Acquisition-related Thresholds Recently Changed

Did you know the Acquisition-related Thresholds recently changed?

Effective October 1, 2015, the Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics Administration (NASA) issued a final ruling, FAR Case 2014-002, which adjusts the acquisition-related dollar thresholds for inflation. The adjustment will impact four Integrated Award Environment (IAE) systems: System for Award Management (SAM), the Federal Procurement Data System – Next Generation (FPDS-NG), Electronic Subcontracting Reporting System (eSRS) and the FFATA Subaward Reporting System (FSRS). The law requires acquisition-related thresholds to be adjusted every 5 years for inflation using the Consumer Price Index (CPI) for all Urban Consumers, with the following exceptions:  

• Construction Wage Rate Requirements statue (formerly Davis-Bacon Act)
• Service Contract Labor Standards statue
• Trade agreements thresholds

The DoD, GSA, and NASA   also use the same methodology to adjust nonstatutory FAR acquisition-thresholds.

The following table shows the results of the thresholds review:

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What does that mean and how will it affect me?

Micro-purchase and simplified acquisition threshold

The micro-purchase threshold increase from $3,000 to $3,500 is the most likely change to impact small businesses. As a GSA Schedule contract holder you are aware that purchases under the micro-purchase threshold are exempt from the requirement to obtain competitive quotes or process a sole-source justification. Thus, your company may notice an increase in purchases directly from agencies when orders are below $3,500.

DoD, GSA, and NASA also anticipate that the increase will temporarily narrow the range of acquisitions automatically set aside for small business concerns, because the simplified acquisition threshold of $150,000 will not increase at this time (although it may increase to $200,000 in 2020). To assess the impact of the increase in the micro-purchase threshold from $3,000 to $3,500, data was requested from the Federal Procurement Data System-Next Generation (FPDS-NG).

For Fiscal Year 2013, there were 83,951 contracts and calls/orders valued between $3,000 and $3,500, totaling $272,567,926. Of these actions, 34,828 (totaling $113,280,333 or 41.6 percent) went to small businesses. DoD, GSA, and NASA expect that many of these awards will still go to small business concerns, even if there is no longer a automatic set-aside requirement.

FedBizOpps pre-award and post-award notices

Although this threshold hasn’t been affected, it’s important to know that any potential Federal opportunities above $25,000 must be communicated to the public and interested potential vendors through FedBizOpps, unless any of the FAR 5.202 exceptions apply.

Government acquisition opportunities come in one of these four formats: Request for Quote (RFQ), Request for Proposal (RFP), Invitation for Bid (IFB), and Source Sought or Request for Information (RFI). Each has its own purpose and required response. Find more information about responding to Government opportunities in our previous article. Additionally, once the opportunity has been awarded and the value of the contract is above $25,000 then the contract award is also posted on FedBizOpps.

Prime contractor subcontracting plan

If you were a large business, you were required to submit a Small Business Subcontracting Plan as part of your GSA Schedule offer. The subcontracting plan governs your entire GSA contract and is established with specific dollar goals, as well as a 23% percent goal of subcontracting to small business firms. The threshold for requiring a subcontracting plan was $650,000 for Large Businesses with GSA Schedules; that threshold has been raised to $700,000.