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    Why does the FAR not match the U.S.C. in this instance? It seems there is a difference between these two thresholds and I do not understand that difference. Thanks!


    Answer

    1. The references quoted below in pertinent part are applicable to this response.

    A. 10 U.S.C. § 2306a. Cost or pricing data: truth in negotiations

    (a) REQUIRED COST OR PRICING DATA AND CERTIFICATION.—
      (1) The head of an agency shall require offerors, contractors, and subcontractors to make cost or pricing data available as follows: (A) An offeror for a prime contract under this chapter to be entered into using procedures other than sealed-bid procedures shall be required to submit cost or pricing data before the award of a contract if— (i) in the case of a prime contract entered into after December 5, 1990, the price of the contract to the United States is expected to exceed $500,000;

      (7) Effective on October 1 of each year that is divisible by 5, each amount set forth in paragraph (1) shall be adjusted to the amount that is equal to the fiscal year 1994 constant dollar value of the amount set forth. Any amount, as so adjusted, that is not evenly divisible by $50,000 shall be rounded to the nearest multiple of $50,000. In the case of an amount that is evenly divisible by $25,000 but not evenly divisible by $50,000, the amount shall be rounded to the next higher multiple of $50,000.

    B. Federal Acquisition Circulars (FACs) amending FAR 15.403-4

    (1) FAC 97-20, October 11, 2000
    http://farsite.hill.af.mil/reghtml/changes/fac/fac97_20.htm

    Item II--Truth in Negotiations Act Threshold (FAR Case 2000-300)
    Effective date: October 3, 2000

    This final rule amends FAR 15.403-4 to increase the threshold for obtaining cost or pricing data from $500,000 to $550,000. This implements the requirements of 10 U.S.C. 2306a(a)(7) and 41 U.S.C. 254b(a)(7). These statutes require review of the Truth in Negotiations Act threshold every 5 years, starting October 1, 1995.

    (2) FAC 2005-13, September 28, 2006
    http://farsite.hill.af.mil/reghtml/changes/fac/fac2005-13.htm

    Item IV--Inflation Adjustment of Acquisition-Related Thresholds (FAR Case 2004-033)
    Effective Date: September 28, 2006

    This final rule adjusts acquisition-related thresholds in the FAR for inflation. It implements Section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (Pub. L. 108-375). Section 807 provides for adjustment every 5 years of acquisition-related thresholds, … .
      - The cost and pricing data threshold (FAR 15.403-4) will be raised from $550,000 to $650,000.

    (3) FAC 2005-45, August 30, 2010
    http://farsite.hill.af.mil/reghtml/changes/fac/fac2005-45.htm

    Item I--Inflation Adjustment of Acquisition-Related Thresholds (FAR Case 2008-024)
    Effective Date: October 1, 2010.

    This final rule amends the FAR to implement section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005. Section 807 requires an adjustment every 5 years of acquisition-related thresholds for inflation using the Consumer Price Index for all urban consumers … .
      - The cost or pricing data threshold (FAR 15.403-4) is raised from $650,000 to $700,000.

    2. As stated in Reference 1.A. above, subsection (7) of 10 U.S.C. § 2306a provides for a mandatory inflation adjustment to the $500,000 threshold for obtaining certified cost or pricing data every five years in $50,000 increments. The $500,000 amount specified in subsection (1) of 10 U.S.C. § 2306a represents the initial statutory baseline from which all subsequent inflation adjustments to this threshold would be calculated. Consequently, this amount does not change as inflation adjustments are made to the threshold amount as set forth in FAR 15.403-4.

    3. As indicated in reference 1.B.(1) above, the first inflation adjustment to this threshold in FAR 15.403-4 from $500,000 to $550,000 was made under the direct authority of 10 U.S.C. § 2306a(7) by FAC 97-20. As indicated in reference 1.B.(2) above, the next 5-year inflation adjustment to this threshold in FAR 15.403-4 from $550,000 to $650,000 was made under the authority of Section 807 of Pub. L. 108-375 by FAC 2005-13. Finally, as indicated in reference 1.B.(3) above, the last 5-year inflation adjustment to this threshold in FAR 15.403-4 from $650,000 to the current amount of $700,000 was made under the authority of Section 807 of Pub. L. 108-375 by FAC 2005-45.


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