Micro-purchase and Simplified Acquisition Threshold Increases

The Office of Management and Budget (OMB) released a memorandum on June 20, 2018, which modifies the thresholds used for purchases utilizing the micro-purchase method and the simplified acquisition method for all federal agencies. The micro-purchase threshold has been increased from $3,500 to $10,000, and the simplified acquisition threshold has been increased from $100,000 to $250,000.

Technically the increase is not effective until it is implemented in the Federal Acquisition Regulation (FAR) at 48 CFR Subpart 2.1; however, OMB is granting an exception and allowing recipients to utilize the higher thresholds in advance of the revision. Even though the exception has been authorized, organizations must still follow their internal purchasing policies.

To take advantage of these increased thresholds, we recommend that those entities that receive federal dollars take the time to review their procurement policy.

• Some organizations include in their policy the actual dollar amount that should be utilized when making purchases using the two methods discussed above. Those organizations should revise their policies and procedures to include the higher threshold.
• Other organizations may have indicated that they follow 48 CFR Subpart 2.1 with the thought that it would eliminate the hassle of updating the policy in the future to agree with current approved thresholds. As this increase is not technically written into that code yet, it is our recommendation to revise the policy to indicate that the organization will utilize the higher of the amounts listed in 48 CFR Subpart 2.1 or amounts approved by memorandums issued by the OMB.

If you have implementation questions, please contact your trusted advisor at Yeo & Yeo.