[Federal Register Volume 85, Number 189 (Tuesday, September 29, 2020)]
[Rules and Regulations]
[Pages 61502-61504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21122]


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DEPARTMENT OF DEFENSE

48 CFR Parts 203, 205, 211, 212, 215, 217, 219, 225, 228, 236, 237, 
246, 250, and 252

[Docket DARS-2020-0002]
RIN 0750-AK76


Defense Federal Acquisition Regulation Supplement: Inflation 
Adjustment of Acquisition-Related Thresholds (DFARS Case 2019-D036)

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

ACTION: Final rule.

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SUMMARY: DoD is issuing a final rule amending the Defense Federal 
Acquisition Regulation Supplement (DFARS) to implement the inflation 
adjustment of acquisition-related dollar thresholds. A statute requires 
an adjustment every five years of acquisition-related thresholds for 
inflation using the Consumer Price Index for all urban consumers, 
except for the Construction Wage Rate Requirements statute (Davis-Bacon 
Act), Service Contract Labor Standards statute, and trade agreements

[[Page 61503]]

thresholds. DoD also used the same methodology to adjust some 
nonstatutory DFARS acquisition-related thresholds.

DATES: Effective October 1, 2020.

FOR FURTHER INFORMATION CONTACT: Ms. Kimberly R. Ziegler, Telephone 
571-372-6095.

SUPPLEMENTARY INFORMATION:

I. Background

    This rule amends multiple DFARS parts to further implement 41 
U.S.C. 1908. Section 1908 requires an adjustment every five years (on 
October 1 of each year evenly divisible by five) of statutory 
acquisition-related thresholds for inflation, using the Consumer Price 
Index (CPI) for all urban consumers, except for the Construction Wage 
Rate Requirements statute (Davis-Bacon Act), Service Contract Labor 
Standards statute, and trade agreements thresholds (see FAR 1.109). As 
a matter of policy, DoD also uses the same methodology to adjust some 
nonstatutory DFARS acquisition-related thresholds.
    DoD published a proposed rule in the Federal Register at 85 FR 
19716 on April 8, 2020. The preamble to the proposed rule contained 
detailed explanation of--
     What an acquisition-related threshold is;
     What acquisition-related thresholds are not subject to 
escalation adjustment under this case; and
     How DoD analyzes statutory and non-statutory acquisition-
related thresholds.
    No respondents submitted public comments in response to the 
proposed rule.

II. Discussion and Analysis

    Although there were no public comments, two corrections were made 
to the final rule to: (1) Add the threshold at DFARS 215.403-1(c)(4)(B) 
and 225.7201; and (2) update the threshold pointer, an address, and web 
page citation at DFARS 252.225-7004.
    Although the actual CPI of 258.115 for March 2020 was lower than 
the projected CPI of 258.606 for March 2020 used for the proposed rule, 
the difference was insignificant and did not result in revisions to any 
proposed threshold increases. The final rule is based on the actual CPI 
of 258.115 for March 2020. The CPI as of the end of March 2020, 6 
months before the effective date of the rule, is used as the cutoff in 
order to allow time for approval and publication of the final rule.

III. Applicability to Contracts at or Below the Simplified Acquisition 
Threshold and for Commercial Items, Including Commercially Available 
Off-the-Shelf Items

    This rule does not create any new provisions or clauses, nor does 
it change the applicability of any existing provisions or clauses 
included in solicitations and contracts valued at or below the 
simplified acquisition threshold, or for commercial items, including 
COTS items.

IV. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). E.O. 
13563 emphasizes the importance of quantifying both costs and benefits, 
of reducing costs, of harmonizing rules, and of promoting flexibility. 
This is not a significant regulatory action and, therefore, was not 
subject to review under section 6(b) of E.O. 12866, Regulatory Planning 
and Review, dated September 30, 1993. This rule is not a major rule 
under 5 U.S.C. 804.

V. Executive Order 13771

    The rule is not subject to E.O. 13771, because this rule is not a 
significant regulatory action under E.O. 12866.

