[Federal Register Volume 71, Number 243 (Tuesday, December 19, 2006)]
[Rules and Regulations]
[Pages 75891-75893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-21513]


-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 201, 205, 207, 211, 217, 219, 223, 225, 228, 232, 237, 
and 252

RIN 0750-AF16


Defense Federal Acquisition Regulation Supplement; Inflation 
Adjustment of Acquisition-Related Thresholds (DFARS Case 2004-D022)

AGENCY: Defense Acquisition Regulations System, Department of Defense 
(DoD).

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: DoD has issued a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to adjust acquisition-related 
thresholds for inflation. Section 807 of the National Defense 
Authorization Act for Fiscal Year 2005 requires periodic adjustment of 
statutory acquisition-related dollar thresholds, except those 
established by the Davis-Bacon Act, the Service Contract Act, or trade 
agreements. This rule also amends other acquisition-related thresholds 
that are BASED on policy rather than statute.

DATES: Effective Date: December 19, 2006.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, Defense Acquisition 
Regulations System, OUSD (AT&L) DPAP (DARS), IMD 3C132, 3062 Defense 
Pentagon, Washington, DC 20301-3062. Telephone (703) 602-0328; 
facsimile (703) 602-0350. Please cite DFARS Case 2004-D022.

SUPPLEMENTARY INFORMATION:

A. Background

    This final rule implements Section 807 of the National Defense 
Authorization Act for Fiscal Year 2005 (Pub. L. 108-375). Section 807 
provides for adjustment of statutory acquisition-related dollar 
thresholds every 5 years, except for those established by the Davis-
Bacon Act, the Service Contract Act, or trade agreements. This case 
presented an opportunity to review all acquisition-related dollar 
thresholds, including those that are non-statutory. DoD published a 
proposed rule at 71 FR 3446 on January 23, 2006. DoD received one 
comment from a public-private partnership in response to the proposed 
rule. That comment related to the proposed increase in the micro-
purchase spending limit for the General Services Administration 
SmartPay Purchase Card Program. The comment did not specifically relate 
to this DFARS case and, therefore, has been forwarded to the General 
Services Administration for consideration.
    A matrix showing the thresholds reviewed in preparation of this 
final rule is available at http://www.acq.osd.mil/dpap/dars/dfars/changenotice/index.htm, within the change notice summary containing the 
same date as this final rule. The statute requires adjustment of 
acquisition-related thresholds for inflation using the Consumer Price 
Index for all-urban consumers. Acquisition-related thresholds in 
statutes that were in effect on October 1, 2000, are subject to 5 years 
of inflation. The inflation adjustment factors in the proposed rule 
were calculated on the basis of December 2004 data. For the final rule, 
data through October 2005 was used. This resulted in a slight increase 
in the calculated inflation adjustment factors. For the 5-year period 
from October 2000 through October 2005, the inflation adjustment factor 
increased from 13 percent to 14.5 percent. However, due to rounding, 
most thresholds shown in the proposed rule did not change. The 
exceptions are--
     DFARS 217.170 and 217.171 (Multiyear Contracting)--
Increased from $565.5 million to $572.5 million; and
     DFARS 237.170-2 (Service Contracting)--Increased from 
$77.5 million to $78.5 million.
    The threshold at DFARS 207.170-3 (Consolidation of Contract 
Requirements) is the only threshold in the final rule that was not 
addressed in the proposed rule, because the calculated threshold now 
rounds up to $5.5 million, from $5 million.
    The threshold at DFARS 216.203-4, for use of the economic price

[[Page 75892]]

adjustment clause at FAR 52.216-4, was increased from $50,000 to 
$55,000 in the proposed rule. This threshold change is no longer 
applicable as a result of the final rule published at 71 FR 39006 on 
July 11, 2006, which specified the simplified acquisition threshold as 
the general threshold for DoD use of the FAR economic price adjustment 
clauses.
    The threshold at DFARS 236.601, for congressional notification of 
certain architect-engineer or construction design contracts, was 
increased from $500,000 to $550,000 in the proposed rule. This 
threshold change is no longer applicable as a result of the interim 
rule published at 71 FR 58540 on October 4, 2006, which increased the 
threshold to $1 million to implement a statutory change.
    The threshold in the clause at DFARS 252.232-7009, Mandatory 
Payment by Governmentwide Commercial Purchase Card, was increased from 
$2,500 to $3,000 in the proposed rule. The final rule revises this 
threshold to the micro-purchase threshold, for consistency with the 
corresponding clause prescription at DFARS 232.1110.
    This rule was not subject to Office of Management and Budget review 
under Executive Order 12866, dated September 30, 1993.

