Government Contracts FAR Rule Increases Acquisition Thresholds
Tuesday, July 28, 2020

FAR Rule Increases Acquisition Thresholds

By Government Contracts Editorial Staff

The FAR Case 2018-004 final rule implements National Defense Authorization Act provisions increasing the micro-purchase and simplified acquisition thresholds. Sections 805 and 806 of NDAA FY 2018 (PL 115-91) amended 41 USC 1902(a) to increase the SAT to $250,000 and the MPT to $10,000. Section 217(b) of NDAA FY 2017 (PL 114-328) increased the MPT for acquisitions from institutions of higher education or related or affiliated nonprofit entities, or from nonprofit research organizations or independent research institutes to $10,000, but authorized a higher amount under certain circumstances. Section 1702(a) of NDAA FY 2018 amended section 15(j)(1) of the Small Business Act (15 USC 644(j)(1)) to replace specific dollar thresholds with the terms “micro-purchase threshold” and “simplified acquisition threshold.” This rule amends FAR 2.101, Definitions, by increasing the MPT from $3,500 to $10,000. The new MPT definition reflects the higher threshold exception for institutions of higher education and other entities covered by section 217(b). For the SAT definition, the threshold increases to $250,000 from $150,000. The SAT for acquisitions of supplies or services to support a humanitarian or peacekeeping operation increases from $300,000 to $500,000. The rule replaces various non-statutory, stated dollar thresholds intended to correspond with the MPT and SAT, with the phrase “micro-purchase threshold” or “simplified acquisition threshold.” In addition, the rule adds text in FAR Subpart 13.5 to clarify the use of the approval thresholds, based on the increased SAT, for sole source justifications executed under the simplified procedures for certain commercial items.

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