By: Deanna Langman | Montana PTAC Program Manager
According to the Small Business Administration (SBA), about 70 percent of all federal agency procurement transactions are for routine, lower value products/services known as micro-purchases. The Federal Acquisition Regulation (FAR) was recently updated to reflect the new, federal “micro-purchase threshold” of $10,000.
Micro-purchases can be made on a government purchase card (GPC) and are not subject to normal procurement procedures. Authorized civilian and DoD government purchase card holders can procure goods and limited services (discussed below) without soliciting a competitive price, provided the card holder has determined the price to be reasonable. For companies that routinely generate sales at or below $10,000, this can be a terrific business opportunity.
Federal Acquisition Regulation (FAR) Part 2, Subpart 2.1 Section 2.101 defines micro-purchase as an acquisition of supplies or services using simplified acquisition procedures, the aggregate amount of which does not exceed the micro-purchase threshold.
Micro-purchase threshold means $10,000, except it means-
(1) For acquisitions of construction subject to 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction), $2,000;
(2) For acquisitions of services subject to 41 U.S.C. chapter 67, Service Contract Labor Standards, $2,500;
(3) For acquisitions of supplies or services that, as determined by the head of the agency, are to be used to support a contingency operation; to facilitate defense against or recovery from cyber, nuclear, biological, chemical or radiological attack; to support a request from the Secretary of State or the Administrator of the United States Agency for International Development to facilitate provision of international disaster assistance pursuant to 22 U.S.C. 2292 et seq.; or to support response to an emergency or major disaster (42 U.S.C. 5122), as described in 13.201(g)(1), except for construction subject to 40 U.S.C. chapter 31, subchapter IV, Wage Rate Requirements (Construction) (41 U.S.C. 1903)–
(i) $20,000 in the case of any contract to be awarded and performed, or purchase to be made, inside the United States; and
(ii) $35,000 in the case of any contract to be awarded and performed, or purchase to be made, outside the United States.
There are a few other limitations for educational institutions that are defined HERE.
PTAC can help your company be more visible in the government marketplace and formulate strategies to maximize micro-purchase and other contracting opportunities. Contact an advisor near you at www.montanaptac.org.