2021 indicates that an average of 678 unique 
small entities received an estimated 1,219 awards annually that 
require alternatives to payment bonds. FPDS data also indicates that 
an average of 1,340 unique small entities received an estimated 
2,706 awards that are subject to performance and payment bonds 
annually. Approximately 2,018 (678 + 1,340) unique small entities 
will continue to comply with current bond requirements as a result 
of this final rule.
    The final rule does not include additional reporting or record 
keeping requirements.
    There are no available alternatives to the final rule to 
accomplish the desired objective 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

    The Paperwork Reduction Act (44 U.S.C 3501-3521) applies to the 
information collection described in this rule; however, these changes 
to the FAR do not impose additional information collection requirements 
to the paperwork burden previously approved under OMB Control Number 
9000-0045, Bid Guarantees, Performance and Payment Bonds, and 
Alternative Payment Protection.

List of Subjects in 48 CFR Part 1

    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 1 as set forth 
below:

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

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

    Authority:  40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. 
chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 
20113.


0
2. Amend section 1.109 by revising paragraph (c)(1) to read as follows:


1.109  Statutory acquisition-related dollar thresholds--adjustment for 
inflation.

* * * * *
    (c) * * *
    (1) 40 U.S.C. chapter 31--
    (i) Subchapter III, Bonds; and
    (ii) Subchapter IV, Wage Rate Requirements (Construction);
* * * * *
[FR Doc. 2023-08198 Filed 4-25-23; 8:45 am]
BILLING CODE 6820-EP-P