What's one thing to be thankful for this year? That on Friday, 11/29/2024, FAR Case 2024-001 Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds will be published as a proposed rule. These inflationary increases are part of a review done every five years for statutory acquisition-related thresholds. (The proposed rule gets into the methodology; I won't bore you here.)
Many thresholds in FAR are impacted but many are not. For example, thresholds related to the Service Contract Labor Standards (SCLS) and the Construction Wage Rate Requirements (CWRR), bonding levels, and trade agreements are exempt from inflationary increases.
That's not to say there isn't some GOOD NEWS here. I'm highlighting a few below. You'll want to check out the full proposed rule for all the "deets" at https://lnkd.in/gBfDjYCa.
✅ Micro-Purchase Threshold (MPT) -- proposed increase from $10,000 to $15,000. Per the analysis provided in the rule, this brings another 49,000+ awards into the MPT sphere that can be made with the purchase card, based on FY2022 to FY2024 numbers. Increases are also proposed for the MPT in other situations like contingency operations and emergency response situations, among others. (FAR 2.101)
(Shauna's Two-Cents: This is the ⬆️ I've been telling folks to expect despite a House memo recommending $25,000. That increase wasn't realistic given that over $15K other statutory thresholds kick in for clauses and flow downs to subcontractors and suppliers. Adding clauses to p-card buys isn't something to wish on ourselves. Let's keep this streamlined process efficient for now, shall we?)
✅ Simplified Acquisition Threshold (SAT) -- proposed increase from $250,000 to $350,000. Between the MPT and the SAT is where awards are reserved for only small businesses (unless otherwise justified in writing). Per the rule's analysis, up to 5,000+ more contracts would now be available to only small businesses. When looking at that number in dollars, the increase is roughly 2%. Similar increases are proposed for contingency operations, emergency response, and humanitarian / peacekeeping operations. (FAR 2.101)
✅ 8(a) Limitation on Competition Threshold -- proposed increase from $25M to $30M (FAR 6.204) -- GREAT NEWS for 8(a)s!
✅ Threshold for Justifications of Single-Award Indefinite-Delivery Contracts (IDCs) -- proposed increase from $100M to $150M. (FAR 16.504(c))
✅ Sole Source Orders and Awards -- proposed increases from $7M to $8.5M for manufacturing NAICS and $4.5M to $5.5M for all other acquisitions for 8(a), HUBZone, SDVOSBs, and WOSBs. (See FAR 19 in the rule.)
Subcontracting plan thresholds for large businesses will jump from $750,000 to $950,000, with an increase from $1.5M to $2M for construction contracts.
Public comments are due by January 28, 2025. The effective date for thresholds is 10/1/2025 (the start of FY2026).
Happy Thanksgiving! 🦃
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