25146 Federal Register / Vol. 87, No. 82 / Thursday, April 28, 2022 / Rules and Regulations 

DEPARTMENT OF DEFENSE 

48 CFR Parts 225 and 252 

[Docket DARS–2021–0018] 

RIN 0750–AL29 

Defense Federal Acquisition 

Regulation Supplement: Modification 

of Small Purchase Threshold 

Exceptions (DFARS Case 2021–D010) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule 

SUMMARY: DoD is issuing a final rule 

amending the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement a section of the 

National Defense Authorization Act for 

Fiscal Year 2021. 

DATES: Effective April 28, 2022. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Kimberly R. Ziegler, Telephone 571– 

372–6095. 

SUPPLEMENTARY INFORMATION: 

I. Background 

DoD published a proposed rule in the 

Federal Register at 86 FR 53931 on 

September 29, 2021, to implement 

section 817 of the National Defense 

Authorization Act (NDAA) of Fiscal 

Year (FY) 2021 (Pub. L. 116–283). 

Section 817 amends 10 U.S.C. 2533a 

(commonly known as the ‘‘Berry 

Amendment’’), by reducing the dollar 

threshold at which an acquisition is 

excepted from the source restrictions of 

the Berry Amendment from the 

simplified acquisition threshold (SAT) 

to an amount not to exceed $150,000. 

DFARS 225.7002 identifies the 

domestic source restrictions of 10 U.S.C. 

2533a on food, clothing, fabrics, fibers, 

hand or measuring tools, and flags, 

unless an exception applies. DFARS 

225.7002–2, Exceptions, has historically 

referred to ‘‘actions at or below the 

small purchase threshold,’’ rather than a 

specific dollar value, as an exception to 

the domestic source restrictions of the 

Berry Amendment. As a result, each 

time the SAT increased, the exception 

threshold also increased to align with 

the new SAT, to include the most recent 

SAT increase to $250,000. Federal 

Acquisition Regulation (FAR) Case 

2018–004, published July 2, 2020 (85 FR 

40064) raised the SAT at FAR 2.101 

from $150,000 to $250,000. 

Three respondents submitted public 

comments in response to the proposed 

rule. 

II. Discussion and Analysis 

DoD reviewed the public comments in 

the development of the final rule. One 

respondent provided a comment that 

did not support the rule for reasons that 

were outside of the scope of this rule. 

A discussion of the comments is 

provided, as follows: 

A. Summary of Significant Changes 

From the Proposed Rule 

There are no changes from the 

proposed rule as a result of public 

comments. 

B. Analysis of Public Comments 

1. Support for the Rule 

Comment: Some respondents 

supported the rule. 

Response: DoD acknowledges the 

support. 

2. Splitting Requirements 

Comment: Respondents are concerned 

that without expressly stating that 

contracts cannot be broken into smaller 

contract actions, contracting officers 

will split requirements to avoid 

applying the restrictions set forth in 10 

U.S.C. 2533a. 

Response: Basic contracting officer 

training already provides direction to 

the contracting workforce about 

splitting contract actions to avoid 

application of regulatory requirements. 

Additional direction is unnecessary to 

ensure compliance with this rule. 

C. Other Changes 

Minor changes are made in paragraph 

(m) of DFARS 225.7002–2 to remove 

text that is not necessary. In paragraph 

(c) of DFARS clause 252.225–7012, 

Preference for Certain Domestic 

Commodities, minor changes are made 

to delete an acronym that is no longer 

needed and to clarify that the reference 

to ‘‘225.7002–2(a)’’ is a reference to 

DFARS 225.7002–2(a). 

III. Applicability to Contracts at or 

Below the Simplified Acquisition 

Threshold (SAT), for Commercial 

Products Including Commercially 

Available Off-the-Shelf (COTS) Items, 

and for Commercial Services 

This rule amends the applicability of 

the following DFARS clauses: (1) 

252.225–7006, Acquisition of the 

American Flag; (2) 252.225–7012, 

Preference for Certain Domestic 

Commodities; and (3) 252.225–7015, 

Restriction on Acquisition of Hand or 

Measuring Tools. DoD does intend to 

apply the rule to contracts valued above 

$150,000 but at or below the SAT. The 

clauses impacted by the rule are already 

prescribed for use in solicitations and 

contracts using FAR part 12 procedures 

for the acquisition of commercial 

products including COTS items. 

