```

[Federal Register Volume 79, Number 215 (Thursday, November 6, 2014)]
[Proposed Rules]
[Pages 65912-65917]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-26266]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 202, 203, 205, 207, 211, 212, 215, 217, 218, 219, 225, 
228, 234, 236, 237, 250, and 252

RIN 0750-AI43

Defense Federal Acquisition Regulation Supplement: Inflation 
Adjustment of Acquisition-Related Thresholds (DFARS Case 2014-D025)

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

ACTION: Proposed rule.

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

SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to further implement the U.S.C. statute 
on inflation adjustment of acquisition-related dollar thresholds. This 
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 thresholds. DoD is also proposing to use the same 
methodology to adjust some nonstatutory DFARS acquisition-related 
thresholds in 2015.

DATES: Comment Date: Comments on the proposed rule should be submitted 
in writing to the address shown below on or before January 5, 2015, to 
be considered in the formation of the final rule.

ADDRESSES: Submit comments identified by DFARS Case 2014-D025, using 
any of the following methods:
    [cir] Regulations.gov: http://www.regulations.gov. Submit comments 
via the Federal eRulemaking portal by entering ``DFARS Case 2014-D025'' 
under the heading ``Enter keyword or ID'' and selecting ``Search.'' 
Select the link ``Submit a Comment'' that corresponds with ``DFARS Case 
2014-D025.'' Follow the instructions provided at the ``Submit a 
Comment'' screen. Please include your name, company name (if any), and 
``DFARS Case 2014-D025'' on your attached document.
    [cir] Email: osd.dfars@mail.mil. Include DFARS Case 2014-D025 in 
the subject line of the message.
    [cir] Fax: 571-372-6094.
    [cir] Mail: Defense Acquisition Regulations System, Attn: Ms. Amy 
G. Williams, OUSD (AT&L) DPAP/DARS, Room 3B941, 3060 Defense Pentagon, 
Washington, DC 20301-3060.

[[Page 65913]]

    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided. To 
confirm receipt of your comment(s), please check www.regulations.gov, 
approximately two to three days after submission to verify posting 
(except allow 30 days for posting of comments submitted by mail).

FOR FURTHER INFORMATION CONTACT: Ms. Amy G. Williams, Defense 
Acquisition Regulations System, OUSD (AT&L) DPAP/DARS, Room 3B941, 3060 
Defense Pentagon, Washington, DC 20301-3060. Telephone 571-372-6106.

SUPPLEMENTARY INFORMATION:

I. Background

    This rule proposes to amend 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 is also proposing to use the 
same methodology to adjust some nonstatutory DFARS acquisition-related 
thresholds. All proposed threshold adjustments would become effective 
on October 1, 2015.
    FAR case 2014-022 proposes comparable changes to acquisition-
related thresholds in the FAR.
    This is the third review of DFARS acquisition-related thresholds 
since the statute was enacted on October 28, 2004 (section 807 of the 
National Defense Authorization Act for Fiscal Year (FY) 2004). The last 
review was conducted under DFARS case 2009-D003. The final rule was 
published under that case in the Federal Register on August 2, 2010 (75 
FR 45072), effective October 1, 2010.

II. Analysis

A. What is an acquisition-related threshold?

    This case builds on the review of DFARS thresholds in 2005 and 
2010, using the same interpretation of an acquisition-related 
threshold. 41 U.S.C. 1908 is applicable to ``a dollar threshold that is 
specified in law as a factor in defining the scope of the applicability 
of a policy, procedure, requirement, or restriction provided in that 
law to the procurement of property or services by an Executive agency, 
as the [FAR] Council determines.''
    There are other thresholds in the DFARS that, while not specified 
in law, nevertheless meet all the other criteria. These thresholds may 
have their origin in Executive order or regulation.
    Therefore, as used in this case, ``acquisition-related threshold'' 
has a broader meaning, i.e., a threshold that is specified in law, 
Executive order, or regulation as a factor in defining the scope of the 
applicability of a policy, procedure, requirement, or restriction 
provided in that law, Executive order, or regulation to the procurement 
of property or services by an Executive agency, as determined by the 
FAR Council. Acquisition-related thresholds are generally tied to the 
value of a contract, subcontract, or modification.
    Examples of thresholds that are not ``acquisition-related,'' as 
defined in this case, are thresholds relating to claims, penalties, 
withholding, payments, required levels of insurance, small business 
size standards, liquidated damages, etc. This report does not address 
thresholds that are not acquisition-related.

