Why does the FAR differentiate SAT at $1.5M, contingency? What is the significates of the $1.5M?
A: The $1.5M simplified acquisition threshold (SAT) for contingencies is in the case of a contract to be awarded and performed, or purchase to be made, outside the United States ($750,000 in the United States). Specifically this SAT is applicable for acquisitions of supplies or services that, as determined by the head of the agency, are to be used to support a contingency operation or to facilitate defense against or recovery from nuclear, biological, chemical, or radiological attack (41 U.S.C. 1903).
Per the Defense Contingency Contracting Handbook: Declared contingency. The formal declaration of a contingency operation is very significant for the CCO Contingency Contracting Officers (CCOs), triggering an increase in the micro-purchase threshold and SAT, as designated in FAR 2.101.
When supporting operations in response to one of these scenarios, CCOs must be familiar with the emergency acquisition flexibilities in FAR part 18 and DFARS part 218. These flexibilities are specific techniques or procedures that may be used to streamline the standard acquisition process. The increase threshold when supporting emergency operations is one of these flexibilities.
FAR 2.101 -- Definitions.
FAR 18.201 -- Contingency Operation.
DFARS 218.201 Contingency operation.
Defense Contingency Contracting Handbook, Version 5
Contingency Contracting and Emergency Acquisition
Simplified Acquisition Procedures (SAP)
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