[Federal Register Volume 59, Number 240 (Thursday, December 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30605]

[[Page Unknown]]

[Federal Register: December 15, 1994]


48 CFR Parts 1, 3, 4, 13 and 25
[FAC 90-24, FAR Case 94-771, Item II]
RIN 9000-AG26

Federal Acquisition Regulation; Micro-Purchase Procedures
AGENCIES: Department of Defense (DOD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comment.


SUMMARY: The Department of Defense, General Services Administration, 
and the National Aeronautics and Space Administration have agreed to an 
interim rule to implement the new micro-purchase requirements of the 
Federal Acquisition Streamlining Act of 1994 (the Act). This regulatory 
action was not subject to Office of Management and Budget review under 
Executive Order 12866, dated September 30, 1993.
DATES: Effective Date: December 15, 1994.
    Comment Date: Comments should be submitted to the FAR Secretariat 
at the address shown below on or before February 13, 1995 to be 
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to: 
General Services Administration, FAR Secretariat (VRS), 18th & F 
Streets, NW, Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405.
Please cite FAC 90-24, FAR case 94-771 in all correspondence related to 
this case.
FOR FURTHER INFORMATION CONTACT: Ms. Diana Maykowskyj, the team leader 
of the Simplified Acquisition Procedures/FACNET Team, at (703) 274-6307 
in reference to this FAR case. For general information, contact the FAR 
Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAC 90-24, FAR case 94-771.
A. Background
    The Act, Pub. L. 103-355, provides the authority to streamline the 
acquisition process and minimize burdensome requirements unique to the 
Federal Government. Major changes that can be expected in the 
acquisition process as a result of the Act's implementation include 
changes in the areas of Commercial Item Acquisition, Simplified 
Acquisition Procedures, the Truth in Negotiations Act, and introduction 
of the Federal Acquisition Computer Network (FACNET).
    This notice announces FAR revisions developed under FAR case 94-
771. This interim rule implements the micro-purchase requirements of 
Pub. L. 103-355. The term ``micro-purchase'' is coined and defined by 
Pub. L. 103-355. Pub. L. 103-355 establishes the micro-purchase 
threshold at $2,500 and exempts purchases not exceeding the micro-
purchase threshold from the Buy American Act and certain small business 
requirements. It is noted that construction requirements are limited to 
$2,000 under the FAR 13.101 definition for micro-purchase to 
accommodate the Davis-Bacon Act requirements under Subpart 22.4. FAR 
13.105(a) has been amended to exempt micro-purchases from the 
requirement for small business set-asides. A more extensive revision to 
13.105 will be included in implementation of the full requirements of 
Pub. L. 103-355 pertaining to acquisitions not exceeding the simplified 
acquisition threshold. For micro-purchases, Pub. L. 103-355 requires 
competition only if prices are not considered reasonable. This rule 
provides for expanded use of the governmentwide commercial purchase 
card to take maximum advantage of the micro-purchase authority provided 
in Pub. L. 103-355 by delegating the authority, to the maximum extent 
practicable, to individuals in the offices that will be using the 
supplies or services to be purchased. Your attention is directed to the 
provisions at FAR 13.601(d) which indicates that such individuals are 
considered ``contracting officers'' within the meaning of FAR 2.101. 
The individuals, generally non-acquisition personnel, may be appointed 
under delegations of procurement authority in accordance with agency 
    The FAR Council is interested in an exchange of ideas and opinions 
with respect to the regulatory implementation of the Act. For that 
reason, the FAR Council is conducting a series of public meetings. 
However, the FAR Council has not scheduled a public meeting on this 
rule (FAR case 94-771) because of the clarifying and non-controversial 
nature of the rule. If the public believes such a meeting is needed 
with respect to this rule, a letter requesting a public meeting and 
outlining the nature of the requested meeting shall be submitted to and 
received by the FAR Secretariat (see ADDRESSES caption, above) on or 
before January 17, 1995. The FAR Council will consider such requests in 
determining whether a public meeting on this rule should be scheduled.

