Increases in Simplified Acquisition Threshold and Micro-Purchase Threshold

Under the Federal Acquisition Regulation (FAR), the Simplified Acquisition Threshold (SAT) and Micro-Purchase Threshold (MPT) are increasing according to a recent proposed rule. In 2017 and 2018, the National Defense Authorization Act (NDAA) proposed that the SAT and MPT increase. Now, those proposed rules will be coming into play.

On October 2, 2019, the National Aeronautics and Space Administration (NASA), the General Services Administration (GSA), and the Department of Defense (DoD) proposed that the MPT and SAT increase. Section 806 increases the MPT to $10,000, which was originally at $3,500. Section 805 increases the SAT to $250,000, which was originally at $150,000.

What does this mean for federal contracting?

Increased thresholds mean more contracts under the SAT and MPT. This increase to the SAT and MPT, “reduces burden on contractors by increasing the thresholds at which various regulatory burdens apply,” according to the proposed rule. It also states that costs associated with contractor financing, “could also be reduced by increasing the number of micro-purchases, for which the Govermentwide purchase card is the preferred method of purchase and payment.” Overall, an increased threshold means that contracts are awarded without regulatory burdens, making the process streamlined.

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