Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules 73415 

2733, telephone (214) 665–7247; fax 

number 214–665–7263; e-mail address 

patterson.alima@epa.gov. 

SUPPLEMENTARY INFORMATION: In the 

final section of this Federal Register, 

EPA is approving the State’s SIP 

submittal as a direct rule without prior 

proposal because the Agency views this 

as a noncontroversial submittal and 

anticipates no adverse comments. A 

detailed rationale for the approval is set 

forth in the direct final rule. If no 

adverse comments are received in 

response to this action no further 

activity is contemplated. If EPA receives 

adverse comments, the direct final rule 

will be withdrawn and all public 

comments received will be addressed in 

a subsequent final rule based on this 

proposed rule. EPA will not institute a 

second comment period. Any parties 

interested in commenting on this action 

should do so at this time. 

For additional information, see the 

direct final rule which is located in the 

rules section of this Federal Register. 

Dated: November 18, 2005. 

Richard E. Greene, 

Regional Administrator, Region 6. 

[FR Doc. 05–23914 Filed 12–9–05; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF DEFENSE 

GENERAL SERVICES 

ADMINISTRATION 

NATIONAL AERONAUTICS AND 

SPACE ADMINISTRATION 

48 CFR Parts 1, 2, 4, 5, 6, 7, 8, 9, 12, 

13, 15, 16, 17, 19, 22, 25, 28, 30, 32, 36, 

42, 48, 49, 50, 52, and 53 

[FAR Case 2004–033] 

RIN 9000–AK26 

Federal Acquisition Regulation; 

Inflation Adjustment of AcquisitionRelated Thresholds 

AGENCIES: Department of Defense (DoD), 

General Services Administration (GSA), 

and National Aeronautics and Space 

Administration (NASA). 

ACTION: Proposed rule. 

SUMMARY: The Civilian Agency 

Acquisition Council and the Defense 

Acquisition Regulations Council 

(Councils) are proposing to amend the 

Federal Acquisition Regulation (FAR) to 

adjust acquisition-related thresholds for 

inflation. Section 807 of the Ronald W. 

Reagan National Defense Authorization 

Act for Fiscal Year 2005 (Public Law 

108–375) requires that the FAR Council 

periodically adjust all statutory 

acquisition-related dollar thresholds in 

the FAR for inflation, except the statute 

does not permit escalation of 

acquisition-related dollar thresholds 

established by the Davis-Bacon Act, the 

Service Contract Act, or trade 

agreements. This rule also proposes to 

amend other acquisition-related 

thresholds that are based on policy 

rather than statute. Inflation adjustment 

of Cost Accounting Standards (CAS) 

thresholds in the CAS regulations is 

simultaneously addressed in a separate 

case. 

DATES: Interested parties should submit 

written comments to the FAR 

Secretariat on or before February 10, 

2006 to be considered in the 

formulation of a final rule. 

ADDRESSES: Submit comments 

identified by FAR case 2004–033 by any 

of the following methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Agency Web Site: http:// 

www.acqnet.gov/far/ProposedRules/ 

proposed.htm. Click on the FAR case 

number to submit comments. 

• E-mail: farcase.2004–033@gsa.gov. 

Include FAR case 2004–033 in the 

subject line of the message. 

• Fax: 202–501–4067. 

• Mail: General Services 

Administration, Regulatory Secretariat 

(VIR), 1800 F Street, NW, Room 4035, 

ATTN: Laurieann Duarte, Washington, 

DC 20405. 

Instructions: Please submit comments 

only and cite FAR case 2004–033 in all 

correspondence related to this case. All 

comments received will be posted 

without change to http:// 

www.acqnet.gov/far/ProposedRules/ 

proposed.htm, including any personal 

and/or business confidential 

information provided. 

FOR FURTHER INFORMATION CONTACT: The 

FAR Secretariat at (202) 501–4755 for 

information pertaining to status or 

publication schedules. For clarification 

of content, contact Mr. Michael Jackson, 

Procurement Analyst, at (202) 208–

4949. Please cite FAR case 2004–033. 

SUPPLEMENTARY INFORMATION: 

A. Background 

This proposed rule implements 

Section 807 of the Ronald W. Reagan 

National Defense Authorization Act for 

Fiscal Year 2005 (Public Law 108–375). 

Section 807 provides for adjustment 

every 5 years of acquisition-related 

thresholds, except for Davis-Bacon Act, 

Service Contract Act, and trade 

agreements thresholds, as provided by 

law. This rule also proposes escalation 

of some non-statutory acquisitionrelated thresholds. 

What is an acquisition-related 

threshold? 

The statute defines an acquisitionrelated 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 supplies 

or services by an executive agency, as 

determined by the FAR Council. 

There are other thresholds in the FAR 

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, an acquisition-related 

threshold, for the purposes of this rule, 

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 supplies 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 the 

Councils do not view as ‘‘acquisitionrelated’’ are thresholds relating to 

claims, penalties, withholding, 

payments, required levels of insurance, 

small business size standards, 

liquidated damages, etc. 

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 the 

FAR 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. 

Analysis of statutory acquisitionrelated thresholds. 

With the exception of thresholds set 

by the Davis-Bacon Act, Service 

Contract Act, and trade agreements, the 

statute requires that we 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 subject to 5 years of 

73416 Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules 

inflation. For purposes of this proposed 

rule, a matrix has been developed that 

includes calculation of escalation based 

on the CPI from December 1999 to 

December 2004 (the most recent 

available data), which currently 

calculates as 1.1307. Acquisition-related 

thresholds in statutes that took effect 

after October 1, 2000, are escalated 

proportionately for the number of 

months between the effective date of the 

statute, and October 1, 2005. 

Once the escalation factor is applied 

to the acquisition-related threshold, 

then the law requires rounding of the 

calculated threshold as follows: 

<$10,000 ....................... Nearest $500 

$10,000 - <$100,000 ..... Nearest $5,000 

$100,000 - <$1,000,000 Nearest $50,000 

$1,000,000 or more ...... Nearest $500,000 

At the current rate of inflation, this 

means that thresholds of $1,000, 

$10,000, $100,000, and $1,000,000, 

although subject to inflation calculation, 

will not actually be changed until 2010, 

because the inflation is insufficient to 

overcome the rounding requirements. 

Section 807(c) of the statute states that 

this statute supersedes the applicability 

of any other provision of law that 

provides for the adjustment of any 

acquisition-related threshold that is 

adjustable under this statute. The cost or 

pricing data threshold in the Truth in 

Negotiations Act (10 U.S.C. 2306a and 

41 U.S.C. 254b) and allowable costs 

threshold at 10 U.S.C. 2324(1) and 41 

U.S.C. 256(1) currently have built in 

escalation that is consistent with the 

escalation provided in this statute. The 

thresholds for defining a major system 

are stated in fiscal year 1990 constant 

dollars for DoD and in fiscal year 1980 

constant dollars for civilian agencies. 

This rule proposes to convert these 

major system thresholds to current year 

dollars that will be adjusted every 5 

years. 

The law tasks the FAR Council to 

carry out these inflation adjustments, 

even if the change to a statutory 

threshold affects the regulations of the 

primary implementing agency (such as 

DoL or SBA). The Councils have 

coordinated with the affected agencies 

before issuance of this proposed rule. 

Analysis of non-statutory acquisitionrelated thresholds. 

No statutory authorization is required 

to escalate thresholds that were set as 

policy within the FAR. The FAR 

acquisition-related threshold term 

‘‘simplified acquisition threshold 

(SAT)’’ is substituted for the current 

standard default of $100,000 amount for 

SAT. This revision is made to eliminate 

future FAR adjustments and to take 

advantage of the higher thresholds 

granted for special emergency 

situations. It will escalate automatically 

whenever the SAT is increased. In 

several other instances, the term ‘‘micropurchase’’ has been substituted for the 

various separate micro-purchase 

thresholds for administrative simplicity. 

