Simplified acquisition and other thresholds going up

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Contracting officers, rejoice! The quincennial adjustment of various federal acquisition thresholds arrived August 30 in a final ruling that becomes applicable starting Oct 1.

Among the changes is a rise in the simplified acquisition threshold from $100,000 to $150,000. That means that procurements worth up to 50 percent more than the old threshold will now be eligible for the simplified acquisition process, under which agencies need not bother with formal evaluation plans, nor establishing a competitive range, nor conducting discussions, nor scoring offers. Also, a contracting officer, not necessarily a source selection team, can choose the contract winner under simplified acquisition procedures.

The final rule also raises the threshold level of a simplified acquisition "pilot program" (it's been in place since 1997) that allows the government to apply simplified acquisition procedures in procurements now worth up to $6.5 million, provided that a contracting officer "reasonably expects" based on market research that offers will include only commercial items not worth more than that. The old limit on the "pilot program" was $5.5 million.   

The distinction between procurements made through simplified acquisition procedure versus procurements under the threshold is slight, at least for a commercial items vendor. Mainly it matters because procurements above the threshold done with the procedure might be subject to scrutiny that acquisitions made under the threshold aren't. For example, contracting officers have to check a database called the Federal Awardee Performance and Integrity Information System (FAPIIS) for any procurement worth more than the threshold, but not for procurements worth less.

In addition, the final rule raises the contract value threshold after which prime contracts must submit a subcontracting plan. The old threshold for negotiated procurements, plus sealed bidding was $550,000. It now becomes $650,000.

The Truth In Negotiations Act's cost-or-pricing data threshold also gets elevated. Starting Oct. 1, contracting officers have an opportunity ask for cost-or-pricing data in order to determine price reasonableness starting with contracts worth $700,000. Until then, the threshold remains $650,000.

The Federal Acquisition Regulation discourages contracting officers from requesting cost-or-pricing data, even going so far as to mostly prohibit its use for price reasonableness determinations in the acquisition of commercial items.

Companies consider cost-or-pricing data a generally invasive tool, since if the government requests it, it's calling for all facts that affect price negotiations significantly.

Unchanged by the rule is the micro-purchase threshold, which holds fast generally at $3,000. Purchases made below the micro-purchase threshold don't require a contracting officer for completion. Above the threshold, however, only contracting officers in possession of a signed warrant from the agency's senior procurement executive can bind the government into a new contract.

For more:
- download the final quincennial thresholds adjustment rule (.pdf)
- download a matrix tracking all the changes (.pdf)

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