B. What acquisition-related thresholds are not subject to escalation 
adjustment under this case?

    41 U.S.C. 1908 does not permit escalation of acquisition-related 
thresholds established by the Construction Wage Rate Requirements 
statute (Davis Bacon Act), the Service Contract Labor Standards 
statute, or the United States Trade Representative pursuant to the 
authority of the Trade Agreements Act of 1979.
    Also, the statute does not authorize DoD to escalate thresholds 
originating in Executive order or the implementing agency (such as the 
Department of Labor or the Small Business Administration), unless the 
Executive order or agency regulations are first amended.

C. How does DoD analyze escalation of a statutory acquisition-related 
threshold?

    If an acquisition-related threshold is based on statute, the matrix 
at http://www.acq.osd.mil/dpap/dars/pgi/docs/2014-D025_(p)_TAB_E_matrix_Sep_12_14.xls identifies the statute, and the 
statutory threshold, including the original threshold and any 
subsequent revisions to it.
    With the exception of thresholds set by the Construction Wage Rate 
Requirements statute (Davis Bacon Act), the Service Contract Labor 
Standards statute, and trade agreements, 41 U.S.C. 1908 requires 
adjustment of the acquisition-related thresholds for inflation using 
the Consumer Price Index (CPI) for all-urban consumers. Acquisition-
related thresholds in statutes that were in effect on October 1, 2000, 
are only subject to escalation from that date forward. Acquisition-
related thresholds in statutes that took effect after October 1, 2000, 
are escalated from the date that they took effect. For purposes of this 
proposed rule, the matrix includes calculation of escalation based on 
the estimated CPI value for March 2015 (currently estimated at 243.0) 
divided by the CPI for the date of enactment of the statute or 
regulation (October 2000, for statutes enacted prior to October 1, 
2000). DoD will subsequently adjust as necessary before issuance of the 
final rule.
    Once the escalation factor is applied to the acquisition-related 
threshold, then statutory thresholds must be rounded as follows:

Jasmeet_K._Seehra@omb.eop.gov, with a copy to the 
Defense Acquisition Regulations System, Attn: Ms. Amy G. Williams, 
OUSD(AT&L)DPAP/DARS, Room 3B941, 3060 Defense Pentagon, Washington, DC 
20301-3060. Comments can be received from 30 to 60 days after the date 
of this notice, but comments to OMB will be most useful if received by 
OMB within 30 days after the date of this notice.
    Public comments are particularly invited on: Whether this 
collection of information is necessary for the proper performance of 
functions of the DFARS, and will have practical utility; whether our 
estimate of the public burden of this collection of information is 
accurate, and based on valid assumptions and methodology; ways to 
enhance the quality, utility, and clarity of the information to be 
collected; and ways in which we can minimize the burden of the 
collection of information on those who are to respond, through the use 
of appropriate technological collection techniques or other forms of 
information technology.
    To request more information on this proposed information collection 
or to obtain a copy of the proposal and associated collection 
instruments, please write to the Defense Acquisition Regulations 
System, Attn: Ms. Amy G. Williams, OUSD(AT&L)DPAP/DARS, Room 3B941, 
3060 Defense Pentagon, Washington, DC 20301-3060, or email 
osd.dfars@mail.mil. Include DFARS Case 2014-D025 in the subject line of 
the message.

List of Subjects in 48 CFR Parts 202, 203, 205, 207, 211, 212, 215, 
217, 218, 219, 225, 228, 234, 236, 237, 250, and 252

    Government Procurement.

Manuel Quinones,
Editor, Defense Acquisition Regulations System.

    Therefore, 48 CFR parts 202, 203, 205, 207, 211, 212, 215, 217, 
218, 219, 225, 228, 234, 236, 237, 250, and 252 are proposed to be 
amended as follows:

0
1. The authority citation for 48 CFR parts 202, 203, 205, 212, 215, 
217, 225, 234, 237, and 252 continues to read as follows:

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

PART 202--DEFINITIONS OF WORDS AND TERMS

202.101  [Amended]

0
2. Amend section 202.101 by--
0
a. Designating the definition of ``Simplified acquisition threshold'' 
in alphabetical order in the list of definitions; and
0
b. In the definition of ``Simplified acquisition threshold'', removing 
``$300,000'' and adding $400,000'' in its place.