Escalation of the other FAR policy 

acquisition-related thresholds has been 

calculated using the same formula 

applied to the statutory thresholds, 

unless a reason has been provided for 

not doing so. The Councils have also 

proposed changes other than escalation 

in some cases. 

Matrix of acquisition-related 

thresholds. 

A matrix of the thresholds considered 

in the drafting of this proposed rule is 

available via the Internet at http:// 

www.acqnet.gov/far/ProposedRules/ 

proposed.htm. 

Effect of this proposed rule on the 

most heavily used thresholds. 

This rule includes the following 

proposed changes to heavily used 

thresholds: 

• The micro-purchase threshold (FAR 

2.101) will be raised from $2,500 to 

$3,000. 

• The FPDS reporting threshold (FAR 

4.602(c)) will be raised from $2,500 to 

$3,000. 

• The simplified acquisition 

threshold (FAR 2.101) of $100,000 will 

not be raised. 

• Commercial items test program 

ceiling (FAR 13.500) will be raised from 

$5 million to $5.5 million. 

• The cost and pricing data threshold 

(FAR 15.403–4) will be raised from 

$550,000 to $600,000. 

• The prime contractor 

subcontracting plan (FAR 19.702) floor 

will be raised from $500,000 to 

$550,000, but for construction 

($1,000,000) is unchanged. 

Further explanation of proposed 

changes. 

FAR 2.101, definition of ‘‘Major 

system.’’ The thresholds in the 

definition of major system for DoD 

($115 million and $540 million), are 

based on fiscal year 1990 constant 

dollars. The threshold of $750,000 for 

the civilian agencies is based on fiscal 

year 1980 constant dollars. The current 

statute provides that it supersedes the 

applicability of any other provision of 

law that provides for the adjustment of 

an acquisition-related threshold. The 

Councils have calculated the 2004 value 

of these thresholds using the CPI 

inflation calculator, as $166,210,000, 

$780,460,000, and $1,719,360, 

respectively (the value of the thresholds 

in 2004 dollars at the time this statute 

was enacted). Then applying the CPI—

all urban consumers index for 1 year, 

the escalated and rounded totals are 

$171.5 million, $806 million, and $1.8 

million. 

FAR 4.601(a) and (d). 41 U.S.C. 417(a) 

and Section 1004 of Public Law 103–

355 specify the SAT as the threshold for 

the required records. The FAR has a 

policy threshold of $25,000, which was 

the threshold above which the DD 350 

was required. Under the new FPDS-NG 

case, the threshold will be changed to 

$2,500 (the new reporting threshold, 

which equals the basic micro-purchase 

threshold). The Councils recommend 

that this threshold be escalated along 

with the micro-purchase threshold to 

$3,000. 

FAR 4.602(c)(1). The threshold for 

FPDS-NG contract reporting is $2,500, 

established January 1, 2004, at the basic 

micro-purchase threshold. The micropurchase threshold is being adjusted to 

$3,000 under this rule. 

FAR Part 5—Publicizing Contract 

Actions. The Councils have consulted 

with SBA regarding the proposed 

escalation of thresholds in Part 5. The 

threshold for pre-award synopsis is 

currently $25,000 (see FAR 5.101(a), 

5.203(b), 5.205(d), and 5.207(c)(11)). 

Our international trade agreements 

require that we publish intended 

procurement subject to those 

agreements. Since the threshold for 

NAFTA (Canada) is $25,000, the 

Council does not propose to increase 

this threshold. 

At FAR 5.301, the threshold for postaward synopsis of contract awards is 

currently $25,000, if the acquisition is 

covered by a trade agreement or likely 

to result in the award of subcontracts. 

$25,000 is the threshold for NAFTA 

(Canada), and is therefore not subject to 

escalation for acquisitions subject to 

trade agreements. The threshold for 

synopsis of acquisitions likely to result 

in subcontract award could be raised to 

$30,000. The primary exception to trade 

agreements in this range is for small 

business set-asides. The likelihood of 

subcontracting opportunities under 

small business set-asides between 

$25,000 and $30,000 is probably small. 

Therefore, the Councils propose, for the 

sake of simplicity, that this threshold for 

post-award synopsis also be left at 

$25,000. 

The Councils propose to increase the 

threshold for public announcement of 

contract awards from $3 million to $3.5 

million. 

FAR 7.107(b). The Councils have 

calculated an adjusted value of $85 

million for the threshold at FAR 

7.107(b)(1) and (b)(2). The amount of 

$7.5 million, while not an acquisition 

threshold, must also be adjusted (to $8.5 

million) because it is based on the 

Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules 73417 

calculation of 10 percent of the 

threshold. 

FAR 8.405–6(f). Although these 

thresholds for sole source justification 

and approval were not incorporated in 

the FAR until July 19, 2004, they must 

be kept parallel to the thresholds at 

6.304(a). 

FAR 9.405–2(b), 9.409(b), 52.209–6, 

52.213–4(b)(2)(i). The threshold of 

$25,000 was established in the mid 

1980’s, at the time equivalent to the 

small purchase threshold, in order to 

balance the goal of not awarding 

subcontracts to contractors that have 

been debarred, suspended, or proposed 

for debarment or suspension, against the 

administrative costs of enforcing this at 

very low dollar levels. At the time the 

simplified acquisition threshold of 

$100,000 was established, the 

Suspension, Debarment, and Business 

Ethics Committee requested that as a 

matter of policy the threshold not be 

increased to $100,000. 10 U.S.C. 2393 

requires that for DoD contracts, the 

requirement for subcontractors to 

disclose whether or not the 

subcontractor is debarred or suspended 

shall apply to any subcontract that 

exceeds the simplified acquisition 

threshold. However, to keep the 

threshold at a lower level as a matter of 

policy still meets the statutory 

requirement. The Councils concur not to 

raise this threshold to $100,000. 

However, the Councils do recommend 

normal escalation for this threshold to 

$30,000. 

FAR 13.003(b)(1). These thresholds 

are for the exclusive set-aside of 

acquisitions of supplies or services for 

small business concerns. The FAR does 

not include the thresholds that apply 

outside the United States because FAR 

Part 19 (except FAR Subpart 19.6) 

applies only in the United States or its 

outlying areas (see FAR 19.000(b)). 

However, since this statement of policy 

is in FAR Part 13, the Councils 

recommend inclusion of a reference to 

FAR 19.000(b) or inclusion of the phrase 

‘‘in the United States or its outlying 

areas.’’

FAR 15.304(c)(3). The Councils have 

proposed to delete the reference to $1 

million, which was the threshold in 

1995. Since January 1, 1998, past 

performance must be evaluated for all 

contracts over $100,000, regardless of 

when the contract was awarded. These 

thresholds are based on an OFPP policy 

memo 92–5, which has since been 

rescinded (FAR case 93–002, March 31, 

1995). The Councils recommend 

changing ‘‘$100,000’’ to ‘‘simplified 

acquisition threshold’’ (see note for FAR 

42.1502(a)). 

FAR 19.1202–2(a). Federal 

Acquisition Circular (FAC) 97–07 was 

issued as an interim rule to make 

amendments to the FAR concerning 

programs for small disadvantaged 

business concerns. These amendments 

conform to a Department of Justice (DoJ) 

proposal to reform affirmative action in 

Federal procurement. DoJ’s proposal 

was designed to ensure compliance with 

the constitutional standards established 

by the Supreme Court in Adarand 

Constructors, Inc. v. Pena, 115 S.Ct. 

2097 (1995). This rule was finalized in 

FAC 97–13. These thresholds tie back to 

the thresholds in 15 U.S.C. 637(d), 

which are proposed for escalation under 

this case. Therefore, without disturbing 

the principles laid out by DoJ, it would 

be inconsistent not to keep these 

thresholds the same as those in FAR 

Subpart 19.7. 

FAR 22.103–4(b) and 22.103–5(b). 

