Redstone_-_FAR_Dollar_Thresholds_Effective_October_1_2015

Just a follow-up to our July 13, 2015 blog and a reminder that effective October 1, 2015 a number of FAR dollar-thresholds will be updated in accordance with 41 U.S.C. Section 1908, which requires the inflation adjustment of dollar thresholds every five years. The upcoming changes were posted in July within Federal Register Vol. 80 No. 127; however, the impact of these changes is minimal with most commonly used dollar thresholds being increased around 6-7%. A detailed list of the most frequently used thresholds and their changes are noted below.

  • The micro-purchase base threshold of $3,000 (FAR 2.101) is increased to $3,500.
  • The simplified acquisition threshold (FAR 2.101) of $150,000 is unchanged.
  • The FedBizOpps pre-award and post-award notices (FAR part 5) remain at $25,000 because of trade agreements.
  • The threshold for use of simplified acquisition procedures for acquisition of commercial items (FAR 13.500) is raised from $6.5 million to $7 million.
  • The cost or pricing data threshold (FAR 15.403–4) and the statutorily equivalent Cost Accounting Standard threshold are raised from $700,000 to $750,000.
  • The prime contractor subcontracting plan (FAR 19.702) floor is raised from $650,000 to $700,000, and the construction threshold of $1,500,000 stays the same.
  • The threshold for reporting first-tier subcontract information including executive compensation will increase from $25,000 to $30,000 (FAR subpart 4.14 and section 52.204-10)

Now would be a great time to revise your purchasing, estimating and accounting procedures to reflect these new dollar thresholds in order to ensure your policies and procedures are up to date with this and other regulatory changes from the past government fiscal year. Contractors should also plan to revise their standard form subcontract and supplier agreements to reflect the new dollar thresholds. At Redstone GCI we draft, review and provide guidance to hundreds of contractors on policy and procedures pertaining to government business systems, and understand the struggle of constantly staying on top of regulatory changes. Let us know if we can help.

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Written by Redstone Team

About Redstone GCI

Redstone GCI is a consulting firm focused on fulfilling the needs of government contractors in all areas of compliance. With a singular mission to help contractors through the multiple layers of “red tape,” we allow contractors to focus on what they do best – support their mission with the U.S. Government. We are home to a group of consultants made up of GovCon industry professionals, CPAs, attorneys, and retired government audit and acquisition professionals.

Our focus and knowledge of audit and compliance functions administered by DCAA and DCMA will always be at the heart of what we do. However, for the past decade, we’ve strategically grown to support other areas of the government contractor back-office with that same level of focus and expertise. We’ve added expertise in contracts management, subcontract administration, proposal pricing, various software systems, HR and employment law, property administration, manufacturing, data analytics/reporting, Grant specialists, M&A, and many other areas. When we see a trend in the needs of contractors, we act to ensure we can provide the best expertise in the market to fulfill those needs.

One thing our clients can be certain of is that with the Redstone GCI Team in your corner, there is no problem too big and no issue too technical for our team to tackle.

Topics: DFARS Business Systems, Federal Acquisition Regulation (FAR)