[Federal Register Volume 75, Number 12 (Wednesday, January 20, 2010)]
[Proposed Rules]
[Pages 3187-3190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-892]
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 205, 207, 208, 209, 211, 215, 216, 217, 219, 225, 228,
232, 237, 246, 250, 252
Defense Federal Acquisition Regulation Supplement: Inflation
Adjustment of Acquisition-Related Thresholds (DFARS Case 2009-D003)
AGENCY: Defense Acquisition Regulations System. Department of Defense
(DoD).
ACTION: Proposed rule with request for comments.
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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition
Regulation Supplement (DFARS) to implement Section 807 of the Ronald W.
Reagan National Defense Authorization Act for Fiscal Year 2005. Section
807 provides for adjustment every 5 years of statutory acquisition-
related thresholds, except for Davis-Bacon Act, Service Contract Act,
and trade agreements thresholds. This case also reviews nonstatutory
acquisition-related thresholds for adjustment in 2010.
DATES: Comments on the proposed rule should be submitted in writing to
the address shown below on or before March 22, 2010, to be considered
in the formation of the final rule.
ADDRESSES: You may submit comments, identified by DFARS Case 2009-D003,
using any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov. Follow the
instructions for submitting comments.
E-mail: [email protected]. Include DFARS Case 2009-D003 in the subject
line of the message.
Fax: 703-602-0350.
Mail: Defense Acquisition Regulations System, Attn: Ms. Amy
Williams, OUSD(AT&L)DPAP(DARS), 3060 Defense Pentagon, Room 3B855,
Washington, DC 20301-3060.
Hand Delivery/Courier: Defense Acquisition Regulations System,
Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-
3402.
Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.
FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.
SUPPLEMENTARY INFORMATION:
A. Background
This rule proposes to amend multiple DFARS parts to implement
Section 807 of the Ronald W. Reagan National Defense Authorization Act
for Fiscal Year 2005 (Pub. L. 108-375). Section 807 provides for
adjustment every 5 years (in years evenly divisible by 5) of statutory
acquisition-related thresholds, except for Davis-Bacon Act, Service
Contract Act, and trade agreements thresholds. This case also reviews
nonstatutory DFARS acquisition-related thresholds for adjustment in
2010. FAR case 2008-024 proposes comparable changes to acquisition-
related thresholds in the FAR.
This is the second review of DFARS acquisition-related thresholds.
The last review was conducted under DFARS case 2004-D022. The final
rule was published in the Federal Register on December 19, 2006 (71 FR
75891).
B. Analysis
1. What is an acquisition-related threshold?
This case builds on the review of DFARS thresholds in 2005 and uses
the same interpretation of the statutory definition of acquisition-
related threshold. The statute defines an
[[Page 3188]]
acquisition-related dollar threshold as a dollar threshold that is
specified in law as a factor in defining the scope of the applicability
of a policy, procedure, requirement, or restriction provided in that
law to the procurement of property or services by an Executive agency,
as determined by the FAR Council.
There are other thresholds in the DFARS that, while not meeting
this statutory definition of ``acquisition-related,'' nevertheless meet
all the other criteria. These thresholds may have their origin in
Executive order or regulation.
Therefore, as used in this case, an acquisition-related threshold
is a threshold that is specified in law, Executive order, or regulation
as a factor in defining the scope of the applicability of a policy,
procedure, requirement, or restriction provided in that law, Executive
order, or regulation to the procurement of property or services by an
Executive agency, as determined by the FAR Council. Acquisition-related
thresholds are generally tied to the value of a contract, subcontract,
or modification.
Examples of thresholds that are not viewed as ``acquisition-
related'' as defined in this case are thresholds relating to claims,
penalties, withholding, payments, required levels of insurance, small
business size standards, liquidated damages, etc. This report does not
address thresholds that are not acquisition-related.
2. What acquisition-related thresholds are not subject to escalation
adjustment under this case?
The statute does not permit escalation of acquisition-related
thresholds established by the Davis Bacon Act, the Service Contract
Act, or trade agreements.