B. Regulatory Flexibility Act

    The changes may have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., because it implements the 
portion of the Act which eliminates the small business setaside for 
purchases not exceeding the micro-purchase threshold. However, full 
implementation of the Federal Acquisition Streamlining Act of 1994 will 
require that all actions exceeding the micro-purchase threshold but not 
exceeding the simplified acquisition threshold, $100,000, be set aside 
for small businesses. This will be an increase from the current 
requirement that all acquisitions less than $25,000 be set aside for 
small businesses. An Initial Regulatory Flexibility Analysis (IRFA) has 
been prepared and will be provided to the Chief Counsel for Advocacy 
for the Small Business Administration. A copy of the IRFA may be 
obtained from the FAR Secretariat. Comments are invited. Comments from 
small entities concerning the affected FAR subpart will be considered 
in accordance with 5 U.S.C. 610. Such comments must be submitted 
separately and cite 5 U.S.C 601, et seq. (FAR Case 94-771), in 

C. Paperwork Reduction Act

    The Paperwork Reduction Act does not apply because the changes to 
the FAR do not impose recordkeeping or information collection 
requirements, or collection of information from offerors, contractors, 
or members of the public which require the approval of OMB under 44 
U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

    A determination has been made under the authority of the Secretary 
of Defense (DOD), the Administrator of General Services (GSA), and the 
Administrator of the National Aeronautics and Space Administration 
(NASA) that compelling reasons exist to promulgate this interim rule 
without prior opportunity for public comment. This action is necessary 
because the Federal Acquisition Streamlining Act of 1994 requires 
implementation of the micro- purchase portion of the Act within 60 days 
of enactment. However, pursuant to Public Law 98-577 and FAR 1.501, 
public comments received in response to this interim rule will be 
considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 1, 3, 4, 13 and 25

    Government procurement.

    Dated: December 8, 1994.
Edward Loeb,
Deputy Project Manager for the Implementation of the Federal 
Acquisition Streamlining Act of 1994.

    Therefore, 48 CFR Parts 1, 3, 4, 13 and 25 are amended as set forth 
    1. The authority citation for 48 CFR Parts 1, 3, 4, 13 and 25 
continues to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).


    2. Section 1.603-3 is revised to read as follows:

1.603-3  Appointment.

    Contracting officers whose authority will be limited to micro-
purchases (see subpart 13.6) shall be appointed in writing in 
accordance with agency procedures. Other contracting officers shall be 
appointed in writing on a ``Certificate of Appointment'', SF 1402, 
which shall state any limitation on the scope of authority to be 
exercised, other than limitations contained in applicable law or 
regulation. Appointing officials shall maintain files containing copies 
of all Certificates of Appointment that have not been terminated.


    3. Section 3.104-4 is amended by adding paragraph (h)(5) to read as 

3.104-4  Definitions.

* * * * *
    (h) * * *
    (5) For purposes of 3.104-4(h) the term procurement official does 
not include contracting officers if their contracting authority is 
limited to the micro-purchase threshold (see 13.101) and the head of 
the contracting activity determines that it is unlikely that the 
individual will conduct acquisitions in a total amount greater than 
$20,000 in any 12-month period.
* * * * *


4.800  [Amended]

    4. Section 4.800 is amended by revising the reference ``13.106(c)'' 
to ``13.106(b)''.


    5. Section 13.101 is amended by adding the following definitions in 
alphabetical order to read as follows:

13.101  Definitions.

* * * * *
    Governmentwide commercial purchase card means a purchase card, 
similar in nature to a commercial credit card, issued to authorized 
agency officials for their use in acquiring supplies and services.
    Micro-purchase means an acquisition of supplies or services (except 
construction), the aggregate amount of which does not exceed $2,500. 
Micro-purchases for construction are limited to $2,000.
    Micro-purchase threshold means $2,500.
* * * * *
    6. Section 13.105 is amended by revising paragraph (a); in (d)(3) 
by removing ``(see 13.106(c))'' and inserting ``(see 13.106(b))'' in 
its place, and in (d)(4) by removing ``(see 13.106(b)(4))'' and 
inserting ``(see 13.106(a)(4))''. The revised text reads as follows:

