Government Contracts Federal Acquisition Circular’s Three Final Rules Amend the FAR
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Monday, July 26, 2021

Federal Acquisition Circular’s Three Final Rules Amend the FAR

By Government Contracts Editorial Staff

The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council have issued Federal Acquisition Circular 2021-06, which contains three final rules amending the Federal Acquisition Regulation, including FAR Case 2019-001, Analysis for Equipment Acquisitions, and FAR Case 2020-04, Application of Micro-purchase Threshold to Task and Delivery Orders.

Equipment Costs. The FAR Case 2019-001 final rule implements section 555 of the FAA Reauthorization Act of 2018 (PL 115-254), which requires agencies to conduct, when acquiring equipment, an analysis of cost and other factors associated with certain acquisition methods. The rule amends FAR 7.400 through FAR 7.404 to provide guidance when acquiring equipment and more than one method of acquisition is available for use. The rule requires agencies to conduct a case-by-case analysis of comparative costs. The comparison of acquisition methods in the analysis must include purchases, short-term rentals or leases, long-term rentals or leases, interagency acquisitions, and acquisition agreements with state or local governments. The rule also adds factors to evaluate various acquisition methods, including the estimated length of the period the equipment is to be used and the extent of use within that period; financial and operating advantages of alternative types and makes of equipment; cumulative rent, lease, or other periodic payments; net purchase price; transportation, installation, and storage costs; maintenance, repair, and other service costs; and potential obsolescence due to imminent technological improvements. The amendments also include additional factors to consider, as appropriate, depending on the type, cost, complexity, and estimated period of use of the equipment. These changes apply to both the initial acquisition of equipment and the renewal or extension of existing equipment leases or rental agreements.

Micro-Purchases. The final rule in FAR Case 2020-04 raises the fair opportunity threshold for certain task and delivery orders. The rule implements section 826 of the National Defense Authorization Act for Fiscal Year 2020 (PL 116-92), which increased the $2,500 threshold for requiring fair opportunity on orders under multiple-award contracts to the “micro-purchase threshold.” Accordingly, the rule revises the FAR 16.505(b)(1) fair opportunity to compete threshold to the “micro-purchase threshold.” The FAR 16.505(b)(1) threshold is currently $3,500 due to inflation adjustments under FAR 1.109. The FAR 16.505(b)(1) threshold applies to orders over the threshold, unless an exception at FAR 16.505(b)(2) applies. The amendments apply the word-based threshold to ensure continued alignment with any future threshold changes. The rule does not prohibit a contracting officer from providing fair opportunity to an awardee at or below the micro-purchase threshold.

Editorial Changes. The third final rule makes technical amendments to implement needed editorial changes, including updated URLs, at FAR 11.201, FAR 19.102, FAR 19.201, FAR 19.702, FAR 19.812, FAR 22.805, FAR 26.201, FAR 42.203, FAR 52.211-2, FAR 52.212-1, FAR 52.212-5, FAR 52.213-4, FAR 52.222-8, FAR 52.244-6, and FAR 53.236-2. The FAC also includes a Small Entity Compliance Guide, which was prepared in accordance with section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996. The SECG indicates a regulatory flexibility analysis was prepared for Items I and II. Each rule has a July 12, 2021, effective date. For the text of FAC 2021-06, see ¶70,002.228.

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