The simplified acquisition threshold would increase to $500,000 under the version of the 2016 National Defense Authorization Act currently before the U.S. House of Representatives.

If the House proposal ultimately becomes law, the simplified acquisition threshold would more than triple from its current $150,00 level.  Such a dramatic increase in the simplified acquisition threshold could affect nearly all federal contractors–especially small businesses.

Under federal statute, the simplified acquisition threshold is set at $100,000.  However, the law also requires an adjustment for inflation every five years.  Because of the inflation review, the FAR was adjusted in 2010 to raise the threshold to $150,000, where it remains today.

Section 854 of the proposed 2016 NDAA would strike the $100,000 statutory threshold and replace it with a $500,000 threshold.  The revised threshold would still be subject to inflation-based adjustments.  Additionally, the proposed 2016 NDAA would increase the micro-purchase threshold from $3,000 to $5,000.

In its Committee Report, the House Committee on Armed Services states that the proposed increase will “further enable Federal agencies to buy products and services more quickly, more economically, and with a focus on small business.”

As my friend Guy Timberlake of the American Small Business Coalition has often written, small businesses have benefited tremendously from simplified acquisitions.  I am looking forward to hearing what Guy and other small business advocates think about the potential increase proposed by the House.

The 2016 NDAA was passed by the House Armed Services Committee on April 30, and now awaits a vote by the full House.