According to the Small Business Administration (SBA), about 70 percent of all federal procurement transactions are for routine, lower value products/services known as micro-purchases. On August 31st, 2020 the Federal Acquisition Regulation (FAR) was officially updated to reflect the new, federal “micro-purchase threshold” of $10,000. Micro-purchases can be made on a government purchase card (GPC) and are not subject to normal procurement procedures. Authorized civilian and DoD government purchase card holders can procure goods and limited services without soliciting a competitive price as long as the card holder determines the price to be reasonable. For companies that routinely make sales at or under $10,000 this can be a terrific business opportunity.
Federal Acquisition Regulation (FAR) Part 2, Subpart 2.1 Section 2.101 defines micro-purchase as an acquisition of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold.
Micro-purchase threshold means $10,000, except it means-
(1) For acquisitions of construction subject to 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction), $2,000;
(2) For acquisitions of services subject to 41 U.S.C. chapter 67, Service Contract Labor Standards, $2,500;
(3) For acquisitions of supplies or services that, as determined by the head of the agency, are to be used to support a contingency operation; to facilitate defense against or recovery from cyber, nuclear, biological, chemical or radiological attack; to support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provision of international disaster assistance pursuant to 22 U.S.C. 2292 et seq.; or to support response to an emergency or major disaster (42 U.S.C. 5122), as described in 13.201(g)(1), except for construction subject to 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction) (41 U.S.C. 1903)–
(i) $20,000 in the case of any contract to be awarded and performed, or purchase to be made, inside the United States; and
(ii) $35,000 in the case of any contract to be awarded and performed, or purchase to be made, outside the United States; and
(4) For acquisitions of supplies or services from institutions of higher education (20 U.S.C. 1001(a)) or related or affiliated nonprofit entities, or from nonprofit research organizations or independent research institutes—
(i) $10,000; or
(ii) A higher threshold, as determined appropriate by the head of the agency and consistent with clean audit findings under 31 U.S.C. chapter 75, Requirements for Single Audits; an internal institutional risk assessment; or State law.
PTAC can help your company formulate strategies to maximize micro-purchase threshold opportunities. Contact an advisor near you at www.montanaptac.org