a.  Simplified Acquisition Threshold

Comment: Three respondents recommended increasing the proposed threshold for application of the rule from the simplified acquisition threshold to $10 million. One respondent stated that the rule should exempt acquisitions less than $10 million, in order to return the highest level of benefit from the burdens imposed by submission of cost or pricing data and negotiation.

Similarly, another respondent recommended the $10 million threshold in order to focus the requirements on the competitions in which fostering effective competition would have the most beneficial impact to DoD and for which a failure to perform adequate cost or price analysis of single offers could result in the most detriment to DoD.

A third respondent provided the rationale that, especially for procurement of services, for many procurements of less than $10 million associated with re-competes, other contractors determine that based on a cost-benefit analysis, the cost of writing and submitting a proposal exceed the potential benefits associated with the acquisition.

Response: The simplified acquisition threshold is currently $150,000, with higher thresholds for contingency operations or to facilitate the defense against nuclear, biological, chemical, or radiological attack (which are exempt from this rule). Another possible threshold that was considered is the threshold for certified cost or pricing data ($650,000). DoD decided to retain the simplified acquisition threshold as the threshold for application of this rule. It is not to the benefit of DoD to exempt acquisitions up to $10 million from this rule, or even $650,000, especially as the final rule has been revised to eliminate any unnecessary burden. It is important at every dollar value to maximize competition and determine that prices are fair and reasonable. The primary reasons that buys below the simplified acquisition threshold have been exempted from this rule are because--

41 U.S.C. 1901 requires that in order to "promote efficiency and economy in contracting and to avoid unnecessary burdens," the FAR shall provide simplified procedures for acquisitions not greater than the simplified acquisition threshold; and

It is simply not feasible to apply the rule to the huge volume of very low dollar value buys, a large majority of which are conducted electronically.