View Rule

DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement to establish a higher dollar threshold for conducting contractor purchasing system reviews. This rule proposes, in lieu of the threshold at Federal Acquisition Regulation 44.302(a) of $25 million, the administrative contracting officer shall determine the need for a contractors purchasing system review if a contractor’s sales to the Government are expected to exceed $50 million during the next 12 months.

Statement of Need:

There is a need to increase the threshold for a contractor purchasing system review from $25 to $50 million to reduce the administrative burden on contractors and the Government for maintaining and reviewing an approved contractor purchasing system.  

Summary of the Legal Basis:

This rule is proposed under the authority at 41 U.S.C. 1303, Functions and authority, which provides the authority to issue and maintain the Federal Acquisition Regulation and executive agency implementing regulations. 

Alternatives:

No alternatives to this action are being considered at this time.

Anticipated Costs and Benefits:

Implementing this rule provides a net annualized savings of approximately $12 million. This estimate is based on data available in the Federal Procurement Data System (FPDS) data for fiscal year 2016, which indicates that 958 unique vendors received awards valued at $25 million or more, but less than $50 million, that were subject to the purchasing system review. Removing this requirement would relieve these contractors from the time and cost burden required to establish, maintain, audit, document, and train for an approved purchasing system.

Risks:

If this rule is not finalized, the public will continue to experience additional costs to comply with this rule at the current threshold.