Micro-Purchases: Changes are coming!

By Rebecca Barbour, PTAC counselor at North Carolina State University

Micro purchases represent the smallest federal purchase, but account of over $8 billion in annual federal spending. Defined in FAR Subpart 13.2, micro purchases do not require full provisions and clauses, may be awarded without competitive solicitations, and are typically made using government purchase cards (P-Cards). The micro purchase threshold has long been set at $3,000, but that is changing with the 2018 NDAA. The 2018 National Defense Authorization Act has raised the micro-purchase threshold to $10,000 for all civilian agencies. The micro purchase threshold was previously raised to $5,000 for the Department of Defense with the 2017 NDAA. By definition, the federal buyers will now be able to make purchases up to $10,000 without competitive solicitations. Buyers will still be expected to determine price reasonableness and properly document these transactions.

Raising the micro purchase threshold is expected to profoundly impact contracting. Experts claim that federal employees will have much greater access to the commercial marketplace. Some also believe this will increase the opportunities for small businesses to engage in micro purchasing, provided they have established merchant accounts.

In addition to increasing the micro-purchase threshold, the 2018 also raised the simplified acquisition threshold from $150,000 to $250,000. This is also expected to help small businesses, as purchases over the micro purchase threshold and up to the simplified acquisition threshold are automatically set-aside for small business.

Implementation of change in thresholds will take some time, but agencies are already moving to make it happen. The Civilian Agency Acquisition Council (CAAC) has provided authorization and guidance to civilian agencies to issue class deviations so that contracting personnel may begin using the new micro-purchase threshold. Many agencies are expected to issue these deviations, as the increased threshold will allow greater flexibility as they attempt to spend the recently passed budget before the end of the fiscal year.

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