The statute does not authorize DoD to escalate thresholds
originating in Executive order or the implementing agency (such as the
Department of Labor or the Small Business Administration), unless the
Executive order or agency regulations are first amended.
3. How did DoD analyze a statutory acquisition-related threshold?
If an acquisition-related threshold is based on statute, the matrix
at {to be provided in final rule{time} identifies the statute, and the
statutory threshold, both the original threshold and any revision to it
in 2006.
With the exception of thresholds set by the Davis-Bacon Act,
Service Contract Act, and trade agreements, the statute requires that
the FAR Council adjust the acquisition-related thresholds for inflation
using the Consumer Price Index (CPI) for all-urban consumers.
Acquisition-related thresholds in statutes that were in effect on
October 1, 2000, are only subject to escalation from that date forward.
For purposes of this proposed rule, the matrix includes calculation of
escalation based on the CPI from October 2000 to April 2010. Inflation
from the average CPI value for 2007 to the average value for 2008 was
3.8 percent. DoD has currently estimated the inflation for the next
year at 4.2 percent, but will subsequently adjust as necessary before
issuance of the final rule. Acquisition-related thresholds in statutes
that took effect after October 1, 2000, are escalated from the date
that they took effect. Once the escalation factor is applied to the
acquisition-related threshold, then the threshold must be rounded as
follows:
<$10,000.................................. Nearest $500
$10,000-<$100,000......................... Nearest $5,000
$100,000-<$1,000,000...................... Nearest $50,000
$1,000,000 or more........................ Nearest $500,000
The calculations in this proposed rule are all based on the base
year amount, because escalated amounts in the 2005 rule were subject to
rounding and using them as the base would distort future calculations.
In 2005, thresholds of $1,000, $10,000, $100,000, and $1,000,000,
although subject to inflation calculation, did not actually change,
because the inflation in 2005 was insufficient to overcome the rounding
requirements. These thresholds will now escalate because of 5
additional years of inflation.
Section 807(c) of the statute states that this statute supersedes
the applicability of any other provision of law that provides for the
adjustment of any acquisition-related threshold that is adjustable
under this statute. The thresholds for defining a major system were
previously stated in Fiscal Year 1990 constant dollars for DoD and in
Fiscal Year 1980 constant dollars for civilian agencies. The 2005 rule
converted these major system thresholds to current year dollars, as of
the date that the statute was enacted, that will now be adjusted every
5 years.
This proposed rule has been coordinated with the Small Business
Administration in areas of the regulation for which they are the lead
agency.
4. How does DoD analyze a nonstatutory acquisition-related threshold?
No statutory authorization is required to escalate thresholds that
were set as policy within the DFARS. Escalation of the DFARS policy
acquisition-related thresholds is generally recommended using the same
formula applied to the statutory thresholds, unless a reason has been
provided for not doing so. Escalation is calculated using the same
procedures as were explained for the statutory thresholds, to provide
consistency.
This rule was not subject to Office of Management and Budget review
under Executive Order 12866, dated September 30, 1993.
C. Regulatory Flexibility Act
DoD does not anticipate that this rule will have a substantial
economic impact on small business, because the adjustment of
acquisition-related thresholds for inflation is intended to maintain
the status quo. DoD invites comments from small businesses and other
interested parties. DoD invites comments from small business concerns
and other interested parties on the expected impact of this rule on
small entities.
DoD will also consider comments from small entities concerning the
existing regulations in subparts affected by this rule in accordance
with 5 U.S.C. 610. Interested parties must submit such comments
separately and should cite 5 U.S.C. 610 (DFARS Case 2009-D003) in
correspondence.
D. Paperwork Reduction Act
The Paperwork Reduction Act does apply. The proposed changes to the
DFARS do not impose new information collection requirements that
require the approval of the Office of Management and Budget under 44
U.S.C. 3501, et seq. They maintain the current information collection
requirements at the status quo by adjusting the thresholds for
inflation. Government procurement.