13.105  Small business--small purchase set-asides.

    (a) Except as provided in paragraphs (b), (c), and (d) of this 
section, each acquisition of supplies or services that has an 
anticipated dollar value exceeding $2,500, but not exceeding $25,000, 
and is subject to small purchase procedures, shall be reserved 
exclusively for small business concerns. This shall be accomplished by 
using the category of set-asides established by Pub. L. 95-507, 
specifically for small purchases, identified as small business--small 
purchase set-asides established by Section 15(j) of the Small Business 
Act (15 U.S.C. 644(j)) (see Pub. L. 95-507).
* * * * *

13.106  [Amended]

    6. Section 13.106 is amended by removing paragraph (a) and 
redesignating paragraphs (b) and (c) as (a) and (b), respectively.

13.502  [Amended]

    7. Section 13.502(c) is amended in the last sentence by removing 
``(see 13.106(c))'' and inserting ``(see 13.106(b))'' in its place.
    8. Part 13 is amended by adding Subpart 13.6 to read as follows:

Subpart 13.6--Micro-Purchase

13.601  General.
13.602  Policy.
13.603  Soliciting competition, evaluation of quotes, and award.

Subpart 13.6--Micro-Purchase

13.601  General.

    (a) This subpart applies to purchases of supplies or services 
(except for construction) at or below the micro-purchase threshold. 
Micro-purchases for construction are limited to $2,000.
    (b) Micro-purchases may be awarded using any of the purchasing 
methods covered by part 13.
    (c) Agencies are encouraged to use the governmentwide commercial 
purchase card and electronic purchasing techniques, to the maximum 
extent practicable. The governmentwide commercial purchase card may be 
used to purchase and pay for micro-purchases in accordance with agency 
procedures. This is not intended to limit use of the purchase card to 
micro-purchases, if otherwise authorized under agency procedures.
    (d) Agency heads are encouraged to delegate micro-purchase 
authority to individuals who will be using the supplies or services 
being purchased (see 1.603-3). Individuals delegated this authority are 
contracting officers within the meaning of 2.101. See 3.104-4(h)(5) for 
procurement integrity requirements.

13.602  Policy.

    (a) Contracting officers shall comply with the requirements of part 
8, Required Sources of Supplies and Services.
    (b) Micro-purchases shall be distributed equitably among qualified 
    (c) Requirements aggregating more than the micro-purchase threshold 
shall not be broken down into several purchases that are less than the 
threshold merely to permit purchase under this subpart.

13.603  Soliciting competition, evaluation of quotes, and award.

    (a) Micro-purchases may be awarded without soliciting competitive 
quotations if the contracting officer determines that the price is 
    (b) The administrative cost of verifying the reasonableness of the 
price for purchases at or below the micro-purchase threshold may more 
than offset potential savings from detecting instances of overpricing. 
Therefore, action to verify price reasonableness need only be taken 
    (1) The contracting officer suspects or has information to indicate 
that the price may not be reasonable (e.g., comparison to the previous 
price paid or personal knowledge of the supply or service); or
    (2) Purchasing a supply or service for which no comparable pricing 
information is readily available (e.g., a supply or service that is not 
the same as, or is not similar to, other supplies or services that have 
recently been purchased on a competitive basis).
    (c) Prompt payment discounts should be solicited.


    9. Section 25.100 is revised to read as follows:

25.100  Scope of subpart.

    This subpart implements the Buy American Act (41 U.S.C. 10) and 
Executive Order 10582, December 17, 1954 (as amended). It applies to 
(a) supply contracts exceeding the micro-purchase threshold; and (b) 
contracts for services that involve the furnishing of supplies when the 
supply portion of the contract exceeds the micro-purchase threshold.

[FR Doc. 94-30605 Filed 12-13-94; 10:45 am]