Federal Acquisition Regulation; Micro-Purchase Procedures AGENCIES: Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

DEPARTMENT OF DEFENSE

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 1, 3, 4, 13 and 25

[FAC 90-24, FAR Case 94-771, Item II]

RIN 9000-AG26

Federal Acquisition Regulation; Micro-Purchase Procedures

AGENCIES: Department of Defense (DOD), General Services Administration

(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Interim rule with request for comment.

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SUMMARY: The Department of Defense, General Services Administration,

and the National Aeronautics and Space Administration have agreed to an

interim rule to implement the new micro-purchase requirements of the

Federal Acquisition Streamlining Act of 1994 (the Act). This regulatory

action was not subject to Office of Management and Budget review under

Executive Order 12866, dated September 30, 1993.

DATES: Effective Date: December 15, 1994.

Comment Date: Comments should be submitted to the FAR Secretariat

at the address shown below on or before February 13, 1995 to be

considered in the formulation of a final rule.

ADDRESSES: Interested parties should submit written comments to:

General Services Administration, FAR Secretariat (VRS), 18th & F

Streets, NW, Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405.

Please cite FAC 90-24, FAR case 94-771 in all correspondence related to

this case.

FOR FURTHER INFORMATION CONTACT: Ms. Diana Maykowskyj, the team leader

of the Simplified Acquisition Procedures/FACNET Team, at (703) 274-6307

in reference to this FAR case. For general information, contact the FAR

Secretariat, Room 4037, GS Building, Washington, DC 20405 (202) 501-

4755. Please cite FAC 90-24, FAR case 94-771.

SUPPLEMENTARY INFORMATION:

A. Background

The Act, Pub. L. 103-355, provides the authority to streamline the

acquisition process and minimize burdensome requirements unique to the

Federal Government. Major changes that can be expected in the

acquisition process as a result of the Act's implementation include

changes in the areas of Commercial Item Acquisition, Simplified

Acquisition Procedures, the Truth in Negotiations Act, and introduction

of the Federal Acquisition Computer Network (FACNET).

This notice announces FAR revisions developed under FAR case 94-

771. This interim rule implements the micro-purchase requirements of

Pub. L. 103-355. The term ``micro-purchase'' is coined and defined by

Pub. L. 103-355. Pub. L. 103-355 establishes the micro-purchase

threshold at $2,500 and exempts purchases not exceeding the micro-

purchase threshold from the Buy American Act and certain small business

requirements. It is noted that construction requirements are limited to

$2,000 under the FAR 13.101 definition for micro-purchase to

accommodate the Davis-Bacon Act requirements under Subpart 22.4. FAR

13.105(a) has been amended to exempt micro-purchases from the

requirement for small business set-asides. A more extensive revision to

13.105 will be included in implementation of the full requirements of

Pub. L. 103-355 pertaining to acquisitions not exceeding the simplified

acquisition threshold. For micro-purchases, Pub. L. 103-355 requires

competition only if prices are not considered reasonable. This rule

provides for expanded use of the governmentwide commercial purchase

card to take maximum advantage of the micro-purchase authority provided

in Pub. L. 103-355 by delegating the authority, to the maximum extent

practicable, to individuals in the offices that will be using the

supplies or services to be purchased. Your attention is directed to the

provisions at FAR 13.601(d) which indicates that such individuals are

considered ``contracting officers'' within the meaning of FAR 2.101.

The individuals, generally non-acquisition personnel, may be appointed

under delegations of procurement authority in accordance with agency

procedures.

The FAR Council is interested in an exchange of ideas and opinions

with respect to the regulatory implementation of the Act. For that

reason, the FAR Council is conducting a series of public meetings.

However, the FAR Council has not scheduled a public meeting on this

rule (FAR case 94-771) because of the clarifying and non-controversial

nature of the rule. If the public believes such a meeting is needed

with respect to this rule, a letter requesting a public meeting and

outlining the nature of the requested meeting shall be submitted to and

received by the FAR Secretariat (see ADDRESSES caption, above) on or

before January 17, 1995. The FAR Council will consider such requests in

determining whether a public meeting on this rule should be scheduled.