These thresholds originated in the 

ASPR, 1 June 1967, Rev. 23 (ASPR case 

64–336). This case included a review of 

the need for administrative controls on 

Government contractors and included 

recommendations of the Defense 

Industry Advisory Council to prevent 

abuse of overtime by contractors. The 

$100,000 threshold was an 

administrative threshold, below which 

the clause would be unnecessary. The 

Councils recommend deletion of FAR 

22.103–4(b) because it is redundant to 

the clause prescription at FAR 22.103–

5(b). The Councils recommend changing 

$100,000 in FAR 22.103–5(b) to the 

‘‘simplified acquisition threshold.’’

FAR 22.1303(a) and (c), 22.1310, 

52.213–4(b)(1)(iii) and (b)(1)(v), 52.222–

35, and 52.222–37. This threshold, 

which is $25,000 in the FAR (since FAR 

case 1998–614), should be $100,000 (see 

Public Law 107–288 enacted November 

7, 2002), and is still $10,000 in the DoL 

regulations (41 CFR 60–250). This 

proposed correction has been 

coordinated with DoL. 

FAR 25.1101(a)(1). To simplify future 

changes, the Councils propose 

substitution of the term ‘‘micropurchase threshold’’ rather than trying 

to keep up with the various micropurchase threshold changes. 

FAR 25.1103(a). There is no specific 

micro-purchase exception for the 

restrictions on certain foreign 

purchases. It should, therefore, not be 

included in the clause prescription. 

However, unless a clause is specifically 

prescribed in FAR Part 13, it will not be 

included in micro-purchases. 

FAR 28.102–1, 28.102–2, and 28.102–

3. The proposed rule corrects the 

statutory cites in the FAR. The Miller 

Act (formerly 40 U.S.C. 270a–270d) and 

Section 4104(b)(2) of FASA (Public Law 

103–355) are now codified at 40 U.S.C. 

3131 and 3132. 

FAR 42.705–3(b)(4)(ii). This FAR text 

mentions ‘‘smaller contracts (e.g., 

$100,000 or less).’’ As written, this 

$100,000 may not actually be a 

threshold. It is more appropriate to say 

‘‘i.e.’’ In order to avoid the need for 

future separate escalation, the Councils 

recommend changing $100,000 to 

‘‘simplified acquisition threshold.’’

FAR 42.709(b) and 42.709–6. 

Paragraph (l) of 10 U.S.C. 2324 and 41 

U.S.C. 256 provides for escalation 

consistent with the escalation of the cost 

or pricing data threshold and this 

statute. Although this threshold should 

have been increased in 2000 to 

$550,000, it was not actually increased 

in the FAR until January 19, 2005. This 

threshold should, therefore, still be 

subject to another 5 years of inflation 

from 2000 to 2005 under this rule. 

FAR 42.1502(a). The proposed rule 

deletes the reference to $1 million, 

which was the threshold in 1995. Since 

January 1, 1998, past performance must 

be evaluated for all contracts over 

$100,000, regardless of when the 

contract was awarded. These thresholds 

are based on an OFPP policy memo 92–

5, which has since been rescinded (FAR 

case 93–002, March 31, 1995). The 

Councils recommend changing 

‘‘$100,000’’ to ‘‘simplified acquisition 

threshold.’’

FAR 52.203–6(c). For accuracy (see 41 

U.S.C. 253q (c)), simplicity, and ease of 

future changes, the Councils propose 

changing $100,000’’ to ‘‘simplified 

acquisition threshold.’’

FAR 52.212–1(j). The threshold for 

collection of the DUNS number equals 

the threshold for the requirement for 

reporting individual contract actions. 

With the implementation of the new 

FPDS-NG, the threshold for reporting 

individual contract actions is $2,500, 

which is proposed for escalation to 

$3,000 under this rule. 

FAR 52.236–1, 52.243–7, and 52.249–

1. The proposed rule modifies the 

clause prefaces for these three clauses 

because, according to the FAR Drafting 

Guide, the clause preface just cites the 

clause prescription, not restates the 

entire conditions of the clause 

prescription. These nonconforming 

clause prefaces came to light during the 

review of FAR thresholds, because they 

repeat thresholds that are contained in 

the clause prescriptions. The proposed 

revisions conform to the FAR Drafting 

Guide. Even though these thresholds are 

not changing this time, they are likely 

to increase in 5 years. This will reduce 

the number of places that the thresholds 

have to be changed. 

73418 Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules 

This is not a significant regulatory 

action and, therefore, was not subject to 

review under Section 6(b) of Executive 

Order 12866, Regulatory Planning and 

Review, dated September 30, 1993. This 

rule is not a major rule under 5 U.S.C. 

804. 

B. Regulatory Flexibility Act 

This proposed rule is not expected to 

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. 

However, an Initial Regulatory 

Flexibility Analysis (IRFA) has been 

prepared. The analysis is summarized as 

follows: 

Most of the threshold changes proposed in 

this rule are not expected to have any 

significant economic impact on small 

business because they are intended to 

maintain the status quo by adjusting for 

changes in the value of the dollar. For 

example, the prime contractor subcontracting 

plan floor at FAR 19.702 for other than 

construction contracts will be raised from 

$500,000 to $550,000. This is just keeping 

pace with inflation. 

Often, any impact will be beneficial by 

preventing burdensome requirements from 

applying to more and more small dollar value 

acquisitions, which are the acquisitions in 

which small businesses are most likely to 

participate. 

One threshold change in this rule which 

might temporarily impact small business is 

the increase of the micro-purchase threshold 

(FAR 2.101) from $2,500 to $3,000. Although 

this may reduce some burdensome 

requirement on small businesses, it will 

temporarily narrow the range of acquisitions 

automatically set aside for small business, 

because the simplified acquisition threshold 

of $100,000 will not increase at this time 

(although it is likely to increase to $150,000 

in the year 2010). 

To assess the impact of the increase in the 

micro-purchase threshold from $2,500 to 

$3,000, data was requested from FPDS-NG. 

For FY 2004, 16,031 (value of $8,083,900) of 

the contract actions between $2,500 and 

$3,000 went to small businesses. We expect 

that most of these awards would still go to 

small businesses, even if there is no longer 

a requirement to automatically set the 

procurement aside for small business. 

The FAR Secretariat has submitted a 

copy of the IRFA to the Chief Counsel 

for Advocacy of the Small Business 

Administration. A copy of the IRFA may 

be obtained from the FAR Secretariat. 

The Councils will consider comments 

from small entities concerning the 

affected FAR parts 1, 2, 4, 5, 6, 7, 8, 9, 

12, 13, 15, 16, 17, 19, 22, 25, 28, 30, 32, 

36, 42, 48, 49, 50, 52, and 53 in 

accordance with 5 U.S.C. 610. 

Comments must be submitted separately 

and should cite 5 U.S.C 601, et seq. 

(FAR case 2004–033), in 

correspondence. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act does 

apply; however, these changes to the 

FAR do not impose additional 

information collection requirements to 

the paperwork burden previously 

approved under OMB Control Numbers 

9000–0006, 9000–0007, 9000–0013, 

9000–0026, 9000–0027, 9000–0028, 

9000–0029, 9000–0037, 9000–0043, 

9000–0045, 9000–0065, 9000–0066, 

9000–0070, 9000–0078, 9000–0094, 

9000–0115, 9000–0138, 9000–0145, 

9000–0150, and 1215–0072. They 

maintain the current information 

collection requirements at the status quo 

by adjusting the thresholds for inflation. 

List of Subjects in 48 CFR Parts 1, 2, 4, 

5, 6, 7, 8, 9, 12, 13, 15, 16, 17, 19, 22, 

25, 28, 30, 32, 36, 42, 48, 49, 50, 52, and 

53 

Government procurement. 

Dated: August 16, 2005. 

Julia B. Wise, 

Director, Contract Policy Division. 