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

203.1004  [Amended]

0
3. Amend section 203.1004 in paragraph (b)(2)(ii) by removing ``$5 
million'' and adding ``$5.5 million'' in its place.

PART 205--PUBLICIZING CONTRACT ACTIONS

205.303  [Amended]

0
4. Amend section 205.303 by removing ``$6.5 million'' and adding ``$7 
million'' in its place for the following--
0
a. In paragraph (a)(i) introductory text, in two places;
0
b. In paragraph (a)(i)(A); and
0
c. In paragraph (a)(i)(B), in two places.

205.470  [Amended]

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

PART 207--ACQUISITION PLANNING

0
6. The authority citation for part 207 is revised to read as follows:

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

207.170-3  [Amended]

0
7. Amend section 207.170-3 in paragraph (a) introductory text by 
removing ``$6 million'' and adding ``$6.5 million'' in its place.

PART 211--DESCRIBING AGENCY NEEDS

0
8. The authority citation for part 211 is revised to read as follows:

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

211.503  [Amended]

0
9. Amend section 211.503 in paragraph (b) by removing ``$650,000'' and 
adding ``$700,000'' in its place in two places.

PART 212--ACQUISITION OF COMMERCIAL ITEMS

212.7102-1  [Amended]

0
10. Amend section 212.7102-1 in paragraph (c) by removing ``$50 
million'' and adding ``$55 million'' in its place.

PART 215--CONTRACTING BY NEGOTIATION

215.403-1  [Amended]

0
11. Amend section 215.403-1 in paragraphs (c)(3)(B) and (c)(4)(B) by 
removing ``$15,000,000'' and adding ``$20 million'' in its place.

PART 217--SPECIAL CONTRACTING METHODS

0
12. Amend section 217.170 by--
0
a. Revising paragraph (e)(1)(iv); and
0
b. In paragraph (e)(5) by removing ``$100 million'' and adding ``$139.5 
million'' in its place.
    The revision reads as follows:

217.170  General.

* * * * *
    (e) * * *
    (1) * * *
    (iv) Include a cancellation ceiling in excess of $139.5 million 
(see 10 U.S.C. 2306c(d)(4) and 10 U.S.C. 2306b(g)).
* * * * *

217.171  [Amended]

0
13. Amend section 217.171 in paragraph (d) by removing ``$625.5 
million'' and adding ``$698.5 million'' in its place.

217.172  [Amended]

0
14. Amend section 217.172 in paragraphs (c), (e)(1), and (e)(2) by 
removing ``$500 million'' and adding ``$698.5 million'' in its place.

[[Page 65916]]

PART 218--EMERGENCY ACQUISITIONS

0
15. The authority citation for part 218 is revised to read as follows:

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

218.270  [Amended]

0
16. Amend section 218.270 by removing ``$300,000'' and adding 
``$400,000'' in its place.

PART 219--SMALL BUSINESS PROGRAMS

0
17. The authority citation for part 219 is revised to read as follows:

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

219.502-1  [Amended]

0
18. Amend section 219.502-1 in paragraph (2) by removing ``$350,000'' 
and adding ``$400,000'' in its place in both places.

219.502-2  [Amended]

0
19. Amend section 219.502-2 by--
0
a. In paragraph (a)(i), removing ``$2.5 million'' and adding ``$3 
million'' in its place; and
0
b. In paragraph (a)(iii), removing ``$350,000'' and adding ``$400,000'' 
in its place.

PART 225--FOREIGN ACQUISITION

225.7204  [Amended]

0
20. Amend section 225.7204 by--
0
a. In paragraphs (a) and (b), removing ``$12.5 million'' and adding 
``$14 million'' it its place in both places; and
0
b. In paragraph (c), removing ``$650,000'' and adding ``$700,000'' in 
its place.

225.7703-2  [Amended]

0
21. Amend section 225.7703-2 in paragraph (b)(2)(ii) by removing 
``$85.5 million'' and adding ``$95.5 million'' in its place.

PART 228--BONDS AND INSURANCE

0
22. The authority citation for part 228 is revised to read as follows:

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

228.102-1  [Amended]

0
23. Amend section 228.102-1 by--
0
a. In the introductory text and paragraph (1), removing ``$30,000'' and 
adding ``$35,000'' in its place in both places; and
0
b. In paragraph (2) introductory text, removing ``$100,000'' and adding 
``$150,000'' in its place.

