FAR Thresholds Adjusted for Inflation

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.

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