Acquisition Changes by The National Defense Authorization Acts (2017-2019)

The acquisition thresholds and simplified procedures for contracts under the simplified acquisition threshold (SAT) affect not only the dollar value of contract actions reserved for small business, but also the applicable contract requirements.  The NDAAs for 2017-2019 made changes to the threshold amounts and other contract requirements:

The NDAA for 2017 (Sec. 821) increased the DoD micro-purchase threshold (MPT) to $5,000.

The NDAA for 2018 (Sec. 805) increased the SAT for all agencies to $250,000, and (Sec. 806) increased the MPT for civilian agencies to $10,000.

The NDAA for 2019 (Sec. 821) increased the DoD MPT to $10,000.

FAR Case 2018-004 addresses the implementation of the new thresholds in the FAR.  Prior to amending the FAR, the new thresholds are authorized for use in new contracts.  CAAC Letter 2018-02 (civilian agencies authorization for Class Deviations, 2/16/18), and DFARS Class Deviation 2018-O0018 incorporated the 2019 DoD MPT increases and the 2018 SAT increases, making them applicable to all DoD contracts effective 8/31/18 and 4/13/18, respectively.  The acquisition thresholds (and their defined amounts) originate by statute (41 U.S.C. 134, 41 U.S.C. 1902(a)(1)), and appear in the FAR definitions (Far 2.101) for use in contracts subject to the FAR, with the current statutory amounts increased for inflation by the FAR Council every five years, as required by 41 U.S.C. 1908(d).  Before the 2018 NDAA increases, the statutory amounts were $3,000 and $100,000 respectively, and the FAR (increased for inflation) amounts were $3,500 and $150,000 respectively.

Other Changes -

The NDAA for 2018 (Sec. 821) amended the language of 41 U.S.C. 1908(d) (which requires publication of the 5 year adjustments to the acquisition related thresholds), adding language which requires also applying the adjusted threshold to existing contracts and subcontracts “without regard to the date of award of the contract or subcontract.”  FAR Case 2018-007 addresses incorporation of this requirement in the FAR. 

The NDAA for 2018 (Sec. 820) amended the definition of a “subcontract” for commercial items in 41 U.S.C. 1906(c)(1) by adding ‘‘The term does not include agreements entered into by a contractor for the supply of commodities that are intended for use in the performance of multiple contracts with the Federal Government and other parties and are not identifiable to any particular contract.’’ FAR Case 2018-006 addresses the change.

The NDAA for 2019 (Sec. 836) amended all statutory references to “commercial items” in all laws and the U.S. Code to provide a consistent definition, which definition then separated commercial services as a subset of commercial items and identified them separately as “commercial products” and “commercial services.”  Sec. 836(h) provided an effective date for the changes to the statutory definitions of January 1, 2020.  The NDAA for 2019 did not change the statutory provisions related to “commercially available off-the-shelf items” (COTS).  The statutory definition of commercial items appears in 41 U.S.C. 103.