B. Regulatory Flexibility Act

The changes may have a significant economic impact on a substantial

number of small entities within the meaning of the Regulatory

Flexibility Act, 5 U.S.C. 601 et seq., because it implements the

portion of the Act which eliminates the small business setaside for

purchases not exceeding the micro-purchase threshold. However, full

implementation of the Federal Acquisition Streamlining Act of 1994 will

require that all actions exceeding the micro-purchase threshold but not

exceeding the simplified acquisition threshold, $100,000, be set aside

for small businesses. This will be an increase from the current

requirement that all acquisitions less than $25,000 be set aside for

small businesses. An Initial Regulatory Flexibility Analysis (IRFA) has

been prepared and will be provided to the Chief Counsel for Advocacy

for the Small Business Administration. A copy of the IRFA may be

obtained from the FAR Secretariat. Comments are invited. Comments from

small entities concerning the affected FAR subpart will be considered

in accordance with 5 U.S.C. 610. Such comments must be submitted

separately and cite 5 U.S.C 601, et seq. (FAR Case 94-771), in

correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act does not apply because the changes to

the FAR do not impose recordkeeping or information collection

requirements, or collection of information from offerors, contractors,

or members of the public which require the approval of OMB under 44

U.S.C. 3501, et seq.

D. Determination To Issue an Interim Rule

A determination has been made under the authority of the Secretary

of Defense (DOD), the Administrator of General Services (GSA), and the

Administrator of the National Aeronautics and Space Administration

(NASA) that compelling reasons exist to promulgate this interim rule

without prior opportunity for public comment. This action is necessary

because the Federal Acquisition Streamlining Act of 1994 requires

implementation of the micro- purchase portion of the Act within 60 days

of enactment. However, pursuant to Public Law 98-577 and FAR 1.501,

public comments received in response to this interim rule will be

considered in the formation of the final rule.

List of Subjects in 48 CFR Parts 1, 3, 4, 13 and 25

Government procurement.

Dated: December 8, 1994.

Edward Loeb,

Deputy Project Manager for the Implementation of the Federal

Acquisition Streamlining Act of 1994.

Therefore, 48 CFR Parts 1, 3, 4, 13 and 25 are amended as set forth

below:

1. The authority citation for 48 CFR Parts 1, 3, 4, 13 and 25

continues to read as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42

U.S.C. 2473(c).

PART 1--FEDERAL ACQUISITION REGULATIONS SYSTEM

2. Section 1.603-3 is revised to read as follows:

1.603-3 Appointment.

Contracting officers whose authority will be limited to micro-

purchases (see subpart 13.6) shall be appointed in writing in

accordance with agency procedures. Other contracting officers shall be

appointed in writing on a ``Certificate of Appointment'', SF 1402,

which shall state any limitation on the scope of authority to be

exercised, other than limitations contained in applicable law or

regulation. Appointing officials shall maintain files containing copies

of all Certificates of Appointment that have not been terminated.

PART 3--IMPROPER BUSINESS PRACTICES AND PERSONAL CONFLICTS OF

INTEREST

3. Section 3.104-4 is amended by adding paragraph (h)(5) to read as

follows:

3.104-4 Definitions.

* * * * *

(h) * * *

(5) For purposes of 3.104-4(h) the term procurement official does

not include contracting officers if their contracting authority is

limited to the micro-purchase threshold (see 13.101) and the head of

the contracting activity determines that it is unlikely that the

individual will conduct acquisitions in a total amount greater than

$20,000 in any 12-month period.

* * * * *

PART 4--ADMINISTRATIVE MATTERS

4.800 [Amended]

4. Section 4.800 is amended by revising the reference ``13.106(c)''

to ``13.106(b)''.

PART 13--SMALL PURCHASE AND OTHER SIMPLIFIED PURCHASE PROCEDURES

5. Section 13.101 is amended by adding the following definitions in

alphabetical order to read as follows:

13.101 Definitions.

* * * * *

Governmentwide commercial purchase card means a purchase card,

similar in nature to a commercial credit card, issued to authorized

agency officials for their use in acquiring supplies and services.

Micro-purchase means an acquisition of supplies or services (except

construction), the aggregate amount of which does not exceed $2,500.