VI. Regulatory Flexibility Act.

    DoD has prepared a Final Regulatory Flexibility Analysis (FRFA) 
consistent with the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. 
The FRFA is summarized as follows:
    This rule amends the Defense Federal Acquisition Regulation 
Supplement to implement 41 U.S.C. 1908 and other acquisition-related 
dollar thresholds that are based on policy rather than statute in order 
to adjust for the changing value of the dollar. 41 U.S.C. 1908 requires 
adjustment every five years of statutory acquisition-related dollar 
thresholds, except for Construction Wage Rate Requirements statute 
(Davis-Bacon Act), Service Contract Labor Standards statute, and trade 
agreements thresholds. While reviewing all statutory acquisition-
related thresholds, this case presented an opportunity to also review 
all nonstatutory acquisition-related thresholds in the DFARS that are 
based on policy. The objective of the rule is to maintain the status 
quo, by adjusting acquisition-related thresholds for inflation.
    This rule will likely affect to some extent all small business 
concerns that submit offers or are awarded contracts by the Department 
of Defense (DoD). However, the threshold changes in this rule are not 
expected to have any significant economic impact on small business 
concerns because they are intended to maintain the status quo by 
adjusting for changes in the value of the dollar. Data generated from 
the Federal Procurement Data System (FPDS) for fiscal years 2017 
through 2019, indicates that the DoD has awarded an average of 
1,494,202 contracts to 56,851 unique small entities during the three 
year period. It is assumed that all 56,851 unique small entities may be 
affected by this rule, however, the impact will most likely be 
beneficial, by preventing burdensome requirements from applying to more 
and more acquisitions, as the dollar loses value.
    The rule does not impose any new reporting, recordkeeping, or 
compliance requirements. Changes in thresholds for approved information 
collection requirements are intended to maintain the status quo and 
prevent those requirements from increasing over time.
    There are no practical alternatives that will accomplish the 
objectives of the statute.

VII. Paperwork Reduction Act

    The Paperwork Reduction Act does apply. The changes to the DFARS do 
not impose new information collection requirements that require the 
approval of the Office of Management and Budget (OMB) under 44 U.S.C. 
3501, et seq. By adjusting the thresholds for inflation, the status quo 
for the current information collection requirements are maintained 
under OMB clearance numbers 0704-0229, DFARS Part 225, Foreign 
Acquisition and related clauses and 0704-0286, DFARS Part 205, 
Publicizing Contract Actions and Provision of Information to 
Cooperative Agreement Holders.

List of Subjects in 48 CFR Parts 203, 205, 207, 211, 212, 215, 217, 
219, 225, 228, 232, 234, 236, 237, 250, and 252

    Government Procurement.

Jennifer D. Johnson,
Regulatory Control Officer, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 203, 205, 211, 212, 215, 217, 219, 225, 
228, 236, 237, 246, 250, and 252 are amended as follows:

0
1. The authority citation for 48 CFR parts 203, 205, 211, 212, 215, 
217, 219,

[[Page 61504]]

225, 228, 236, 237, 246, 250, and 252 continues to read as follows:

    Authority:  41 U.S.C. 1303 and 48 CFR chapter 1.

PART 203--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF 
INTEREST


203.1004   [Amended]

0
2. Amend section 203.1004 in paragraph (b)(2)(ii) by removing ``$5.5 
million'' and adding ``$6 million'' in its place.

PART 205--PUBLICIZING CONTRACT ACTIONS


205.303   [Amended]

0
3. Amend section 205.303 by removing ``$7 million'' wherever it appears 
and adding ``$7.5 million'' in its place.


205.470   [Amended]

0
4. Amend section 205.470 by removing ``$1,000,000'' and adding ``$1.5 
million'' in its place.

PART 211--DESCRIBING AGENCY NEEDS


211.503   [Amended]

0
5. Amend section 211.503 in paragraph (b) by removing ``$700,000'' and 
adding ``$750,000'' in its place in two places.

PART 212--ACQUISITION OF COMMERCIAL ITEMS


212.271   [Amended]

0
6. Amend section 212.271 by removing ``$40,000'' and adding ``$45,000'' 
in its place.

PART 215--CONTRACTING BY NEGOTIATION


215.403-1   [Amended]

0
7. Amend section 215.403-1 in paragraph (c)(4)(B) by removing ``$19.5 
million'' and adding ``$20 million'' in its place.

PART 217--SPECIAL CONTRACTING METHODS


217.170   [Amended]

0
8. Amend section 217.170 in paragraphs (d)(1)(iv) and (d)(5) 
introductory text by removing ``$135.5 million'' and adding ``$150 
million'' in its place in both places.


