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[Federal Register: January 20, 2010 (Volume 75, Number 12)]
[Proposed Rules]               
[Page 3187-3190]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20ja10-23]                         

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DEPARTMENT OF DEFENSE

Defense Acquisition Regulations System

48 CFR Parts 205, 207, 208, 209, 211, 215, 216, 217, 219, 225, 228, 
232, 237, 246, 250, 252

 
Defense Federal Acquisition Regulation Supplement: Inflation 
Adjustment of Acquisition-Related Thresholds (DFARS Case 2009-D003)

AGENCY: Defense Acquisition Regulations System. Department of Defense 
(DoD).

ACTION: Proposed rule with request for comments.

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SUMMARY: DoD is proposing to amend the Defense Federal Acquisition 
Regulation Supplement (DFARS) to implement Section 807 of the Ronald W. 
Reagan National Defense Authorization Act for Fiscal Year 2005. Section 
807 provides for adjustment every 5 years of statutory acquisition-
related thresholds, except for Davis-Bacon Act, Service Contract Act, 
and trade agreements thresholds. This case also reviews nonstatutory 
acquisition-related thresholds for adjustment in 2010.

DATES: Comments on the proposed rule should be submitted in writing to 
the address shown below on or before March 22, 2010, to be considered 
in the formation of the final rule.

ADDRESSES: You may submit comments, identified by DFARS Case 2009-D003, 
using any of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    E-mail: dfars@osd.mil. Include DFARS Case 2009-D003 in the subject 
line of the message.
    Fax: 703-602-0350.
    Mail: Defense Acquisition Regulations System, Attn: Ms. Amy 
Williams, OUSD(AT&L)DPAP(DARS), 3060 Defense Pentagon, Room 3B855, 
Washington, DC 20301-3060.
    Hand Delivery/Courier: Defense Acquisition Regulations System, 
Crystal Square 4, Suite 200A, 241 18th Street, Arlington, VA 22202-
3402.
    Comments received generally will be posted without change to http://www.regulations.gov, including any personal information provided.

FOR FURTHER INFORMATION CONTACT: Ms. Amy Williams, (703) 602-0328.

SUPPLEMENTARY INFORMATION:

A. Background

    This rule proposes to amend multiple DFARS parts to implement 
Section 807 of the Ronald W. Reagan National Defense Authorization Act 
for Fiscal Year 2005 (Pub. L. 108-375). Section 807 provides for 
adjustment every 5 years (in years evenly divisible by 5) of statutory 
acquisition-related thresholds, except for Davis-Bacon Act, Service 
Contract Act, and trade agreements thresholds. This case also reviews 
nonstatutory DFARS acquisition-related thresholds for adjustment in 
2010. FAR case 2008-024 proposes comparable changes to acquisition-
related thresholds in the FAR.
    This is the second review of DFARS acquisition-related thresholds. 
The last review was conducted under DFARS case 2004-D022. The final 
rule was published in the Federal Register on December 19, 2006 (71 FR 
75891).

B. Analysis

1. What is an acquisition-related threshold?

    This case builds on the review of DFARS thresholds in 2005 and uses 
the same interpretation of the statutory definition of acquisition-
related threshold. The statute defines an

[[Page 3188]]

acquisition-related dollar threshold as 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 determined by the FAR Council.
    There are other thresholds in the DFARS that, while not meeting 
this statutory definition of ``acquisition-related,'' nevertheless meet 
all the other criteria. These thresholds may have their origin in 
Executive order or regulation.
    Therefore, as used in this case, an acquisition-related threshold 
is 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 viewed as ``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.

2. What acquisition-related thresholds are not subject to escalation 
adjustment under this case?

    The statute does not permit escalation of acquisition-related 
thresholds established by the Davis Bacon Act, the Service Contract 
Act, or trade agreements.
    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.

3. How did DoD analyze a statutory acquisition-related threshold?

    If an acquisition-related threshold is based on statute, the matrix 
at {to be provided in final rule{time}  identifies the statute, and the 
statutory threshold, both the original threshold and any revision to it 
in 2006.
    With the exception of thresholds set by the Davis-Bacon Act, 
Service Contract Act, and trade agreements, the statute requires that 
the FAR Council adjust 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. 
For purposes of this proposed rule, the matrix includes calculation of 
escalation based on the CPI from October 2000 to April 2010. Inflation 
from the average CPI value for 2007 to the average value for 2008 was 
3.8 percent. DoD has currently estimated the inflation for the next 
year at 4.2 percent, but will subsequently adjust as necessary before 
issuance of the final rule. Acquisition-related thresholds in statutes 
that took effect after October 1, 2000, are escalated from the date 
that they took effect. Once the escalation factor is applied to the 
acquisition-related threshold, then the threshold must be rounded as 
follows:

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