Amy G. Williams,
Editor, Defense Acquisition Regulations System.
Therefore, 48 CFR parts 205, 207, 208, 209, 211, 215, 216, 217,
219, 225, 228, 232, 237, 246, 250, and 252 are proposed to be amended
as follows:
1. The authority citation for 48 CFR parts 205, 207, 208, 209, 211,
215, 216, 217, 219, 225, 228, 232, 237, 246, 250, and 252 continues to
read as follows:
Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.
PART 205--PUBLICIZING CONTRACT ACTIONS
205.303 [Amended]
2. Section 205.303 is amended by removing ``$5.5 million'' and
adding in its place ``$6.5 million'' in the following places:
[[Page 3189]]
a. In paragraph (a)(i) introductory text, in the first and second
sentences;
b. In paragraph (a)(i)(A), in the second sentence; and
c. In paragraph (a)(i)(B), in the first and second sentences.
PART 207--ACQUISITION PLANNING
207.170-3 [Amended]
3. Section 207.170-3 is amended in paragraph (a) introductory text
by removing ``$5.5 million'' and adding in its place ``$6 million''.
PART 208--REQUIRED SOURCES OF SUPPLIES AND SERVICES
208.405-70 [Amended]
4. Section 208.405-70 is amended by removing ``$100,000'' and
adding in its place ``$150,000'' in the following places:
a. Paragraph (b) introductory text; and
b. Paragraph (c) introductory text.
PART 209--CONTRACTOR QUALIFICATIONS
209.104-1 [Amended]
5. Section 209.104-1 is amended in paragraph (g)(i)(A) introductory
text by removing ``$100,000'' and adding in its place ``$150,000''.
6. Section 209.104-70 is amended in paragraph (a) by removing
``$100,000'' and adding in its place ``$150,000''.
209.409 [Amended]
7. Section 209.409 is amended in paragraph (b) by removing
``$100,000'' and adding in its place ``$150,000''.
PART 211--DESCRIBING AGENCY NEEDS
211.503 [Amended]
8. Section 211.503 is amended in paragraph (b), in the first and
second sentences, by removing ``$550,000'' and adding in its place
``$650,000''.
PART 215--CONTRACTING BY NEGOTIATION
215.407-2 [Amended]
9. Section 215.407-2 is amended in paragraph (e)(1) by removing
``$1 million'' and adding in its place ``$1.5 million''.
PART 216--TYPES OF CONTRACTS
216.505-70 [Amended]
10. Section 216.505-70 is amended by removing ``$100,000'' and
adding in its place ``$150,000'' in the following places:
a. In paragraph (a)(2);
b. In paragraph (b) introductory text; and
c. In paragraph (c) introductory text.
PART 217--SPECIAL CONTRACTING METHODS
217.170 [Amended]
11. Section 217.170 is amended in paragraph (d)(1)(i) by removing
``$572.5 million'' and adding in its place ``$637.5 million''.
217.171 [Amended]
12. Section 217.171 is amended in paragraph (a)(6) by removing
``$572.5 million'' and adding in its place ``$637.5 million''.
PART 219--SMALL BUSINESS PROGRAMS
13. Section 219.201 is amended by revising paragraph (d)(10)(A) to
read as follows:
219.201 General policy.
(d) * * *
(10) * * *
(A) Reviewing and making recommendations for all acquisitions
(including orders placed against Federal Supply Schedule contracts)
over $10,000, except those under the simplified acquisition threshold
that are totally set aside for small business concerns in accordance
with FAR 19.502-2. Follow the procedures at PGI 219.201(d)(10)
regarding such reviews.
* * * * *
219.502-1 [Amended]
14. Section 219.502-1 is amended in paragraph (2) by removing
``$300,000'' and adding in its place ``$350,000''.
219.502-2 [Amended]
15. Section 219.502-2 is amended by:
a. Removing ``$1 million'' from paragraph (a)(ii) and adding in its
place ``$1.5 million''; and
b. Removing ``$300,000'' from paragraph (a)(iii) and adding in its
place ``$350,000''.
