Under a final rule effective October 1, 2015, acquisition-related dollar thresholds in the Federal Acquisition Regulation (“FAR”) will be adjusted for inflation. Government contractors should be aware of these inflationary adjustments as they will have a number of wide-ranging impacts, including when certified cost and pricing data is required and when contractors are required to report the executive compensation of their first-tier subcontracts.
List of Adjusted Thresholds
The final rule specifically identified the following frequently used thresholds that will be adjusted for prime contracts issued on or after October 1, 2015:
- The micro-purchase threshold of $3,000 will increase to $3,500 (FAR 2.101).
- The threshold for use of simplified acquisition procedures for acquisition of commercial items will increase from $6.5 million to $7 million (FAR 13.500).
- The cost or pricing data threshold (FAR 15.403-4) and the statutorily equivalent Cost Accounting Standards threshold (FAR 30.201-4 and FAR clause 52.230-5) will increase from $700,000 to $750,000.
- The prime contractor subcontracting plan floor will increase from $650,000 to $700,000, but the construction threshold of $1.5 million will remain the same (FAR 19.702).
- The threshold for reporting first-tier subcontract information, including executive compensation, will increase from $25,000 to $30,000 (FAR Subpart 4.14 and FAR clause 52.204-10).
- The threshold for including the clause requiring contractors to provide equal employment opportunities to veterans will increase from $100,000 to $150,000 (FAR 22.1303 and FAR clause 52.222-35).
- The threshold requiring contractors to flowdown the clause regarding a contractor’s Code of Business Ethics and Conduct will increase from $5 million to $5.5 million (FAR clause 52.203-15).
- The threshold restricting subcontracts with a contractor that has been debarred, suspended, or proposed for debarment will increase from $30,000 to $35,000 (FAR 9.409 and FAR clause 52.209-6).
Contractors can find the full list of the inflationary adjustments in the final rule, 80 Federal Register 38293 (7/2/15), which is available here.
Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and colleagues. If you have any questions about this alert or would like to discuss the topic further, please contact your Foley attorney or the following individuals:
Erin L. Toomey
Micah T. Zomer