GSA Schedule Acquisition Threshold Increases

Acquisition Threshold Increases

Introduction

The Federal Acquisition Regulation requires the federal Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council update the statutory acquisition thresholds every five years – on October 1 of each year evenly divisible by five – using the Consumer Price Index. A new final rule on the Federal Register would change the monetary thresholds for certain acquisition categories commensurate with inflation. Acquisition thresholds are the top dollar amount for certain types of federal purchases

Changes include:

  • The micro-purchase base threshold of $3,000 is increased to $3,500.

Micro-purchase is an acquisition of supplies or services using simplified acquisition procedures, the aggregate (total) amount of which does not exceed the micro-purchase threshold.

  • The threshold for use of simplified acquisition procedures for acquisition of commercial items is raised from $6.5 million to $7 million.

Simplified acquisition is a streamlined method for making purchases of supplies or services. The “simplified acquisition threshold” delineates what types of purchases can use this streamlined method.

  • The cost or pricing data threshold and the statutorily equivalent Cost Accounting Standard threshold are raised from $700,000 to $750,000.

Unless an exception applies, certified cost or pricing data are required before the award of any negotiated contract or subcontract expected to exceed the current threshold.

  • The prime contractor subcontracting plan floor is raised from $650,000 to $700,000.

The FAR requires most large business contractors to have a plan approved by the government to subcontract a certain amount of their work to the various types of small business contractors (i.e., SDB, WOSB, SDVOSB, etc) for contracts above the threshold.

  • The threshold for reporting first-tier subcontract information including executive compensation will increase from $25,000 to $30,000.

Reporting on first-tier subcontracts is done at the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). Unless otherwise directed by the contracting officer, reporting must occur by the end of the month following the month of award of a first-tier subcontract with a value above the threshold.

SharpMinds Insights

One threshold change in this rule that may temporarily impact small business concerns is the increase of the micro-purchase threshold from $3,000 to $3,500. This 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).

For Fiscal Year 2013, there were 83,951 contracts and calls/orders between $3,000 and $3,500, with a value of $272,567,926. Of these actions, 34,828 (value of $113,280,333) went to small business concerns. It is expected that many of these awards will still go to small business concerns, even if there is no longer a requirement to automatically set the procurement aside for small business concerns.