DoD Bumps Up Contract Limits to Fight Inflation
Published Date: 8/25/2025
Rule
Summary
The Department of Defense is updating its buying rules to keep up with inflation, making sure dollar limits for contracts go up every 5 years. This change affects companies working with the DoD by adjusting when certain rules kick in, starting in 2025. Some contract thresholds won’t change, but many will rise to match the cost of living.
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Five‑Year Inflation Updates to Thresholds
If your company does business with the Department of Defense, statutory acquisition-related dollar thresholds will be adjusted for inflation every 5 years using the Consumer Price Index for All Urban Consumers (CPI‑U). The rule implements those 5‑year adjustments beginning in 2025 so many contract dollar limits will rise to match the cost of living.
Certain Statutes and Thresholds Exempted
The inflation adjustment does not apply to the Construction Wage Rate Requirements statute (Davis‑Bacon Act), the Service Contract Labor Standards statute, performance and payment bonds, and trade agreements thresholds. If your contracts are governed by those statutes or thresholds, those dollar limits will not be raised by this CPI‑U adjustment.
Some DFARS Nonstatutory Thresholds Raised
DoD applied the same CPI‑U methodology to adjust some nonstatutory DFARS acquisition-related thresholds in 2025. That means certain DFARS dollar limits that are not set by statute were also increased in 2025 using the inflation formula.
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Key Dates
Department and Agencies
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