We just wanted to bring you up-to-date on some recent and important changes in federal procurement law, changes that may directly affect your business.

Federal Acquisition Circular (FAC) 2001-12, published in late January, sets up an interim rule that revises the Federal Acquisition Regulation (FAR) to implement Sections 852 through 856 and Section 858 of the Homeland Security Act. Those sections increase the amount of the micro-purchase and simplified acquisition thresholds for federal procurements. They also set up streamlined procedures for acquisitions of supplies or services that are to be used to facilitate defense against or recovery from terrorism or nuclear, biological, chemical, or radiological attack.

Here are the main changes:

• Agencies must conduct market research on an ongoing basis to identify (i) the capabilities of small businesses and (ii) new entrants into federal contracting that are available to meet terrorism-related requirements.
  
• The micro-purchase threshold is increased from $2,500 to $7,500 for terrorism-related acquisitions if the award is made before November 24, 2003, and $15,000 for acquisitions by or for DOD if award is made and funds are obligated before September 30, 2003.
  
• The $3,000,000 limitation on sole source 8(a) awards is waived for terrorism-related acquisitions ($5,000,000 for manufacturing). The same is true for sole source HUBZone Awards.
  
• The simplified acquisition threshold for procurements that are carried out in support of a contingency operation or a humanitarian or peacekeeping operation is increased from $100,000 to $200,000.
  
• The simplified acquisition threshold also is increased to $200,000 for terrorism-related acquisitions in support of a humanitarian or peacekeeping or a contingency operation, provided the solicitation is issued by November 24, 2003. (The threshold is raised to $300,000 for contracts awarded and performed outside the United States.)
  
• In the case of DOD, the threshold is increased to $250,000, if in support of a contingency operation and if award is made and funds are obligated by September 30, 2003. The simplified acquisition threshold is $500,000 for contracts awarded and performed, or purchases made, outside the U.S.

This interim rule is effective until November 24, 2003.

Keep in mind that, generally speaking, for these higher thresholds to apply, your products or services must have a clear and direct relationship to defense against or recovery from terrorism-related activity.