Therefore, DoD, GSA, and NASA 

propose amending 48 CFR parts 1, 2, 4, 

5, 6, 7, 8, 9, 12, 13, 15, 16, 17, 19, 22, 

25, 28, 30, 32, 36, 42, 48, 49, 50, 52, and 

53 as set forth below: 

1. The authority citation for 48 CFR 

parts 1, 2, 4, 5, 6, 7, 8, 9, 12, 13, 15, 16, 

17, 19, 22, 25, 28, 30, 32, 36, 42, 48, 49, 

50, 52, and 53 is revised to read as 

follows: 

Authority: 40 U.S.C. 121(c); 10 U.S.C. 

chapter 137; and 42 U.S.C. 2473(c). 

PART 1—FEDERAL ACQUISITION 

REGULATIONS SYSTEM 

2. Add section 1.109 to read as 

follows: 

1.109 Statutory acquisition-related dollar 

thresholds—Adjustment for inflation. 

(a) Section 807 of the Ronald W. 

Reagan National Defense Authorization 

Act for Fiscal Year 2005 (Public Law 

108–375) requires that the FAR Council 

periodically adjust all statutory 

acquisition-related dollar thresholds in 

the FAR for inflation, except as 

provided in paragraph (c) of this 

section. This adjustment is calculated 

every 5 years, starting in October 2005, 

using the Consumer Price Index (CPI) 

for all-urban consumers, and supersedes 

the applicability of any other provision 

of law that provides for the adjustment 

of such acquisition-related dollar 

thresholds. 

(b) The statute defines an acquisitionrelated 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 supplies 

or services by an executive agency, as 

determined by the FAR Council. 

(c) The statute does not permit 

escalation of acquisition-related dollar 

thresholds established by the DavisBacon Act (40 U.S.C. 3141 through 

3144, 3146, and 3147), the Service 

Contract Act of 1965 (41 U.S.C. 351, et 

seq.), or the United States Trade 

Representative pursuant to the authority 

of the Trade Agreements Act of 1979 (19 

U.S.C. 2511, et seq.). 

(d) A matrix showing calculation of 

the most recent escalation adjustments 

of statutory acquisition-related dollar 

thresholds is available via the Internet at 

http://www.acqnet.gov/far/ 

ProposedRules/proposed.htm. 

PART 2—DEFINITIONS OF WORDS 

AND TERMS 

3. Amend section 2.101 in paragraph 

(b), in the definition ‘‘Major system’’, by 

revising paragraph (1), and removing 

from paragraph (2) ‘‘$750,000 (based on 

fiscal year 1980 constant dollars)’’ and 

adding ‘‘$1.8 million’’ in its place; and 

in the definition ‘‘Micro-purchase 

threshold’’ by removing from the 

introductory paragraph ‘‘$2,500’’ and 

adding ‘‘$3,000’’ in its place. The 

revised text reads as follows: 

2.101 Definitions. 

* * * * * 

(b) * * * 

Major system * * * 

(1) The Department of Defense is 

responsible for the system and the total 

expenditures for research, development, 

test, and evaluation for the system are 

estimated to be more than $171.5 

million or the eventual total 

expenditure for the acquisition exceeds 

$806 million; 

* * * * * 

PART 4—ADMINISTRATIVE MATTERS 

4.601 [Amended] 

4. Amend section 4.601 by removing 

from paragraph (a) and the introductory 

text of paragraph (d) ‘‘$25,000’’ and 

adding ‘‘$3,000’’ in their place; and by 

removing from paragraph (e) 

‘‘$5,000,000’’ and adding ‘‘$5.5 million’’

in its place. 

4.602 [Amended] 

5. Amend section 4.602 by removing 

from paragraphs (c)(1) and (c)(3) 

‘‘$2,500’’ and adding ‘‘$3,000’’ in their 

place; and by removing paragraph (c)(4). 

Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules 73419 

PART 5—PUBLICIZING CONTRACT 

ACTIONS 

6. Amend section 5.303 by revising 

paragraph (a) to read as follows: 

5.303 Announcement of contract awards. 

(a) Public announcement. Contracting 

officers shall make information 

available on awards over $3.5 million 

(unless another dollar amount is 

specified in agency acquisition 

regulations) in sufficient time for the 

agency concerned to announce it by 5 

p.m. Washington, DC, time on the day 

of award. Contracts excluded from this 

reporting requirement include—

(1) Those placed with the Small 

Business Administration under Section 

8(a) of the Small Business Act; 

(2) Those placed with foreign firms 

when the place of delivery or 

performance is outside the United States 

and its outlying areas; and 

(3) Those for which synopsis was 

exempted under 5.202(a)(1). Agencies 

shall not release information on awards 

before the public release time of 5 p.m. 

Washington, DC time. 

* * * * * 

PART 6—COMPETITION 

REQUIREMENTS 

6.304 [Amended] 

7. Amend section 6.304 by—

a. Removing from paragraph (a)(1) 

‘‘$500,000’’ and adding ‘‘$550,000’’ in 

its place; 

b. Removing from paragraph (a)(2) 

‘‘$500,000’’ and ‘‘$10,000,000’’ and 

adding ‘‘$550,000’’ and ‘‘$11.5 million’’, 

respectively, in their place; 

c. Removing from paragraph (a)(3) 

$10,000,000’’, ‘‘$50,000,000’’, and 

‘‘$75,000,000’’ and adding ‘‘$11.5 

million’’, ‘‘$56.5 million’’, and ‘‘$77.5 

million’’, respectively, in their place; 

and 

d. Removing from paragraph (a)(4) 

‘‘$50,000,000’’ and ‘‘75,000,000’’ and 

adding ‘‘$56.5 million’’ and ‘‘$77.5 

million’’, respectively, in their place. 

PART 7—ACQUISITION PLANNING 

7.104 [Amended] 

8. Amend section 7.104 by removing 

from paragraph (d)(2)(i)(A) ‘‘$7 million’’

and adding ‘‘$7.5 million’’ in its place; 

and removing from paragraph 

(d)(2)(i)(B) ‘‘$5 million’’ and adding 

‘‘$5.5 million’’ in its place. 

7.107 [Amended] 

9. Amend section 7.107 by removing 

from paragraph (b)(1) ‘‘$75 million’’ and 

adding ‘‘$85 million’’ in its place; and 

removing from paragraph (b)(2) ‘‘$7.5 

million’’ and ‘‘75 million’’ and adding 

‘‘$8.5 million’’ and ‘‘$85 million’’, 

respectively, in their place. 

PART 8—REQUIRED SOURCES OF 

SUPPLIES AND SERVICES 

8.405–6 [Amended] 

10. Amend section 8.405–6 by—

a. Removing from paragraph (f)(1) 

‘‘$500,000’’ and adding ‘‘$550,000’’ in 

its place; 

b. Removing from paragraph (f)(2) 

‘‘$500,000, but not exceeding $10 

million’’ and adding ‘‘$550,000, but not 

exceeding $11.5 million’’ in its place; 

c. Removing from the introductory 

text of paragraph (f)(3) ‘‘$10 million’’, 

‘‘$50 million’’, and ‘‘$75 million’’, and 

adding ‘‘$11.5 million’’, ‘‘$56.5 

million’’, and ‘‘$77.5 million’’, 

respectively, in their place; and 

d. Removing from the first sentence of 

paragraph (f)(4) ‘‘$50 million’’ and ‘‘$75 

million’’ and adding ‘‘$56.5 million’’

and ‘‘$77.5 million’’, respectively, in 

their place. 

PART 9—CONTRACTOR 

QUALIFICATIONS 

9.405–2 [Amended] 

11. Amend section 9.405–2 in the 

second sentence of the introductory text 

of paragraph (b) by removing ‘‘$25,000’’

and adding ‘‘$30,000’’ in its place. 

9.409 [Amended] 

12. Amend section 9.409 in paragraph 

(b) by removing ‘‘$25,000’’ and adding 

‘‘$30,000’’ in its place. 

PART 12—ACQUISITION OF 

COMMERCIAL ITEMS 

12.102 [Amended] 

13. Amend section 12.102 by 

removing from the introductory text of 

paragraph (f)(2) ‘‘$15,000,000’’ and 

adding ‘‘$15.5 million’’ in its place; and 

removing from paragraph (g)(1)(ii) ‘‘$25 

million’’ and adding ‘‘$26 million’’ in 

its place. 