PART 234--MAJOR SYSTEM ACQUISITION

0
24. Revise section 234.7001 to read as follows:

234.7001  Definition.

    Major weapon system, as used in this subpart, means a weapon system 
acquired pursuant to a major defense acquisition program.

PART 236--CONSTRUCTION AND ARCHITECT-ENGINEER CONTRACTS

0
25. The authority citation for part 236 is revised to read as follows:

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

236.601  [Amended]

0
26. Amend section 236.601 in paragraph (1) by removing ``$1,000,000'' 
and adding ``$1.5 million'' in its place.

PART 237--SERVICE CONTRACTING

237.170-2  [Amended]

0
27. Amend section 237.170-2 in paragraphs (a)(1) and (2) by removing 
``$85.5 million'' and adding ``$95.5 million'' in its place in both 
places.

PART 250--EXTRAORDINARY CONTRACTUAL ACTIONS AND THE SAFETY ACT

0
28. The authority citation for part 250 is revised to read as follows:

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

250.102-1  [Amended]

0
29. Amend section 250.102-1 in paragraph (b) by removing ``$65,000'' 
and adding ``$70,000'' in its place.

250.102-1-70  [Amended]

0
30. Amend section 250.102-1-70 in paragraph (b)(1) by removing 
``$65,000'' and adding ``$70,000'' in its place.

PART 252--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

252.203-7004  [Amended]

0
31. Amend section 252.203-7004 by--
0
a. Removing the clause date ``DEC 2012'' and adding ``DATE'' in its 
place; and
0
b. In paragraph (c) introductory text, removing ``$5 million'' and 
adding ``$5.5 million'' in its place.

252.209-7004  [Amended]

0
32. Amend section 252.209-7004 by--
0
a. Removing the clause date ``MAR 2014'' and adding ``DATE'' in its 
place; and
0
b. In paragraph (a), removing ``$30,000'' and adding ``$35,000'' in its 
place.

252.209-7009  [Amended]

0
33. Amend section 252.209-7009 by--
0
a. Removing the clause date ``DEC 2012'' and adding ``DATE'' in its 
place; and
0
b. In paragraph (a)(ii), removing ``$50 million'' and adding ``$55 
million'' in its place.

252.225-7003  [Amended]

0
34. Amend section 252.225-7003 by--
0
a. Removing the clause date ``OCT 2010'' and adding ``DATE'' in its 
place;
0
b. In paragraph (b)(1), removing ``$12.5 million'' and adding ``$14 
million'' in its place; and
0
c. In paragraph (b)(2)(i), removing ``$650,000'' and adding 
``$700,000'' in its place.

252.225-7004  [Amended]

0
35. Amend section 252.225-7004 by--
0
a. Removing the clause date ``OCT 2010'' and adding ``DATE'' in its 
place; and
0
b. In paragraph (b)(1), removing ``$650,000'' and adding ``$700,000'' 
in its place.

252.225-7006  [Amended]

0
36. Amend section 252.225-7006 by--
0
a. Removing the clause date ``OCT 2010'' and adding ``DATE'' in its 
place; and
0
b. In paragraph (f)(1), removing ``$650,000'' and adding ``$700,000'' 
in its place.

252.225-7017  [Amended]

0
37. Amend section 252.225-7017 by--
0
a. Removing the clause date ``JAN 2014'' and adding ``DATE'' in its 
place; and
0
b. In paragraph (c)(1), removing ``$3,000'' and adding ``$3,500'' in 
its place.

252.225-7018  [Amended]

0
38. Amend section 252.225-7018 by--
0
a. Removing the clause date ``JAN 2014'' and adding ``DATE'' in its 
place;
0
b. In paragraph (b)(1), removing ``$3,000'' and adding ``$3,500'' in 
its place; and
0
c. In paragraphs (d)(1) and (2), removing ``$3,000'' and adding 
``$3,500'' in both places.

252.249-7002  [Amended]

0
39. Amend section 252.249-7002 by--
0
a. Removing the clause date ``OCT 2010'' and adding ``DATE'' in its 
place; and

[[Page 65917]]

0
b. In paragraph (d)(1), removing ``$650,000'' and adding ``$700,000'' 
in its place.

[FR Doc. 2014-26266 Filed 11-5-14; 8:45 am]
BILLING CODE 5001-06-P
```