Inflation Adjustment Of Acquisition-Related Thresholds In The FAR

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued a final rule on August 30, 2010 adjusting acquisition-related thresholds for inflation as set forth in section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005. 75 Fed. Reg. 53129. Section 807 dictates that acquisition-related thresholds must be adjusted for inflation every five years using the Consumer Price Index for all-urban consumers. Pub. L. No. 108-375, 118 Stat. 1811 (2004). This section does not allow for adjustments to thresholds contained in the Davis-Bacon Act, the Service Contract Act of 1965, or Title III of the Trade Agreements Act of 1979.

The final rule notes that some thresholds predicted in the proposed rule are different in the final rule “due to lower inflation than was projected at the time of publication of the proposed rule.” Therefore, thresholds of $13 million or greater contained in the proposed rule are proportionally lower in the final rule. Thresholds lower than $13 million generally did not change in the final rule due to rounding. The proposed rule was published on February 4, 2010 at 75 Fed. Reg. 5716.

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Published In: Government Contracting Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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