12.203 [Amended] 

14. Amend section 12.203 by 

removing from the last sentence ‘‘$5 

million’’ and ‘‘$10 million’’ and adding 

‘‘$5.5 million’’ and ‘‘$10.5 million’’, 

respectively, in their place. 

PART 13—SIMPLIFIED ACQUISITION 

PROCEDURES 

13.000 [Amended] 

15. Amend section 13.000 by 

removing from the second sentence ‘‘$5 

million’’ and ‘‘$10 million’’ and adding 

‘‘$5.5 million’’ and ‘‘$10.5 million’’, 

respectively, in their place. 

13.003 [Amended] 

16. Amend section 13.003 by—

a. Removing from the first sentence of 

paragraph (b)(1) ‘‘$2,500’’ and adding 

‘‘$3,000’’ in its place; and in the second 

sentence, by adding ‘‘19.000(b) and’’

after the word ‘‘See’’; and 

b. Removing from paragraphs (c)(1)(ii) 

and (g)(2) ‘‘$5 million’’ and ‘‘$10 

million’’ and adding ‘‘$5.5 million’’ and 

‘‘$10.5 million’’, respectively, in their 

place. 

13.005 [Amended] 

17. Amend section 13.005 in 

paragraph (a)(2) by removing ‘‘$25,000’’

and adding ‘‘$30,000 (40 U.S.C. 4132).)’’

in its place. 

13.106–1 [Amended] 

18. Amend section 13.106–1 by 

removing from paragraph (c)(2) and the 

first sentence of paragraph (d) 

‘‘$25,000’’ and adding ‘‘$30,000’’ in 

their place. 

13.303–5 [Amended] 

19. Amend section 13.303–5 by 

removing from paragraph (b)(1) 

‘‘$5,000,000’’ and ‘‘$10,000,000’’ and 

adding ‘‘$5.5 million’’ and ‘‘$10.5 

million’’ in their place; and removing 

from paragraph (b)(2) ‘‘$5 million’’ and 

‘‘$10 million’’ and adding ‘‘$5.5 

million’’ and ‘‘$10.5 million’’, 

respectively, in their place. 

13.402 [Amended] 

20. Amend section 13.402 by 

removing from paragraph (a) ‘‘$25,000’’

and adding ‘‘30,000’’ in its place. 

13.500 [Amended] 

21. Amend section 13.500 by 

removing from the first sentence of 

paragraph (a) the phrase ‘‘$5 million 

($10 million’’ and adding the phrase 

‘‘$5.5 million ($10.5 million’’ in its 

place; and removing from the 

introductory text of paragraph (e) ‘‘$10 

million’’ and adding ‘‘$10.5 million’’ in 

its place. 

22. Amend section 13.501 by 

removing from paragraph (a)(2)(i) 

‘‘$500,000’’ and adding ‘‘$550,000’’ in 

its place; removing from paragraph 

(a)(2)(ii) ‘‘$500,000’’ and ‘‘$10,000,000’’

and adding ‘‘$550,000’’ and ‘‘$11.5 

million’’, respectively, in their place; 

and revising paragraphs (a)(2)(iii) and 

(a)(2)(iv) to read as follows: 

13.501 Special documentation 

requirements. 

(a) * * * 

(2) * * * 

(iii) For a proposed contract 

exceeding $11.5 million, but not 

exceeding $56.5 million, or for DoD, 

NASA, and the Coast Guard, not 

73420 Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules 

exceeding $77.5 million, the head of the 

procuring activity or the official 

described in 6.304(a)(3) or (a)(4) must 

approve the justification and approval. 

This authority is not delegable. 

(iv) For a proposed contract exceeding 

$56.5 million, or for DoD, NASA, and 

the Coast Guard, over $77.5 million, the 

official described in 6.304(a)(4) must 

approve the justification and approval. 

This authority is not delegable except as 

provided in 6.304(a)(4). 

* * * * * 

PART 15—CONTRACTING BY 

NEGOTIATION 

23. Amend section 15.304 by 

removing paragraph (c)(3)(i); 

redesignating paragraphs (c)(3)(ii), 

(c)(3)(iii), and (c)(3)(iv) as (c)(3)(i), 

(c)(3)(ii), and (c)(3)(iii), respectively; 

revising newly designated paragraph 

(c)(3)(i); and removing from paragraph 

(c)(4) ‘‘$500,000’’ and adding 

‘‘$550,000’’ in its place. The revised text 

reads as follows: 

15.304 Evaluation factors and significant 

subfactors. 

* * * * * 

(c) * * * 

(3)(i) Except as set forth in paragraph 

(c)(3)(iii) of this section, past 

performance shall be evaluated in all 

source selections for negotiated 

competitive acquisitions expected to 

exceed the simplified acquisition 

threshold. 

* * * * * 

15.403–1 [Amended] 

24. Amend section 15.403–1 by 

removing from paragraph (c)(3)(iii) 

‘‘$15,000,000’’ and adding ‘‘$15.5 

million’’ in its place. 

25. Amend section 15.403–4 by 

removing from the third sentence of the 

introductory text of paragraph (a)(1) 

‘‘$550,000’’ and adding ‘‘$600,000’’ in 

its place; and revising the second 

sentence of paragraph (a)(1)(iii) to read 

as follows: 

15.403–4 Requiring cost or pricing data 

(10 U.S.C. 2306a and 41 U.S.C. 254b). 

(a)(1) * * * 

(iii) * * * Price adjustment amounts 

must consider both increases and 

decreases (e.g., a $200,000 modification 

resulting from a reduction of $500,000 

and an increase of $300,000 is a pricing 

adjustment exceeding $600,000. * * * 

* * * * * 

15.404–3 [Amended] 

26. Amend section 15.404–3 by 

removing from paragraph (c)(1)(i) 

‘‘$10,000,000’’ and adding ‘‘$11.5 

million’’ in its place. 

15.407–2 [Amended] 

27. Amend section 15.407–2 by 

removing from paragraphs (c)(1) and the 

introductory text of paragraph (c)(2) 

‘‘$10 million’’ and adding ‘‘$11.5 

million’’ in its place. 

15.408 [Amended] 

28. Amend section 15.408 in Table 

15–2 following paragraph (m), in section 

II, Cost Elements, in the third sentence 

of paragraph (A)(2), by removing 

‘‘$10,000,000’’ and adding ‘‘$11.5 

million’’ in its place. 

PART 16—TYPES OF CONTRACTS 

16.503 [Amended] 

29. Amend section 16.503 by 

removing from paragraph (d)(1) 

‘‘$10,000,000’’ and adding ‘‘$11.5 

million’’ in its place. 

16.504 [Amended] 

30. Amend section 16.504 by 

removing from the introductory text of 

paragraph (c)(2)(i) ‘‘$10 million’’ and 

adding ‘‘$11.5 million’’ in its place. 

16.505 [Amended] 

31. Amend section 16.505 by 

removing from paragraph (b)(1)(i) and 

the introductory text of paragraph (b)(2) 

‘‘$2,500’’ and adding ‘‘$3,000’’ in its 

place. 

16.506 [Amended] 

32. Amend section 16.506 by 

removing from paragraphs (f) and (g) 

‘‘$10 million’’ and adding ‘‘$11.5 

million’’ in its place. 

16.601 [Amended] 

33. Amend section 16.601 by 

removing from paragraph (b)(3)(i) 

‘‘$25,000’’ and adding ‘‘$30,000’’ in its 

place. 

PART 17—SPECIAL CONTRACTING 

METHODS 

17.108 [Amended] 

34. Amend section 17.108 in 

paragraph (a) by removing ‘‘$10 

million’’ and adding ‘‘$11.5 million’’ in 

its place; and in paragraph (b) by 

removing ‘‘$100 million’’ and adding 

‘‘$113 million’’ in its place. 

