Changes to Dollar Thresholds

A February memo from William Clark, chair of the Civilian Agency Acquisition Council outlined changes to the Micro-Purchase and Simplified Acquisition Thresholds per the 2018 National Defense Authorization Act. 

Please note that instead of stating a specific dollar amount, most Federal Acquisition Regulation references to these thresholds direct the reader to the definitions at FAR 2.101 which links to the dollar amount cited in the appropriate section of 41 US Code. (It will take a while before the FAR is updated to show these changes, however, this letter indicates how pen and ink changes may be implemented.)

The micro-purchase threshold is increased to $10,000. That means that acquisitions less than $10,000 will not require competition nor be set-aside for small business – in most cases. Construction under micro-purchase is limited to $2,000 because of Davis Bacon Wage Rate requirements; and Services will be limited to $2,500 per the Service Contract Act. The construction and service limitations are amounts set by statute (41 USC 1902) which did not change.

The Simplified Acquisition Threshold was increased from $150,000 to $250,000. In this case FAR 2.101 states that the threshold is $150,000 but links to 41 USC 134, which states that it was increased to $250,000 per the 2018 NDAA. 

Of course, micro-purchase means credit card buys that usually don’t go through the contracting office. Therefore, acquisition of products exceeding $10,000, construction in excess of $2000, and services more than $2500 but less than $250,000 are automatically set aside for small business.

Some agencies may be slow to implement these changes so don’t be surprised if you don’t immediately see the higher amounts at either the micro-purchase or the SAT. Government agencies often wait for changes to be published in the regulation or they may be reluctant to immediately increase the authority of micro-purchase card-holders until further guidance and/or training is provided.

It is important to note that the Department of Defense issued a memo in April of this year that allows for the increase of the micro-purchase threshold and SAT within defense. Each federal agency’s leadership will determine when to implement the increase if not clearly stated within the federal acquisition regulations.

If you have questions about these changes to the Micro-Purchase and the Simplified Acquisition Thresholds, call the APAC office at 501-671-2390.