B. Regulatory Flexibility Act

    DoD certifies that this final rule will not 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 the adjustment of acquisition-related dollar thresholds is 
intended to keep pace with inflation and thus maintain the status quo.

C. Paperwork Reduction Act

    This rule does not impose any new information collection 
requirements that require the approval of the Office of Management and 
Budget (OMB) under 44 U.S.C. 3501, et seq. The information collection 
requirements of the provision and clauses at 252.225-7003, 252.225-
7004, and 252.225-7006 are approved for use through May 31, 2007, under 
OMB Control Number 0704-0229.

List of Subjects in 48 CFR Parts 201, 205, 207, 211, 217, 219, 223, 
225, 228, 232, 237, and 252

    Government procurement.

Michele P. Peterson,
Editor, Defense Acquisition Regulations System.

0
Therefore, 48 CFR Parts 201, 205, 207, 211, 217, 219, 223, 225, 228, 
232, 237, and 252 are amended as follows:
0
1. The authority citation for 48 CFR Parts 201, 205, 207, 211, 217, 
219, 223, 225, 228, 232, 237, and 252 continues to read as follows:

    Authority: 41 U.S.C. 421 and 48 CFR Chapter 1.

PART 201--FEDERAL ACQUISITION REGULATIONS SYSTEM

0
2. Section 201.109 is added to read as follows:


201.109  Statutory acquisition-related dollar thresholds-adjustment for 
inflation.

    (d) A matrix showing the most recent escalation adjustments of 
statutory acquisition-related dollar thresholds is available at PGI 
201.109.

PART 205--PUBLICIZING CONTRACT ACTIONS


205.303  [Amended]

0
3. Section 205.303 is amended by removing ``$5 million'' and adding in 
its place ``$5.5 million'' as follows:
0
a. In paragraph (a)(i) introductory text, in the first and second 
sentences;
0
b. In paragraph (a)(i)(A), in the second sentence; and
0
c. In paragraph (a)(i)(B), in the first and second sentences.

PART 207--ACQUISITION PLANNING


207.170-3   [Amended]

0
4. Section 207.170-3 is amended in paragraph (a) introductory text by 
removing ``$5,000,000'' and adding in its place ``$5.5 million''.

PART 211--DESCRIBING AGENCY NEEDS


211.503   [Amended]

0
5. Section 211.503 is amended in paragraph (b), in the first and second 
sentences, by removing ``$500,000'' and adding in its place 
``$550,000''.

PART 217--SPECIAL CONTRACTING METHODS

0
6. Section 217.170 is amended by revising paragraph (d)(1)(i) to read 
as follows:


217.170  General.

* * * * *
    (d)(1) * * *
    (i) Exceed $500 million for supplies (see 217.172(c) and 
217.172(e)(4)) or $572.5 million for services (see 217.171(a)(6));
* * * * *


217.171  [Amended]

0
7. Section 217.171 is amended in paragraph (a)(6) by removing ``$500 
million'' and adding in its place ``$572.5 million''.

PART 219--SMALL BUSINESS PROGRAMS


219.502-2   [Amended]

0
8. Section 219.502-2 is amended in paragraph (a)(i) by removing ``$2 
million'' and adding in its place ``$2.5 million''.