219.1005 [Amended]
16. Section 219.1005 is amended in paragraphs (a)(i)(B), (a)(i)(C),
and (a)(i)(D) by removing ``$300,000'' and adding in its place
``$350,000''.
PART 225--FOREIGN ACQUISITION
225.103 [Amended]
17. Section 225.103 is amended in paragraphs (a)(ii)(B)(2),
(a)(ii)(B)(3), (b)(ii)(B), and (b)(ii)(C) by removing ``$1,000,000''
and adding in its place ``$1.5 million''.
225.7204 [Amended]
18. Section 225.7204 is amended as follows:
a. In paragraphs (a) and (b) by removing ``$11.5 million'' and
adding in its place ``$13 million''.
b. In paragraph (c) by removing ``$550,000'' and adding in its
place ``$650,000''.
225.7703-2 [Amended]
19. Section 225.7703-2 is amended in paragraphs (b)(2)(i) and
(b)(2)(ii) by removing ``$78.5 million'' and adding in its place ``$87
million''.
PART 228--BONDS AND INSURANCE
228.102-1 [Amended]
20. Section 228.102-1 is amended in paragraph (1) by removing
``$100,000'' and adding in its place ``$150,000''.
PART 232--CONTRACT FINANCING
232.404 [Amended]
21. Section 232.404 is amended in paragraph (a)(9) by removing
``$3,000'' and adding in its place ``the micro-purchase threshold''.
232.502-1 [Amended]
22. Section 232.502-1 is amended in paragraph (b)(1) by removing
``$55,000'' and adding in its place ``$65,000''.
237.170-2 [Amended]
23. Section 237.170-2 is amended in paragraphs (a)(1) and (2) by
removing ``$78.5 million'' and adding in its place ``$87 million''.
PART 246--QUALITY ASSURANCE
246.402 [Amended]
24. Section 246.402 is amended in the introductory text by removing
``$250,000'' and adding in its place ``$300,000''.
PART 250--EXTRAORDINARY CONTRACTUAL ACTIONS AND THE SAFETY ACT
250.102-1 [Amended]
25. Section 250.102-1 is amended in paragraph (b) by removing
``$55,000'' and adding in its place ``$65,000''.
250.102-1-70 [Amended]
26. Section 250.102-1-70 is amended in paragraph (b)(1) by removing
``$55,000'' and adding in its place ``$65,000''.
PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
252.211-7000 [Amended]
27. Section 252.211-7000 is amended as follows:
a. By revising the clause date to read ``(DATE)''; and
[[Page 3190]]
b. In paragraph (d) by removing ``$1 million'' and adding in its
place ``$1.5 million''.
252.225-7003 [Amended]
28. Section 252.225-7003 is amended as follows:
a. By revising the clause date to read ``(DATE)'';
b. In paragraph (b)(1) by removing ``$11.5 million'' and adding in
its place ``$13 million''; and
c. In paragraph (b)(2)(i) by removing ``$550,000'' and adding in
its place ``$650,000''.
252.225-7004 [Amended]
29. Section 252.225-7004 is amended as follows:
a. By revising the clause date to read ``(DATE)''; and
b. In paragraph (b)(1) by removing ``$550,000'' and adding in its
place ``$650,000''.
252.225-7006 [Amended]
30. Section 252.225-7006 is amended as follows:
a. By revising the clause date to read ``(DATE)''; and
b. In paragraph (f)(1) by removing $550,000'' and adding in its
place $650,000''.
252.249-7002 [Amended]
31. Section 252.249-7002 is amended as follows:
a. By revising the clause date to read ``(DATE)'';
b. In paragraph (d)(1) by removing $550,000'' and adding in its
place ``$650,000''; and
c. In paragraphs (d)(2)(i) and (ii) by removing ``$100,000'' and
adding in its place ``$150,000''.
[FR Doc. 2010-892 Filed 1-19-10; 8:45 am]
BILLING CODE 5001-08-P