Defense Federal Acquisition Regulation Supplement: Inflation Adjustment of Acquisition-Related Thresholds (DFARS Case 2009-D003)
Federal Register: January 20, 2010 (Volume 75, Number 12)
Proposed Rules
Page 3187-3190
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DOCID:fr20ja10-23
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.
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: dfars@osd.mil. 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:
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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).
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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
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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:
