FAR Changes to Implement Adjustments to Acquisition-Related Thresholds


Effective October 1, 2015, one final rule amends the FAR to implement inflation adjustments to acquisition-related thresholds. Changes include:

  • The micropurchase threshold of $3,000 is increased to $3,500.
  • The commercial items test program ceiling is increased from $6.5 million to $7 million.
  • The cost or pricing data threshold is increased from $700,000 to $750,000.
  • The prime contractor subcontracting plan floor is increased from $650,000 to $700,000, while the construction threshold remains at $1.5 million.
  • The threshold for reporting first-tier subcontract information, including executive compensation, is increased from $25,000 to $30,000.
  • The cost or pricing data threshold and Cost Accounting Standard threshold are raised from $700,000 to $750,000.

The simplified acquisition threshold of $150,000 is unchanged, as are FedBizOpps preaward and postaward notices, which remain at $25,000. A proposed rule published November 25, 2014, is adopted without change. However, some final thresholds are lower due to a lower rate of inflation than projected at the time the proposed rule was published.


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The scarcest resource in government contracting


This is the time of year for grand plans, resolutions, and strategy. An opportunity to lay out your year, set your course for some big goals, and… bury yourself in email, get overwhelmed by FBO notices, stay up til midnight answering data calls. And in December you’ll wonder where the year went, again.

So this article isn’t about market research strategies or secrets of getting ‘in’ with the Tier I prime contractor, not exactly.  Instead, let’s talk about one resource of tremendous value – and how you need to use it wisely to ensure that your government procurement pursuits are a good investment, instead of a throwaway lottery ticket.

1. YOUR time.

Is your company effectively pursuing the opportunities that you are uniquely suited to win?  Or are you chasing everything in your NAICS code?  Somewhere in between? Here’s how you can make your business development more effective:

  • Develop your “Unique Value Proposition”, also known as a differentiator.  What does your company do that no one else does?  If your reply is ‘cheap, fast, good customer service’ – start over, those are not differentiators, those are common denominators, because everyone expects that you will deliver at a good price, on time, and with good customer service.  Your uniqueness can be in the way you do business, in proprietary processes, in your team or experience, and even in your knowledge of your customer’s industry.  If there isn’t a niche, create one! That will make you appear that much more unique, and relevant.
  • Get to know your customers.  Meet with potential clients, teaming partners, and primes.  No one buys from strangers, not when they are spending large amounts of highly visible taxpayer dollars.  The point of the competitive and methodical acquisitions process is to lower the government’s risk with every buy.  Awarding a contract to a company they’ve never heard of before is a high-risk proposition.  Sure, they can call on references; they can check past performance.  But if there are bidders in the mix with similar proposals that have more familiarity, they will win most of the time. This isn’t nepotism, this isn’t unfair. It’s prudent.  What’s stopping you from identifying your buyers, talking to them at conferences, participating in their LinkedIn groups, sending them an email, asking for a meeting?
  • Develop the right opportunities. If the work you seek is not coming out on FBO, that does not mean you just respond to whatever *is* being posted.   This is where knowing your buyer starts to pay off. Once there is a relationship, you have an opportunity to find out how they buy the products and services that you are selling. Maybe it’s through Simplified Acquisitions. Perhaps it’s through GSA Schedules. Or reverse auctions. Or BPAs… all perfectly legitimate procurement avenues, none of which will appear on FBO. So if that’s the only place you’re looking, you’re missing out.

2. Your TEAMMATE’s time

Everyone wants to land a big teaming partner, because they will pave the way, they will “give you” some work. Why should they?  Don’t attempt to lecture the large primes that they have subcontracting goals to fulfill. In fact, starting a pitch by listing all your socio-economic set-asides is a deal killer.  Your partners want to know how you will help them. They can find other small, women-owned, veteran-owned 8(a) businesses in HUBZones. They haven’t had much trouble meeting their subcontracting goals in the past.  Focus on how you can benefit them – by customer knowledge? Unique expertise? Lower cost? (be careful of being the cheap one! You may get stuck there!)  Consider also pursuing the smaller whales: Tier II, Tier III companies, who are still large enough to have subcontracting goals, but aren’t as well known – therefore have a smaller pool of potential subcontractors. They are also less likely to have all the resources that they need in-house, and thus more lilkely to rely on subcontractors to help augment their offering, in addition to just meeting the subcontracting goals (or lowering their overhead).

3. Your CUSTOMER’s time

Practice your elevator pitch and do your homework.

Your customer doesn’t want to spend their time answering questions you should’ve figured out by looking at their website and strategic plan and acquisition forecast.  Nor do they want to sit through a 15-slide presentation on your resume or capabilities statement.  They want to know how you can help them meet a need they have.  Your face time with potential customers is best spent ‘digging in’ – asking in-depth questions about the projects and programs you are interested in; finding out how they buy; determining if there is a budget; and understanding how you can help them meet their mission and make their lives easier.

4. Your COUNSELOR’s or CONSULTANT’s time

There is help out there for you.  Procurement Technical Assistance Centers are funded by the Department of Defense and local universities nationwide to provide help and guidance to government contracting.  We review capabilities statements, help you with market research, assist in certifications, review proposals and prices, and teach classes on topics from the basics to legal/teaming to ISO certification.  Our counseling is free, and all our training classes are inexpensive.  However, we do expect that you do your homework, show up on time, and invest as much time in moving your business forward.

There are also many reputable consultants in the industry who are terrific resources.  They expect that you take your business and their time seriously, that you know your financials, can succinctly describe your differentiators, and articulate your business goals.

Government contracting isn’t a business pursuit many fall into; in fact, it is a long, patient road that you need to consider carefully, as you will be on it for a while if you want to see success.  Be ready to invest your time, the right amount of resources, and a fair amount of work if you want to succeed.  And we’ll help along the way.

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ICI LLC gets SDVOSB certification renewed


ICI LLC, an S-Corporation, based in Chantilly, Virginia, was established in June 2010 as Service Disabled Veteran Owned Small Business (SDVOSB), and received the Department of Veterans Affairs verification in July 2011.  ICI LLC provides technical and scientific management services and is committed to delivering a high quality service to clients consistent with ISO-9001, ISO-14000 and ISO-21500 standards. During spring of 2015, the company applied for re-verification for SDVOSB certification with the Veterans Administration, Center for Verification and Evaluation (CVE). Anticipating a smooth renewal because ICI had not undergone any changes in ownership or management since the original approval, the owners were surprised to learn that during SDVOSB re-verification, CVE determined there was not a clear determination who had control or authority to amend the company’s Operating Agreement. While working to amend the paperwork, ICI’s certification expired! This development put new contract awards at risk – and ICI and was now under a tight deadline to respond with the amendments.

After speaking with Virginia PTAC staff at the about the CVE concerns, Daniel Kirkpatrick, Service Disabled Veteran and Owner of ICI LLC attended a fortuitously-timed CVE Certification workshop taught by director Anna Urman to get a better understanding of the process. Daniel proposed a paragraph rewrite and requested assistance for a sanity check on wording and insertion. Virginia PTAC’s recommendation and vote of confidence was beneficial in a developing a revised operating agreement that met CVE’s requirements. One week after resubmission, ICI LLC received a re-verification letter with a renewed SDVOSB status. The time and assistance provided by the Virginia PTAC team at GMU was greatly appreciated as Daniel continues to pursue new contracts and can rest easy with a re-verified SDVOSB status that doesn’t expire again until June 2017.

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