217.171   [Amended]

0
9. Amend section 217.171 in paragraph (d) by removing ``$678.5 
million'' and adding ``$750 million'' in its place.


217.172   [Amended]

0
10. Amend section 217.172 in paragraphs (c), (d), and (f)(1) and (2) by 
removing ``$678.5 million'' and adding ``$750 million'' in its place 
wherever it appears.

PART 219--SMALL BUSINESS PROGRAMS


219.502-2  [Amended]

0
11. Amend section 219.502-2 in paragraph (1) by removing ``$2.5 
million'' and adding ``$3 million'' in its place.

PART 225--FOREIGN ACQUISITION

0
12. Revise section 225.7201 to read as follows:


225.7201   Policy.

    10 U.S.C. 2410g requires offerors and contractors to notify DoD of 
any intention to perform any part of a DoD contract outside the United 
States and Canada that--
    (a) Exceeds $750,000 in value; and
    (b) Could be performed inside the United States or Canada.


225.7204   [Amended]

0
12. Amend section 225.7204 in paragraphs (a) and (b) by removing 
``$13.5 million'' and adding ``$15 million'' in its place in both 
places.


225.7703-2   [Amended]

0
13. Amend section 225.7703-2--
0
a. In paragraph (b)(2)(i) by removing ``$93 million'' and adding ``$100 
million'' in its place; and
0
b. In paragraph (b)(2)(ii) introductory text by removing ``Director, 
Defense Procurement and Acquisition Policy'' and adding ``Principal 
Director, Defense Pricing and Contracting'' in its place and by 
removing ``$93 million'' and adding ``$100 million'' in its place.

PART 228--BONDS AND INSURANCE


228.102-1   [Amended]

0
14. Amend section 228.102-1 in the introductory text and paragraph (1) 
by removing ``$35,000'' and adding ``$40,000'' in its place in both 
places.

PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS


236.303-1   [Amended]

0
15. Amend section 236.303-1 in paragraph (a)(4)(i) introductory text 
and (a)(4)(ii) by removing ``$4 million'' and adding ``$4.5 million'' 
in its place in both places.

PART 237--SERVICE CONTRACTING


237.170-2   [Amended]

0
16. Amend section 237.170-2 in paragraphs (a)(1) and (2) by removing 
``$93 million'' and adding ``$100 million'' in its place in both 
places.

PART 246--QUALITY ASSURANCE

0
17. Amend section 246.402 introductory text by removing ``$300,000'' 
and adding ``$350,000'' in its place.

PART 250--EXTRAORDINARY CONTRACTUAL ACTIONS AND THE SAFETY ACT


250.102-1   [Amended]

0
18. Amend section 250.102-1 in paragraph (b) by removing ``$70,000'' 
and adding ``$75,000'' in its place.


250.102-1-70   [Amended]

0
19. Amend section 250.102-1-70 in paragraph (b)(1) by removing 
``$70,000'' and adding ``$75,000'' in its place.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES


252.225-7003   [Amended]

0
20. Amend section 252.225-7003 by--
0
a. Removing the clause date ``(OCT 2015)'' and adding ``(OCT 2020)'' in 
its place; and
0
b. In paragraph (b)(1), removing ``$13.5 million'' and adding ``$15 
million'' in its place; and
0
c. In paragraph (b)(2)(i) removing ``$700,000'' and adding ``$750,000'' 
in its place.


252.225-7004   [Amended]

0
21. Amend section 252.225-7004 by--
0
a. Removing the clause date ``(MAY 2019)'' and adding ``(OCT 2020)'' in 
its place;
0
b. In paragraph (b)(1), removing ``225.870-4(c)(2)(i)(A)(1)'' and 
adding 225.7201(a)'' in its place;
0
c. In paragraph (c)(5) removing ``Deputy Director of Defense 
Procurement and Acquisition Policy (Contract Policy and International 
Contracting), OUSD(AT&L) DPAP/CPIC'' and adding ``Principal Director, 
Defense Pricing and Contracting (Contract Policy), OUSD(A&S) DPC/CP'' 
in its place; and
0
d. In paragraph (d)(2), removing ``http://www.dtic.mil/whs/directives/infomgt/forms/formsprogram.htm'' and adding ``https://www.esd.whs.mil/Directives/forms/'' in its place.

[FR Doc. 2020-21122 Filed 9-28-20; 8:45 am]
BILLING CODE 5001-06-P