FAR Thresholds Adjusted for Inflation

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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).

The full list of the inflationary adjustments, contractors can find the final rule, 80 Federal Register 38293 (7/2/15), is available here.

 

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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