The Federal Acquisition Regulation has officially been updated to increase the micro-purchase threshold and the simplified acquisition threshold, effective August 31, 2020. Various federal agencies had already increased the thresholds through deviations, but this rule makes it official across the board. A few additional thresholds will increase due to inflation.
Read on for the details on how this could impact federal procurement.
The acronyms and terminology used in federal government contracting can be a labyrinth–one sadly devoid of David Bowie. In this post, we’ll clarify some of the common methods used for government procurements, the regulations defining them, and the terminology associated with them.
The Simplified Acquisition Threshold and Micro-Purchase Threshold are officially increasing under the FAR. While various agencies had already increased the thresholds through deviations, this change will officially update the rules in the FAR.
Although this may seem like a minor update, it will cause changes across the federal contracting landscape and will result in more contracts being issued under the Micro-Purchase and Simplified Acquisition Thresholds.
The Department of Defense awarded contracts to an average 30,806 small businesses each year in fiscal year 2016, 2017, and 2018. A proposed rule to update the DFARS may lead to these same businesses receiving payments from the government, or prime contractors, within 15 days of invoicing.
The proposed rule is found at 84 FR 25225. It was published on May 31, 2019 and comments close on July 30, 2019 if you’d like to put in your two cents.
The Air Force’s large NETCENTS-2 IDIQ vehicle did not require orders to be set-aside under the small business pool, except for orders valued between the micro-purchase threshold and simplified acquisition threshold.
In a recent decision, the GAO held that although the NETCENTS-2 contract in question says that Contracting Officers “should” perform a “rule of two” small business set-aside analysis for orders valued over the simplified acquisition threshold, it does not require that such an analysis be performed–meaning that Contracting Officers can validly award such orders to large businesses, even if two or more small business NETCENTS-2 holders exist.
Civilian agencies may issue class deviations to quickly implement provisions of the 2018 National Defense Authorization Act increasing the micro-purchase threshold to $10,000 and the simplified acquisition threshold to $250,000.
In a memorandum for civilian agencies issued on February 16, the Civilian Agency Acquisition Council says that agencies may elect to adopt interim authority allowing their Contracting Officers to take advantage of these higher thresholds, even as the FAR Council goes through the formal process of codifying those changes.