Defense Federal Acquisition Regulation Supplement: Inflation Adjustment of Acquisition-Related Thresholds (DFARS Case 2014-D025)
Federal Register, Volume 79 Issue 215 (Thursday, November 6, 2014)
Federal Register Volume 79, Number 215 (Thursday, November 6, 2014)
Proposed Rules
Pages 65912-65917
From the Federal Register Online via the Government Printing Office www.gpo.gov
FR Doc No: 2014-26266
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DEPARTMENT OF DEFENSE
Defense Acquisition Regulations System
48 CFR Parts 202, 203, 205, 207, 211, 212, 215, 217, 218, 219, 225, 228, 234, 236, 237, 250, and 252
RIN 0750-AI43
Defense Federal Acquisition Regulation Supplement: Inflation Adjustment of Acquisition-Related Thresholds (DFARS Case 2014-D025)
AGENCY: Defense Acquisition Regulations System, Department of Defense (DoD).
ACTION: Proposed rule.
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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement (DFARS) to further implement the U.S.C. statute on inflation adjustment of acquisition-related dollar thresholds. This statute requires an adjustment every five years of acquisition-related thresholds for inflation using the Consumer Price Index for all urban consumers, except for the Construction Wage Rate Requirements statute (Davis-Bacon Act), Service Contract Labor Standards statute, and trade agreements thresholds. DoD is also proposing to use the same methodology to adjust some nonstatutory DFARS acquisition-related thresholds in 2015.
DATES: Comment Date: Comments on the proposed rule should be submitted in writing to the address shown below on or before January 5, 2015, to be considered in the formation of the final rule.
ADDRESSES: Submit comments identified by DFARS Case 2014-D025, using any of the following methods:
cir Regulations.gov: http://www.regulations.gov. Submit comments via the Federal eRulemaking portal by entering ``DFARS Case 2014-D025'' under the heading ``Enter keyword or ID'' and selecting ``Search.'' Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 2014-D025.'' Follow the instructions provided at the ``Submit a Comment'' screen. Please include your name, company name (if any), and ``DFARS Case 2014-D025'' on your attached document.
cir Email: osd.dfars@mail.mil. Include DFARS Case 2014-D025 in the subject line of the message.
cir Fax: 571-372-6094.
cir Mail: Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, OUSD (AT&L) DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060.
Page 65913
Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To confirm receipt of your comment(s), please check www.regulations.gov, approximately two to three days after submission to verify posting (except allow 30 days for posting of comments submitted by mail).
FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, Defense Acquisition Regulations System, OUSD (AT&L) DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 20301-3060. Telephone 571-372-6106.
SUPPLEMENTARY INFORMATION:
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Background
This rule proposes to amend multiple DFARS parts to further implement 41 U.S.C. 1908. Section 1908 requires an adjustment every five years (on October 1 of each year evenly divisible by five) of statutory acquisition-related thresholds for inflation, using the Consumer Price Index (CPI) for all urban consumers, except for the Construction Wage Rate Requirements statute (Davis-Bacon Act), Service Contract Labor Standards statute, and trade agreements thresholds (see FAR 1.109). As a matter of policy, DoD is also proposing to use the same methodology to adjust some nonstatutory DFARS acquisition-related thresholds. All proposed threshold adjustments would become effective on October 1, 2015.
FAR case 2014-022 proposes comparable changes to acquisition-
related thresholds in the FAR.
This is the third review of DFARS acquisition-related thresholds since the statute was enacted on October 28, 2004 (section 807 of the National Defense Authorization Act for Fiscal Year (FY) 2004). The last review was conducted under DFARS case 2009-D003. The final rule was published under that case in the Federal Register on August 2, 2010 (75 FR 45072), effective October 1, 2010.
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Analysis
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What is an acquisition-related threshold?
This case builds on the review of DFARS thresholds in 2005 and 2010, using the same interpretation of an acquisition-related threshold. 41 U.S.C. 1908 is applicable to ``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 the FAR Council determines.''
There are other thresholds in the DFARS that, while not specified in law, nevertheless meet all the other criteria. These thresholds may have their origin in Executive order or regulation.
Therefore, as used in this case, ``acquisition-related threshold'' has a broader meaning, i.e., 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 ``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.
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What acquisition-related thresholds are not subject to escalation adjustment under this case?
41 U.S.C. 1908 does not permit escalation of acquisition-related thresholds established by the Construction Wage Rate Requirements statute (Davis Bacon Act), the Service Contract Labor Standards statute, or the United States Trade Representative pursuant to the authority of the Trade Agreements Act of 1979.
Also, 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.
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How does DoD analyze escalation of a statutory acquisition-related threshold?
If an acquisition-related threshold is based on statute, the matrix at http://www.acq.osd.mil/dpap/dars/pgi/docs/2014-D025_(p)_TAB_E_matrix_Sep_12_14.xls identifies the statute, and the statutory threshold, including the original threshold and any subsequent revisions to it.
With the exception of thresholds set by the Construction Wage Rate Requirements statute (Davis Bacon Act), the Service Contract Labor Standards statute, and trade agreements, 41 U.S.C. 1908 requires adjustment of 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. Acquisition-
related thresholds in statutes that took effect after October 1, 2000, are escalated from the date that they took effect. For purposes of this proposed rule, the matrix includes calculation of escalation based on the estimated CPI value for March 2015 (currently estimated at 243.0) divided by the CPI for the date of enactment of the statute or regulation (October 2000, for statutes enacted prior to October 1, 2000). DoD will subsequently adjust as necessary before issuance of the final rule.
Once the escalation factor is applied to the acquisition-related threshold, then statutory thresholds must be rounded as follows:
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