Limits on Micro-Purchases and Simplified Acquisition Thresholds Increased

The National Defense Authorization Act (NDAA) for 2018 increased the micro-purchase threshold from $3,000 to $10,000 and the simplified acquisition threshold (SAT) from $150,000 to $250,000 (see 2018 NDAA Sections 806 and 805 respectively). Until the Federal Acquisition Regulations (FAR) can be formally amended, Government agencies have been authorized to issue class deviations implementing these provision. The Energy Department has already issued its class deviation to raise these thresholds and most likely, other agencies will soon issue their own class deviations.

This is good news for both the Government and contractors because it will expedite the process and reduce the amount of work involved in procuring small dollar purchases. However, it comes at a risk as many have pointed out. We have reported on several instances of contract fraud where contracting officers and willing contractors have taken advantage of the reduced oversight that comes with purchases under the simplified acquisition threshold. These $250,000 purchases can add up to big money after awhile.

With micro-purchases, Federal agencies can bypass many of the ordinary competitive requirements under FAR. Authorized purchasers can make contract awards without soliciting competitive quotations. The FAR rules on micro-purchases are set form in FAR Subpart 13.2.

FAR Part 13 also governs purchasing below the simplified acquisition threshold. It sets forth shorter terms and conditions, especially in the areas of reporting requirement and subcontracts. Simplified acquisition transactions above the micro-purchase threshold are reserved for small businesses.

The new rules also provide for increased simplified-acquisition thresholds for contracts to support humanitarian or other peacekeeping operations and for contracts to be awarded and performed or purchases to be made outside the United States.