Federal Small Purchase Threshold Adjustment
|DATE:||September 11, 2012|
|SUBJECT:||Small Purchase Threshold|
Financial Management Directors
We understand that some grantees and sub grantees have recently experienced confusion regarding the small purchase threshold applicable to procurements under FNS programs. The Federal Acquisition Regulation (FAR) currently gives $150,000 as the simplified acquisition threshold applicable to federal procurements, while departmental regulations at 7 CFR 3016.36(d)(I) still say $100,000. The $150,000 figure is correct; it applies to procurements under federal grants even though the Department has not updated Part 3016 to prescribe it.
Title 41 of the United States Code (USC), entitled "Public Contracts," is the statutory authority for federal procurement policies. As you know, the small purchase thresholds set by both the FAR (at 48 CFR 2. I0l(c)) and Part 3016 are pegged to 41 USC 403(11). That legislation has not been amended to revise the small purchase threshold upward to $150,000. Rather, the threshold has been raised through statutorily-required administrative action. Section 807 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (PL 108-375, 118 Stat. 1811) added a provision to the Office of Federal Procurement Policy Act (41 USC 403 et seq.) requiring that most federal "acquisition-related thresholds" be periodically adjusted for inflation. This legislation directed that such adjustments be made every five years.
The adjustments are made by the Federal Acquisition Regulatory Council, which consists of OMB's Office of Federal Procurement Policy, the Defense Department, the General Services Administration, and the National Air and Space Administration. The Council made its first review of acquisition-related thresholds in Fiscal Year 2005, and published the resulting adjustments in September 2006. Their second review, in Fiscal Year 2010, generated the small purchase threshold adjustment to $150,000. The final rule amending the FAR for the Fiscal Year 2010 adjustments was published at 75 FR 53129 on Aug. 30, 2010. That final rule is attached.
Although the adjustments to federal acquisition-related thresholds were made administratively, without any change to the underlying statutes, they nevertheless have the force of law. This is because the administrative action was expressly required by statute.
Please share this information with your program counterparts and your state partners. Also, please ask them to share it with all interested parties, such as sub grantees.
CFO and Deputy Administrator
The contents of this guidance document do not have the force and effect of law and are not meant to bind the public in any way. This document is intended only to provide clarity to the public regarding existing requirements under the law or agency policies.