A. Applicability to Contracts at or Below 

the Simplified Acquisition Threshold 

41 U.S.C. 1905 governs the 

applicability of laws to contracts or 

subcontracts in amounts not greater 

than the simplified acquisition 

threshold. It is intended to limit the 

applicability of laws to such contracts or 

subcontracts. 41 U.S.C. 1905 provides 

that if a provision of law contains 

criminal or civil penalties, or if the 

Federal Acquisition Regulatory Council 

makes a written determination that it is 

not in the best interest of the Federal 

Government to exempt contracts or 

subcontracts at or below the SAT, the 

law will apply to them. The Principal 

Director, Defense Pricing and 

Contracting (DPC), is the appropriate 

authority to make comparable 

determinations for regulations to be 

published in the DFARS, which is part 

of the FAR system of regulations. DoD 

does intend to make that determination. 

Therefore, this rule will apply above 

$150,000 but at or below the simplified 

acquisition threshold. 

B. Determination 

DoD plans to apply the rule to 

contracts valued above $150,000 but at 

or below the SAT for the following 

DFARS clauses: (1) 252.225–7006, 

Acquisition of the American Flag; (2) 

252.225–7012, Preference for Certain 

Domestic Commodities; (3) 252.225– 

7015, Restriction on Acquisition of 

Hand or Measuring Tools. 

Not applying these clauses to 

contracts valued above $150,000 but at 

or below the SAT would exclude 

contracts intended to be covered by this 

rule and undermine the overarching 

purpose of the rule, which is to increase 

the number of acquisitions subject to the 

domestic source restrictions at DFARS 

225.7002 by reducing the volume of 

procurements subject to the exception at 

DFARS 225.7002–2(a). The clauses 

already apply to commercial products 

including COTS items. 

IV. Expected Impact of the Rule 

DFARS 225.7002 identifies the 

domestic source restrictions of 10 U.S.C. 

2533a on food, clothing, fabrics, fibers, 

hand or measuring tools, and flags, 

unless an exception at DFARS 

225.7002–2 applies. Acquisitions valued 

below the SAT, currently defined at 

FAR 2.201 as $250,000, are excepted 

from the domestic source restrictions of 

the Berry Amendment. 

This rule implements section 817 of 

the NDAA for FY 2021 by reducing the 

exception threshold from the SAT to 

$150,000. DoD expects the reduction 

required by section 817 to result in an 


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Federal Register / Vol. 87, No. 82 / Thursday, April 28, 2022 / Rules and Regulations 25147 

increase in the number of procurements 

of domestically sourced end products 

that are subject to 10 U.S.C. 2533a. 

DoD estimates that approximately 970 

procurements valued between $150,000 

and the SAT of $250,000 are awarded to 

an estimated 400 entities annually, 

based upon data obtained from the 

Federal Procurement Data System 

(FPDS) for fiscal years 2018 through 

2020. Until the final rule for FAR case 

2018–004 (85 FR 40064), which 

increased the SAT from $150,000 to 

$250,000, became effective on August 

31, 2020, these entities were required to 

comply with domestic source 

restrictions of the Berry Amendment, 

including the $150,000 exception 

threshold. It has only been since August 

31, 2020, that these entities have had 

the benefit of the higher exception 

threshold (i.e., the SAT of $250,000). 

DoD assumes that some of these entities 

may have adjusted their procurement 

sources in the short time since the 

threshold was raised, while some may 

have continued with their established 

supply chains. There is currently no 

data source that would identify the 

entities that made adjustments and 

would have to return to their previous 

practices. 

V. 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. 

VI. Congressional Review Act 

As required by the Congressional 

Review Act (5 U.S.C. 801–808) before an 

interim or final rule takes effect, DoD 

will submit a copy of the interim or 

final rule with the form, Submission of 

Federal Rules Under the Congressional 

Review Act, to the U.S. Senate, the U.S. 

House of Representatives, and to the 

Comptroller General of the United 

States. A major rule under the 

Congressional Review Act cannot take 

effect until 60 days after it is published 

in the Federal Register. The Office of 

Information and Regulatory Affairs has 

determined that this rule is not a major 

rule as defined by 5 U.S.C. 804. 