PART 19—SMALL BUSINESS 

PROGRAMS 

19.502–1 [Amended] 

35. Amend section 19.502–1 by 

removing from paragraph (b) ‘‘$2,500’’

and adding ‘‘$3,000’’ in its place. 

19.502–2 [Amended] 

36. Amend section 19.502–2 by 

removing from the first sentence of 

paragraph (a) ‘‘$2,500’’ and adding 

‘‘$3,000’’ in its place; and removing 

from paragraph (d) ‘‘$25,000’’ and 

adding ‘‘$30,000’’ in its place. 

19.702 [Amended] 

37. Amend section 19.702 by 

removing from paragraphs (a)(1) and 

(a)(2) ‘‘$500,000’’ and adding 

‘‘$550,000’’ in its place. 

19.704 [Amended] 

38. Amend section 19.704 by 

removing from paragraph (a)(9) 

‘‘$500,000’’ and adding ‘‘$550,000’’ in 

its place. 

19.708 [Amended] 

39. Amend section 19.708 by 

removing from the first sentence of 

paragraph (b)(1) ‘‘$500,000’’ and adding 

‘‘$550,000’’ in its place. 

19.805–1 [Amended] 

40. Amend section 19.805–1 by 

removing from paragraph (a)(2) 

‘‘$5,000,000’’ and ‘‘$3,000,000’’ and 

adding ‘‘$5.5 million’’ and ‘‘$3.5 

million’’, respectively, in their place. 

19.1002 [Amended] 

41. Amend section 19.1002 by 

removing from paragraph (1) of the 

definition ‘‘Emerging small business 

reserve amount’’, ‘‘$25,000’’ and adding 

‘‘$30,000’’ in its place. 

19.1007 [Amended] 

42. Amend section 19.1007 by 

removing from paragraphs (c)(1)(i) and 

(c)(1)(ii) ‘‘$25,000’’ and adding 

‘‘$30,000’’ in its place. 

19.1008 [Amended] 

43. Amend section 19.1008 by 

removing from paragraph (c) ‘‘$25,000’’

and adding ‘‘$30,000’’ in its place. 

19.1202–2 [Amended] 

44. Amend section 19.1202–2 by 

removing from paragraph (a) ‘‘$500,000’’

and adding ‘‘$550,000’’ in its place. 

19.1306 [Amended] 

45. Amend section 19.1306 by 

removing from paragraph (a)(2)(i) 

‘‘$5,000,000’’ and adding ‘‘$5.5 million’’

in its place; and removing from 

paragraph (a)(2)(ii) ‘‘$3,000,000’’ and 

adding ‘‘$3.5 million’’ in its place. 

PART 22—APPLICATION OF LABOR 

LAWS TO GOVERNMENT 

ACQUISITIONS 

22.103–4 [Amended] 

46. Amend section 22.103–4 in 

paragraph (b) by removing the last 

sentence. 

22.103–5 [Amended] 

47. Amend section 22.103–5 in the 

introductory text of paragraph (b) by 

Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules 73421 

removing ‘‘be over $100,000;’’ and 

adding ‘‘exceed the simplified 

acquisition threshold;’’ in its place. 

22.305 [Amended] 

48. Amend section 22.305 by 

removing from paragraph (a) ‘‘the 

simplified acquisition threshold;’’ and 

adding ‘‘$100,000;’’ in its place. 

22.1103 [Amended] 

49. Amend section 22.1103 by 

removing from the second sentence 

‘‘$500,000’’ and adding ‘‘$550,000’’ in 

its place. 

22.1303 [Amended] 

50. Amend section 22.1303 by 

removing from paragraphs (a) and (c) 

‘‘$25,000’’ and adding ‘‘$100,000’’ in its 

place. 

22.1310 [Amended] 

51. Amend section 22.1310 by 

removing from the introductory text of 

paragraph (a)(1) ‘‘$25,000’’ and adding 

‘‘$100,000’’ in its place. 

PART 25—FOREIGN ACQUISITION 

52. Amend section 25.1101 in the 

introductory text of paragraph (a)(1) by 

removing ‘‘$2,500 ($15,000 for 

acquisitions as described in 

13.201(g)(1)’’) and adding ‘‘the micropurchase threshold’’ in its place; and 

revising paragraphs (e)(1) and (e)(2) to 

read as follows: 

25.1101 Acquisition of supplies. 

* * * * * 

(e) * * * 

(1) Exceeds the simplified acquisition 

threshold; or 

(2) Does not exceed the simplified 

acquisition threshold, but the savings 

from waiving the duty is anticipated to 

be more than the administrative cost of 

waiving the duty. When used for 

acquisitions that do not exceed the 

simplified acquisition threshold, the 

contracting officer may modify 

paragraphs (b)(1) and (i)(2) of the clause 

to reduce the dollar figure. 

25.1103 [Amended] 

53. Amend section 25.1103 in 

paragraph (a) by removing ‘‘with a value 

exceeding $2,500, $15,000 for 

acquisitions as described in 

13.201(g)(1)’’. 

PART 28—BONDS AND INSURANCE 

28.102-1 [Amended] 

54. Amend section 28.102-1 by 

removing from the introductory text of 

paragraph (b)(1) ‘‘$25,000’’ and adding 

‘‘$30,000’’ in its place. 

28.102–2 [Amended] 

55. Amend section 28.102–2 by 

removing from the heading of paragraph 

(c) ‘‘$25,000’’ and adding ‘‘$30,000’’ in 

its place. 

28.102–3 [Amended] 

56. Amend section 28.102–3 in the 

first sentence of paragraph (b) by 

removing ‘‘$25,000’’ and adding 

‘‘$30,000’’ in its place. 

PART 30—COST ACCOUNTING 

STANDARDS ADMINISTRATION 

30.201–4 [Amended] 

57. Amend section 30.201–4 by 

removing from paragraph (b)(1) 

‘‘$500,000’’ and ‘‘$50 million’’ and 

adding ‘‘$550,000’’ and ‘‘$56.5 million’’, 

respectively, in their place. 

30.201–5 [Amended] 

58. Amend section 30.201–5 by 

removing from the introductory text of 

paragraph (b)(1) ‘‘$15,000,000’’ and 

adding ‘‘$17 million’’ in its place. 

PART 32—CONTRACT FINANCING 

32.104 [Amended] 

59. Amend section 32.104 by 

removing from paragraphs (d)(2)(i) and 

(d)(2)(ii) ‘‘$2 million’’ and adding ‘‘$2.5 

million’’ in its place. 

PART 36—CONSTRUCTION AND 

ARCHITECT-ENGINEER CONTRACTS 

36.201 [Amended] 

60. Amend section 36.201 by 

removing from paragraph (a)(1)(i) 

‘‘$500,000’’ and adding ‘‘$550,000’’ in 

its place. 

61. Amend section 36.203 by revising 

paragraph (a) to read as follows: 

36.203 Government estimate of 

construction costs. 

(a) An independent Government 

estimate of construction costs shall be 

prepared and furnished to the 

contracting officer at the earliest 

practicable time for each proposed 

contract and for each contract 

modification anticipated to exceed the 

simplified acquisition threshold. The 

contracting officer may require an 

estimate when the cost of required work 

is not anticipated to exceed the 

simplified acquisition threshold. The 

estimate shall be prepared in as much 

detail as though the Government were 

competing for award. 

* * * * * 

62. Amend section 36.213–2 by 

revising paragraph (a) to read as follows: 

36.213–2 Presolicitation notices. 

(a) Unless the requirement is waived 

by the head of the contracting activity 

or a designee, the contracting officer 

shall issue presolicitation notices on 

any construction requirement when the 

proposed contract is expected to exceed 

the simplified acquisition threshold. 

Presolicitation notices may also be used 

when the proposed contract is not 

expected to exceed the simplified 

acquisition threshold. These notices 

shall be issued sufficiently in advance 

of the invitation for bids to stimulate the 

interest of the greatest number of 

prospective bidders. 

