FAR Final Rule Increases both Micro-Purchase and the Simplified Acquisition Threshold

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While many federal agencies have already increased the thresholds for micro-purchase and simplified acquisition via deviations, the FAR has officially been updated as well. Effective August 31, 2020, the FAR has solidified the following thresholds:

  • $10K for micro-purchase (previously $3,500)
  • $250K for simplified acquisition threshold (previously $150K)

The increase to the simplified acquisition threshold should help small businesses, and here’s how: Purchases above the micro-purchase threshold, but not over the simplified acquisition threshold, shall be set aside for small business if two or more small firms are expected to compete. See FAR 19.502-2.

How can you leverage this rule to your advantage?

Micro-purchases or simplified acquisition threshold are ways in which smaller dollar amount contracts can be accomplished without any competition. These situations are perfect for new, emerging small businesses.  

Opportunities exceeding these limits have to go according to the regular FAR guidelines and do a regular acquisition (competition), unless you can do something with a set-aside that gives you a sole source. Government requirements falling within these dollar value limits can even be awarded to large businesses.  

There are some rules and regulations that must be considered, for example, you can’t do 10K a hundred times to support a $1,000,000 requirement but you can do 10K and even some renewals, etc.

Fundamentally this applies to something small, e.g., you’re going to send a couple employees in for a week of analysis and they can give you a sole source for $10,000 to do that easily.

For larger but still small increments up to $250K, there is a SAP (simplified acquisition procedure) FAR 19.502-2 explanation. That work that might only be a small amount to most big contracts, but it’s a way to get your foot in the door and get started, and you can do that on a sole source basis under the simplified acquisition rules. 

So certainly anyone who’s starting out, this is a way to get business directly for yourself. You have to go look at the rules and understand them, but the point is you can get a $10K purchase order directly, straight up, no competition, and these $250K ones with certain rules and regulations, and under certain conditions.


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