VII. Regulatory Flexibility Act 

A final regulatory flexibility analysis 

has been prepared consistent with the 

Regulatory Flexibility Act, 5 U.S.C. 601, 

et seq. The FRFA is summarized as 

follows: 

This rule amends the DFARS to 

implement section 817 of the National 

Defense Authorization Act (NDAA) for 

Fiscal Year (FY) 2021 (Pub. L. 116–283). 

Section 817 reduces the dollar threshold 

exception at DFARS 225.7002, which 

implements 10 U.S.C. 2533a (commonly 

known as the ‘‘Berry Amendment’’), 

from the simplified acquisition 

threshold (SAT) to an amount not to 

exceed $150,000. 

The objective of the rule is to increase 

the number of procurements subject to 

the domestic source requirements at 

DFARS 225.7002 by reducing the 

number of procurements subject to the 

exception at DFARS 225.7002–2(a). 

There were no significant issues 

raised by the public in response to the 

initial regulatory flexibility analysis. 

This rule is expected to affect small 

entities that participate in procurements 

subject to the domestic source 

restrictions at DFARS 225.7002. 

However, DoD does not expect a 

significant change in the number of 

actions awarded to small entities 

resulting from the reduction in the 

threshold from the current SAT of 

$250,000 to $150,000. To assess the 

impact of this reduction, data was 

obtained from the Federal Procurement 

Data System (FPDS). According to FPDS 

for fiscal years 2018 through 2020, DoD 

awarded an average of approximately 

970 applicable actions valued above 

$150,000 but below the SAT. Of those 

actions, an average of 200 contract 

actions was awarded to approximately 

72 unique small entities. 

The rule does not impose any new 

reporting, recordkeeping, or compliance 

requirements. 

There are no practical alternatives 

that will accomplish the objectives of 

the statute. 

VIII. Paperwork Reduction Act 

This rule does not contain any 

information collection requirements that 

require the approval of the Office of 

Management and Budget (OMB) under 

the Paperwork Reduction Act (44 U.S.C. 

chapter 35). 

List of Subjects in 48 CFR Parts 225 and 

252 

Government procurement. 

Jennifer D. Johnson, 

Editor/Publisher, Defense Acquisition 

Regulations System. 

Therefore, 48 CFR parts 225 and 252 

are amended as follows: 

■ 1. The authority citation for 48 CFR 

parts 225 and 252 continues to read as 

follows: 

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

Chapter 1. 

PART 225—FOREIGN ACQUISITION 

225.7002–2 [Amended] 

■ 2. Amend section 225.7002–2: 

■ a. In paragraph (a), by removing ‘‘at or 

below the simplified acquisition 

threshold’’ and adding ‘‘not exceeding 

$150,000’’ in its place; 

■ b. In paragraph (j)(2), by removing 

‘‘simplified acquisition threshold’’ and 

adding ‘‘threshold at 225.7002–2(a)’’ in 

its place; 

■ c. In paragraphs (m)(1)(ii) and (iv), by 

removing ‘‘Product or Service Group 

(PSG)’’ and adding ‘‘PSG’’ in its place. 

225.7002–3 [Amended] 

■ 3. Amend section 225.7002–3, in 

paragraphs (b) and (c), by removing 

‘‘simplified acquisition threshold’’ and 

adding ‘‘threshold at 225.7002–2(a)’’ in 

its place. 

PART 252—SOLICITATION 

PROVISIONS AND CONTRACT 

CLAUSES 

252.225–7012 [Amended] 

■ 4. Amend section 252.225–7012 by— 

■ a. Removing the clause date ‘‘(MAR 

2022)’’ and adding ‘‘(APR 2022)’’ in its 

place; 

■ b. In paragraph (a), in the definition of 

‘‘Structural component of a tent’’, 

redesignating paragraphs (i) and (ii) as 

paragraphs (1) and (2), respectively, and 

at the end of the newly redesignated 

paragraph (1) removing the semicolon 

and adding ‘‘; and’’ in its place; 

■ c. In paragraph (c)(1), removing 

‘‘(FAR)’’; and 

■ d. In paragraph (c)(2)(ii), removing 

‘‘simplified acquisition threshold in 

FAR part 2’’ and adding ‘‘threshold at 

Defense Federal Acquisition Regulation 

Supplement 225.7002–2(a)’’ in its place. 

[FR Doc. 2022–08813 Filed 4–27–22; 8:45 am] 

BILLING CODE 5001–06–P 


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