Statutory acquisition–related dollar thresholds-adjustment for inflation
FAR 1.109 requires the FAR Council to adjust statutory acquisition-related dollar thresholds for inflation every five years, ensuring current thresholds apply to all contracts and subcontracts except for specific exclusions.
Overview
FAR 1.109 establishes the process for adjusting statutory acquisition-related dollar thresholds in the FAR to account for inflation, as mandated by 41 U.S.C. 1908. The FAR Council is required to review and adjust these thresholds every five years, using the Consumer Price Index for All Urban Consumers (CPI-U), starting from October 2005. These adjustments override any other legal provisions for threshold adjustments, except for specific exclusions listed in the regulation. The section also clarifies which thresholds are excluded from this process and provides guidance on the applicability of adjusted thresholds to contracts and subcontracts, regardless of their award date. A matrix of the most recent adjustments is available online for reference.
Key Rules
- Periodic Adjustment Requirement
- The FAR Council must adjust all statutory acquisition-related dollar thresholds for inflation every five years using the CPI-U.
- Definition of Acquisition-Related Thresholds
- Only thresholds specified in law as factors for procurement policy applicability are subject to adjustment, as determined by the FAR Council.
- Exclusions from Adjustment
- Certain thresholds, such as those related to bonds, wage rate requirements, service contract labor standards, and trade agreements, are not subject to inflation adjustment under this section.
- Applicability of Adjusted Thresholds
- Adjusted thresholds apply to all contracts and subcontracts, regardless of award date, for the remainder of the contract term unless further adjusted.
- Public Access to Adjustments
- The latest adjustment calculations are published online for public access.
Responsibilities
- Contracting Officers: Must apply the most current statutory thresholds as adjusted for inflation, except for excluded categories.
- Contractors: Should be aware of and comply with the current thresholds as they may affect contract applicability and requirements.
- Agencies: Ensure oversight and implementation of updated thresholds and maintain awareness of exclusions.
Practical Implications
- This section ensures that acquisition-related thresholds remain current with inflation, impacting eligibility, requirements, and compliance for contracts and subcontracts. Contractors and contracting officers must stay updated on threshold changes, as they can affect contract terms and obligations. Exclusions must be carefully observed to avoid misapplication. Failure to use the correct thresholds can result in compliance issues or disputes.