* * * * * 

36.604 [Amended] 

63. Amend section 36.604 by 

removing from the introductory text of 

paragraph (a) ‘‘$25,000’’ each time it 

appears (twice) and adding ‘‘$30,000’’ in 

its place. 

36.605 [Amended] 

64. Amend section 36.605 by 

removing from the first sentence of 

paragraph (a) ‘‘$100,000’’ and adding 

‘‘the simplified acquisition threshold’’

in its place. 

PART 42—CONTRACT 

ADMINISTRATION AND AUDIT 

SERVICES 

42.705–3 [Amended] 

65. Amend section 42.705–3 by 

removing from the fourth sentence of 

the introductory text of paragraph 

(b)(4)(ii) ‘‘(e.g., $100,000 or less’’) and 

adding ‘‘(i.e., contracts that do not 

exceed the simplified acquisition 

threshold)’’ in its place. 

42.709 [Amended] 

66. Amend section 42.709 by 

removing from paragraph (b) 

‘‘$550,000’’ and adding ‘‘$600,000’’ in 

its place. 

42.709–6 [Amended] 

67. Amend section 42.709–6 by 

removing from the first sentence 

‘‘$550,000’’ and adding ‘‘$600,000’’ in 

its place. 

68. Amend section 42.1502 by 

revising the first sentence of paragraph 

(a) to read as follows: 

42.1502 Policy. 

(a) Except as provided in paragraph 

(b) of this section, agencies shall prepare 

an evaluation of contractor performance 

for each contract that exceeds the 

simplified acquisition threshold at the 

time the work under the contract is 

completed. * * * 

* * * * * 

73422 Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules 

PART 48—VALUE ENGINEERING 

48.201 [Amended] 

69. Amend section 48.201 by 

removing from the first sentence of the 

introductory text of paragraph (a) ‘‘be 

$100,000 or more,’’ and adding ‘‘exceed 

the simplified acquisition threshold,’’ in 

its place. 

48.202 [Amended] 

70. Amend section 48.202 by 

removing from the first sentence ‘‘be 

$100,000 or more,’’ and adding ‘‘exceed 

the simplified acquisition threshold,’’ in 

its place. 

PART 49—TERMINATION OF 

CONTRACTS 

71. Amend section 49.502 by revising 

the heading of paragraph (a) and the 

introductory text of paragraph (a)(1); 

and revising paragraph (b) to read as 

follows: 

49.502 Termination for convenience of the 

Government. 

(a) Fixed-price contracts that do not 

exceed the simplified acquisition 

threshold (short form).—(1) General use. 

The contracting officer shall insert the 

clause at 52.249–1, Termination for 

Convenience of the Government (FixedPrice) (Short Form), in solicitations and 

contracts when a fixed-price contract is 

contemplated and the contract amount 

is not expected to exceed the simplified 

acquisition threshold, except—

* * * * * 

(b) Fixed-price contracts that exceed 

the simplified acquisition threshold.—

(1)(i) General use. The contracting 

officer shall insert the clause at 52.249–

2, Termination for Convenience of the 

Government (Fixed-Price), in 

solicitations and contracts when a fixedprice contract is contemplated and the 

contract amount is expected to exceed 

the simplified acquisition threshold, 

except in contracts for—

(A) Dismantling and demolition; 

(B) Research and development work 

with an educational or nonprofit 

institution on a no-profit basis; or 

(C) Architect-engineer services. It 

shall not be used if the clause at 52.249–

4, Termination for Convenience of the 

Government (Services) (Short Form), is 

appropriate (see 49.502(c)), or one of the 

clauses prescribed or cited at 49.505(a), 

(b), or (e), is appropriate. 

(2) Construction. If the contract is for 

construction, the contracting officer 

shall use the clause with its Alternate I. 

(i) Partial payments. If the contract is 

with an agency of the U.S. Government 

or with State, local, or foreign 

governments or their agencies, and if the 

contracting officer determines that the 

requirement to pay interest on excess 

partial payments is inappropriate, the 

contracting officer shall use the clause 

with its Alternate II. In such contracts 

for construction, the contracting officer 

shall use the clause with its Alternate 

III. 

(ii) Dismantling and demolition. The 

contracting officer shall insert the clause 

at 52.249–3, Termination for 

Convenience of the Government 

(Dismantling, Demolition, or Removal of 

Improvements) in solicitations and 

contracts for dismantling, demolition, or 

removal of improvements, when a fixedprice contract is contemplated and the 

contract amount is expected to exceed 

the simplified acquisition threshold. If 

the contract is with an agency of the 

U.S. Government or with State, local, or 

foreign governments or their agencies, 

and if the contracting officer determines 

that the requirement to pay interest on 

excess partial payments is 

inappropriate, the contracting officer 

shall use the clause with its Alternate I. 

* * * * * 

PART 50—EXTRAORDINARY 

CONTRACTUAL ACTIONS 

50.201 [Amended] 

72. Amend section 50.201 by 

removing from paragraph (b) ‘‘$50,000’’

and adding ‘‘$55,000’’ in its place. 

50.203 [Amended] 

73. Amend section 50.203 by 

removing from paragraph (b)(4) ‘‘$25 

million’’ and adding ‘‘$28.5 million’’ in 

its place; and removing from paragraphs 

(e)(1)(i) and (e)(1)(ii) ‘‘$50,000’’ and 

adding ‘‘$55,000’’ in its place. 

PART 52—SOLICITATION PROVISIONS 

AND CONTRACT CLAUSES 

52.203–6 [Amended] 

74. Amend section 52.203–6 by 

revising the date of the clause to read 

‘‘(Date)’’; and removing from paragraph 

(c) of the clause ‘‘$100,000’’ and adding 

‘‘the simplified acquisition threshold’’

in its place. 

52.209–6 [Amended] 

75. Amend section 52.209–6 by 

revising the date of the clause to read 

‘‘(Date)’’; and removing from paragraphs 

(a) and (b) of the clause ‘‘$25,000’’ and 

adding ‘‘$30,000’’ in its place. 

52.212–1 [Amended] 

76. Amend section 52.212–1 by 

revising the date of the clause to read 

‘‘(Date)’’; and removing from the first 

sentence of paragraph (j) of the clause 

‘‘$25,000’’ each time it appears (twice) 

and adding ‘‘$3,000’’ in its place. 

52.212–5 [Amended] 

77. Amend section 52.212–5 by—

a. Revising the date of the clause to 

read ‘‘(Date)’’; 

b. Removing from paragraph (b)(1) of 

the clause ‘‘(Oct 1995)’’ and adding 

‘‘(Date)’’ in its place; 

c. Removing from paragraph (b)(8)(i) 

of the clause ‘‘(July 2005)’’ and adding 

‘‘(Date)’’ in its place; 

d. Removing from paragraphs (b)(18) 

and (b)(20) of the clause ‘‘(Dec 2001)’’

and adding ‘‘(Date)’’ in its place; and 

e. Removing from paragraph (e)(1)(i) 

‘‘$500,000’’ and adding ‘‘$550,000’’ in 

its place; and removing from paragraph 

(e)(1)(iii) ‘‘(Dec 2001)’’ and adding 

‘‘(Date)’’ in its place. 

52.213–4 [Amended] 

78. Amend section 52.213–4 by—

a. Revising the date of the clause to 

read ‘‘(Date)’’; 

b. Removing from paragraph (a)(2)(vi) 

of the clause ‘‘(Dec 2004)’’ and adding 

‘‘(Date)’’ in its place; and 

c. Removing from paragraphs 

(b)(1)(iii) and (b)(1)(v) of the clause 

‘‘(Dec 2001)’’ and ‘‘$25,000’’ and adding 

‘‘(Date)’’ and ‘‘$100,000’’, respectively, 

in their place; and removing from 

paragraph (b)(2)(i) ‘‘(Jan 2005)’’ and 

‘‘$25,000’’ and adding ‘‘(Date)’’ and 

‘‘$30,000’’, respectively, in their place. 