PART 223--ENVIRONMENT, ENERGY AND WATER EFFICIENCY, RENEWABLE 
ENERGY TECHNOLOGIES, OCCUPATIONAL SAFETY, AND DRUG-FREE WORKPLACE

0
9. Section 223.803 is revised to read as follows:


223.803  Policy.

    No DoD contract may include a specification or standard that 
requires the use of a class I ozone-depleting substance or that can be 
met only through the use of such a substance unless the inclusion of 
the specification or standard is specifically authorized at a level no 
lower than a general or flag officer or a member of the Senior 
Executive Service of the requiring activity in accordance with Section 
326, Public Law 102-484 (10 U.S.C. 2301 (repealed) note). This 
restriction is in addition to any imposed by the Clean Air Act and 
applies after June 1, 1993, to all DoD contracts, regardless of place 
of performance.

PART 225--FOREIGN ACQUISITION


225.7204   [Amended]

0
10. Section 225.7204 is amended as follows:
0
a. In paragraphs (a) and (b) by removing ``$10 million'' and adding in 
its place ``$11.5 million''; and
0
b. In paragraph (c) by removing ``$500,000'' and adding in its place 
``$550,000''.

PART 228--BONDS AND INSURANCE


228.102-1   [Amended]

0
11. Section 228.102-1 is amended in the second sentence of the 
introductory text and in paragraph (1) by removing ``$25,000'' and 
adding in its place ``$30,000''.

PART 232--CONTRACT FINANCING


232.404   [Amended]

0
12. Section 232.404 is amended in paragraph (a)(9) by removing 
``$2,500'' and adding in its place ``$3,000''.

[[Page 75893]]

232.502-1  [Amended]

0
13. Section 232.502-1 is amended in paragraph (b)(1) by removing 
``$50,000'' and adding in its place ``$55,000''.

PART 237--SERVICE CONTRACTING


237.170-2   [Amended]

0
14. Section 237.170-2 is amended in paragraphs (a)(1) and (2) by 
removing ``$50,000,000'' and adding in its place ``$78.5 million''.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

0
15. Section 252.209-7004 is amended by revising the clause date and 
paragraph (a) to read as follows:


252.209-7004  Subcontracting with Firms That are Owned or Controlled by 
the Government of a Terrorist Country.

* * * * *

Subcontracting With Firms That are Owned or Controlled by the 
Government of a Terrorist Country (Dec 2006)

    (a) Unless the Government determines that there is a compelling 
reason to do so, the Contractor shall not enter into any subcontract in 
excess of $30,000 with a firm, or a subsidiary of a firm, that is 
identified in the Excluded Parties List System as being ineligible for 
the award of Defense contracts or subcontracts because it is owned or 
controlled by the government of a terrorist country.
* * * * *


252.225-7003  [Amended]

0
16. Section 252.225-7003 is amended as follows:
0
a. By revising the clause date to read ``(DEC 2006)'';
0
b. In paragraph (b)(1) by removing ``$10 million'' and adding in its 
place ``$11.5 million''; and
0
c. In paragraph (b)(2)(i) by removing ``$500,000'' and adding in its 
place ``$550,000''.


252.225-7004  [Amended]

0
17. Section 252.225-7004 is amended as follows:
0
a. By revising the clause date to read ``(DEC 2006)''; and
0
b. In paragraph (b)(1) by removing ``$500,000'' and adding in its place 
``$550,000''.


252.225-7006  [Amended]

0
18. Section 252.225-7006 is amended as follows:
0
a. By revising the clause date to read ``(DEC 2006)''; and
0
b. In paragraph (f)(1) by removing ``$500,000'' and adding in its place 
``$550,000''.


252.232-7009  [Amended]

0
19. Section 252.232-7009 is amended as follows:
0
a. By revising the clause date to read ``(DEC 2006)''; and
0
b. By removing ``$2,500'' and adding in its place ``the micro-purchase 
threshold in Part 2 of the Federal Acquisition Regulation,''.


252.249-7002  [Amended]

0
20. Section 252.249-7002 is amended as follows:
0
a. By revising the clause date to read ``(DEC 2006)''; and
0
b. In paragraph (d)(1) by removing ``$500,000'' and adding in its place 
``$550,000''.

 [FR Doc. E6-21513 Filed 12-18-06; 8:45 am]
BILLING CODE 5001-08-P