Micro-purchases for construction are limited to $2,000.

Micro-purchase threshold means $2,500.

* * * * *

6. Section 13.105 is amended by revising paragraph (a); in (d)(3)

by removing ``(see 13.106(c))'' and inserting ``(see 13.106(b))'' in

its place, and in (d)(4) by removing ``(see 13.106(b)(4))'' and

inserting ``(see 13.106(a)(4))''. The revised text reads as follows:

13.105 Small business--small purchase set-asides.

(a) Except as provided in paragraphs (b), (c), and (d) of this

section, each acquisition of supplies or services that has an

anticipated dollar value exceeding $2,500, but not exceeding $25,000,

and is subject to small purchase procedures, shall be reserved

exclusively for small business concerns. This shall be accomplished by

using the category of set-asides established by Pub. L. 95-507,

specifically for small purchases, identified as small business--small

purchase set-asides established by Section 15(j) of the Small Business

Act (15 U.S.C. 644(j)) (see Pub. L. 95-507).

* * * * *

13.106 [Amended]

6. Section 13.106 is amended by removing paragraph (a) and

redesignating paragraphs (b) and (c) as (a) and (b), respectively.

13.502 [Amended]

7. Section 13.502(c) is amended in the last sentence by removing

``(see 13.106(c))'' and inserting ``(see 13.106(b))'' in its place.

8. Part 13 is amended by adding Subpart 13.6 to read as follows:

Subpart 13.6--Micro-Purchase

Sec.

13.601 General.

13.602 Policy.

13.603 Soliciting competition, evaluation of quotes, and award.

Subpart 13.6--Micro-Purchase

13.601 General.

(a) This subpart applies to purchases of supplies or services

(except for construction) at or below the micro-purchase threshold.

Micro-purchases for construction are limited to $2,000.

(b) Micro-purchases may be awarded using any of the purchasing

methods covered by part 13.

(c) Agencies are encouraged to use the governmentwide commercial

purchase card and electronic purchasing techniques, to the maximum

extent practicable. The governmentwide commercial purchase card may be

used to purchase and pay for micro-purchases in accordance with agency

procedures. This is not intended to limit use of the purchase card to

micro-purchases, if otherwise authorized under agency procedures.

(d) Agency heads are encouraged to delegate micro-purchase

authority to individuals who will be using the supplies or services

being purchased (see 1.603-3). Individuals delegated this authority are

contracting officers within the meaning of 2.101. See 3.104-4(h)(5) for

procurement integrity requirements.

13.602 Policy.

(a) Contracting officers shall comply with the requirements of part

8, Required Sources of Supplies and Services.

(b) Micro-purchases shall be distributed equitably among qualified

suppliers.

(c) Requirements aggregating more than the micro-purchase threshold

shall not be broken down into several purchases that are less than the

threshold merely to permit purchase under this subpart.

13.603 Soliciting competition, evaluation of quotes, and award.

(a) Micro-purchases may be awarded without soliciting competitive

quotations if the contracting officer determines that the price is

reasonable.

(b) The administrative cost of verifying the reasonableness of the

price for purchases at or below the micro-purchase threshold may more

than offset potential savings from detecting instances of overpricing.

Therefore, action to verify price reasonableness need only be taken

if--

(1) The contracting officer suspects or has information to indicate

that the price may not be reasonable (e.g., comparison to the previous

price paid or personal knowledge of the supply or service); or

(2) Purchasing a supply or service for which no comparable pricing

information is readily available (e.g., a supply or service that is not

the same as, or is not similar to, other supplies or services that have

recently been purchased on a competitive basis).

(c) Prompt payment discounts should be solicited.

PART 25--FOREIGN ACQUISITION

9. Section 25.100 is revised to read as follows:

25.100 Scope of subpart.

This subpart implements the Buy American Act (41 U.S.C. 10) and

Executive Order 10582, December 17, 1954 (as amended). It applies to

(a) supply contracts exceeding the micro-purchase threshold; and (b)

contracts for services that involve the furnishing of supplies when the

supply portion of the contract exceeds the micro-purchase threshold.

[FR Doc. 94-30605 Filed 12-13-94; 10:45 am]

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