specialty metals

[Guest AF1985]

two theories regarding the $100,000 threshold and the flowing of 252.225-7014 Alt 1 to a vendor exist.

(1) Simplified Acquisition Threshold (SAT) exemption only applies on a prime contract level - only prime contracts that are less than $100,000 can fall under this exemption because the term "acquisition" is defined as contracts between the government and its primes. As subcontracts are not "acquisitions," those procurements do not qualify for the SAT exception.

(2) SAT exemption applies to both prime and sub contracts. The theory here is that all the exemptions flow down the chain just as the restrictions do. The plain language of the statute states that exemptions apply to "procurements" not acquisitions. Thus, if a sub could possibly benefit from the COTS exemption (which it can), it should also be able to benefit from the SAT exemption as well. It could be that the "SAT" term was included as the threshold so it doesn't have to go back and revise the rule each time the SAT is increased/decreased. Finally, none of the exceptions specify application only to primes or subs.

As you can see, good arguments are on both sides. I wonder if anyone has any better insight on the meaning of the statute?

[br549]

To understand subcontract requirements one must read the subcontract, not FAR or DFARS. 252.225-7014 Alt 1, as it would appear in a subcontract, does not contain the simplified acquisition threshold. Therefor there is no exception for subcontracts. That shows how the DFARS authors interpret the statute.

[Buyerboy]

What is old is new again, , , ,

7014 has been replaced by 7009, and the SAT has increased to $150K. But, none-the-less, , , ,

I am now with a Small Business subcontractor.

I find that quite a few of our customers (all "Primes") flow down 252.225-7009 in their standard Terms and Conditions. But, , , , as only applicable if their Purchase Order/Subcontract to us is over the SAT. Their Prime Contracts are most likely way over the SAT.