Increased Statutory Acquisition Thresholds

On October 2, 2019, the acquisition councils issued a Proposed Rule (PR) to amend the FAR for statutory increases to the Simplified Acquisition Threshold (SAT) and Micro-Purchase Threshold (see Pillar’s blog). The PR estimates that the increase to the SAT will result in an additional $450 million in federal contracts falling below the SAT (about 10% of total federal contracts). The PR also changes the coverage threshold for E-Verify (see PR, referencing FAR 22.1803) from the “Simplified Acquisition Threshold” to a fixed dollar amount (equal to the existing FAR defined SAT, $150,000) thereby not exempting contracts between $150,000 and $250,000 from E-Verify. The PR does not provide a reason for the change nor provide cost estimates for changing the coverage threshold definition, and thereby not exempting certain contracts (the cost savings estimates in the PR only include those associated with bid preparation, not compliance, and for compliance costs, E-Verify is not insignificant). Note that EO 13465 authorizes the acquisition councils to set the coverage threshold, which they did in 2008 as the SAT not a dollar amount (E-Verify Final Rule), and when increasing the SAT for inflation in 2010, did not change the EO 13465 coverage threshold to a fixed dollar amount equal to the then existing FAR defined SAT. They appear to be doing that now, without explanation. Pillar submitted a comment to the GSA about the change, and comments may be made before December 2nd, through a link on the page with the PR (linked above).