52.219–9 [Amended] 

79. Amend section 52.219–9 by 

revising the date of the clause to read 

‘‘(Date)’’; and removing from paragraph 

(d)(9) of the clause ‘‘$500,000’’ and 

adding ‘‘$550,000’’ in its place. 

52.222–35 [Amended] 

80. Amend section 52.222–35 by 

revising the date of the clause to read 

‘‘(Date)’’; and removing from the first 

sentence of paragraph (g) of the clause 

‘‘$25,000’’ and adding ‘‘$100,000’’ in its 

place. 

52.222–37 [Amended] 

81. Amend section 52.222–37 by 

revising the date of the clause to read 

‘‘(Date)’’; and removing from paragraph 

(f) of the clause ‘‘$25,000’’ and adding 

‘‘$100,000’’ in its place. 

52.230–1 [Amended] 

82. Amend section 52.230–1 by 

revising the date of the provision to read 

‘‘(Date)’’; removing from paragraph (a) of 

the provision ‘‘$500,000’’ and adding 

‘‘$550,000’’ in its place; and removing 

‘‘$50 million’’ each time it appears in 

the provision (5 times) and adding 

‘‘$56.6 million’’ in its place. 

52.230–2 [Amended] 

83. Amend section 52.230–2 by 

revising the date of the clause to read 

Federal Register / Vol. 70, No. 237 / Monday, December 12, 2005 / Proposed Rules 73423 

‘‘(Date)’’; and removing from the last 

sentence of paragraph (d) of the clause 

‘‘$500,000’’ and adding ‘‘$550,000’’ in 

its place. 

52.230–3 [Amended] 

84. Amend section 52.230–3 by 

revising the date of the clause to read 

‘‘(Date)’’; and removing from paragraph 

(d)(2) ‘‘$500,000’’ and adding 

‘‘$550,000’’ in its place. 

52.230–5 [Amended] 

85. Amend section 52.230–5 by 

revising the date of the clause to read 

‘‘(Date)’’; and removing from paragraph 

(d)(2) of the clause ‘‘$500,000’’ and 

adding ‘‘$550,000’’ in its place. 

86. Amend section 52.236–1 by 

revising the introductory paragraph to 

read as follows: 

52.236–1 Performance of Work by the 

Contractor. 

As prescribed in 36.501(b), insert the 

following clause. Complete the clause 

by inserting the appropriate percentage 

consistent with the complexity and 

magnitude of the work and customary or 

necessary specialty subcontracting (see 

36.501(a)): 

* * * * * 

87. Amend section 52.243–7 by 

revising the introductory paragraph to 

read as follows: 

52.243–7 Notification of Changes. 

As prescribed in 43.107, insert the 

following clause: 

* * * * * 

52.244–6 [Amended] 

88. Amend section 52.244–6 by 

revising the date of the clause to read 

‘‘(Date)’’; removing from paragraph 

(c)(1)(i) of the clause ‘‘$500,000’’ and 

adding ‘‘$550,000’’ in its place, and 

removing from paragraph (c)(1)(iii) of 

the clause ‘‘(Dec 2001)’’ and adding 

‘‘(Date)’’ in its place. 

52.248–3 [Amended] 

89. Amend section 52.248–3 by 

revising the date of the clause to read 

‘‘(Date)’’; and removing from the first 

sentence of paragraph (h) of the clause 

‘‘$50,000’’ and adding ‘‘$55,000’’ in its 

place. 

90. Amend section 52.249–1 by 

revising the introductory paragraph to 

read as follows: 

52.249–1 Termination for Convenience of 

the Government (Fixed-Price) (Short Form). 

As prescribed in 49.502(a)(1), insert 

the following clause: 

* * * * * 

PART 53—FORMS 

53.219 [Amended] 

91. Amend section 53.219 by 

removing from paragraphs (a) and (b) 

‘‘(Rev. 10/01)’’ and adding ‘‘(Date)’’ in 

its place. 

53.301–294 [Amended] 

92. Amend section 53.301–294 at the 

bottom of page 1 of the form by revising 

the date of the form to read ‘‘(Date)’’; 

and on page 2 of the form, by removing 

from the first sentence of paragraph 3, 

under General Instructions, ‘‘$500,000’’

and adding ‘‘$550,000’’ in its place. 

53.301–295 [Amended] 

93. Amend section 53.301–295 at the 

bottom of page 1 of the form by revising 

the date of the form to read ‘‘(Date)’’; 

and on page 2 of the form, by removing 

from the first sentences of paragraphs 2 

and 5, under General Instructions, 

‘‘$500,000’’ and adding ‘‘$550,000’’ in 

their place. 

[FR Doc. 05–16971 Filed 12–9–05; 8:45 am] 

BILLING CODE 6820–EP–S 

OFFICE OF MANAGEMENT AND 

BUDGET 

Office of Federal Procurement Policy 

48 CFR Parts 9901 and 9903 

Cost Accounting Standards Board 

(CAS) Changes to Acquisition 

Thresholds 

AGENCY: Cost Accounting Standards 

Board, Office of Federal Procurement 

Policy, OMB. 

ACTION: Proposed rule with request for 

comment. 

SUMMARY: The Cost Accounting 

Standards (CAS) Board is proposing to 

adjust the CAS application and full 

coverage thresholds for inflation in 

accordance with section 807 of the 

Ronald W. Reagan National Defense 

Authorization Act for Fiscal Year 2005 

(Pub. L. 108–375). 

DATES: Comments upon this proposed 

rule must be in writing and must be 

received by February 10, 2006. 

ADDRESSES: Due to delays in OMB’s 

receipt and processing of mail, 

respondents are strongly encouraged to 

submit comments electronically to 

ensure timely receipt. Electronic 

comments may be submitted to 

casb2@omb.eop.gov. Please put the full 

body of your comments in the text of the 

electronic message and also as an 

attachment readable in either MS Word 

or Corel WordPerfect. Please include 

your name, title, organization, postal 

address, telephone number, and e-mail 

address in the text of the message. 

Comments may also be submitted via 

facsimile to (202) 395–5105. 

FOR FURTHER INFORMATION CONTACT: 

David J. Capitano, Cost Accounting 

Standards Board (telephone: 703–847–

7486). 

SUPPLEMENTARY INFORMATION: 

A. Background 

Analysis of Statutory AcquisitionRelated Thresholds 

Section 807 provides for adjustment 

every 5 years of acquisition-related 

thresholds, except for thresholds set by 

the Davis-Bacon Act, Service Contract 

Act, and trade agreements. The statute 

requires that the adjustment be based on 

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 subject to 5 years of 

inflation. For purposes of this proposed 

rule, the calculation of escalation is 

based on the CPI from December 1999 

to December 2004 (the most recent 

available data), which currently 

computes at 1.1307, as determined by 

the Federal Acquisition Regulatory 

(FAR) Council. 

Once the escalation factor is applied 

to the acquisition-related threshold, the 

law requires rounding of the calculated 

threshold as follows: 

< $10,000 ...................... Nearest $500 

$10,000–<$100,000 ...... Nearest $5,000 

$100,000–<$1,000,000 Nearest $50,000 

$1,000,000 or more ...... Nearest $500,000 

Applying the 1.1307 factor and the 

rounding criteria described above, the 

CAS thresholds have been revised as 

follows: 

(a) For contract applicability, from 

$500,000 to $550,000; 

(b) For applicability to a business 

unit, from $7.5 million to $8.5 million; 

(c) For waiver authority, from $15 

million to $17 million; 

(d) For full coverage, from $50 million 

to $56.5 million; 

(e) For disclosure statement 

submissions by a company (other than 

educational institutions), from $50 

million to $56.5 million; 

(f) For disclosure statement 

submissions by a segment of a company, 

from $10 million to $11.5 million; and 

(g) For disclosure statement 

submissions by an educational 

institutions, from $25 million to $28.3 

million. 

B. Paperwork Reduction Act 

The Paperwork Reduction Act, Public 

Law 96–511, does not apply to this 

rulemaking, because this rule imposes