What Is the Simplified Acquisition Threshold?
The simplified acquisition threshold (SAT) is the dividing line between streamlined and full-scale federal procurement. Congress established the SAT through 41 U.S.C. 134 and the FAR Council codified it in FAR 2.101. At $350,000 (raised from $250,000 effective October 1, 2025 via routine inflation adjustment per FAR Case 2024-001), it was previously set at $250,000 since the FY2018 NDAA raised it from $150,000.
Below the SAT, agencies use the simplified acquisition procedures in FAR Part 13. These procedures reduce administrative burden for both the government and contractors: solicitations can be oral or written in simplified form, evaluation criteria are less formal, and many standard FAR clauses do not apply.
Above the SAT, the full weight of the FAR applies. Contracting officers must use formal solicitation methods (RFPs under FAR Part 15 or IFBs under FAR Part 14), detailed source selection criteria, and comprehensive documentation of the acquisition decision.
What Changes Below vs. Above the SAT
Below $350,000 (Simplified)
- +Oral or simplified written solicitations allowed (FAR 13.106-1)
- +Set-aside for small business is automatic (FAR 19.502-2(a))
- +Minimal documentation of award decision (FAR 13.106-3)
- +No certified cost or pricing data required (FAR 15.403-1)
- +No subcontracting plan required (FAR 19.702)
- +Reduced protest rights (GAO does not hear protests under micro-purchase threshold)
Above $350,000 (Full FAR)
- +Formal RFP or IFB required (FAR Parts 14 and 15)
- +Full and open competition with formal evaluation (FAR 6.1)
- +Publicize in SAM.gov for 15+ days (FAR 5.203)
- +Pre-award debriefing rights for offerors (FAR 15.505)
- +Most standard FAR clauses apply (FAR 52.2xx series)
- +Full protest rights at GAO and Court of Federal Claims
All FAR Acquisition Thresholds in One Table
Federal acquisition uses over a dozen dollar thresholds that trigger different rules. This table covers the thresholds that matter most to contractors, with the FAR citation and a plain-English explanation of what changes at each level.
| Threshold | Amount | FAR Citation | What Changes |
|---|---|---|---|
| Micro-Purchase Threshold (General) | $10,000 | FAR 2.101; FAR 13.2 | Below: no competition required, single-source purchase allowed, no solicitation needed. Above: competition and solicitation requirements apply. |
| Micro-Purchase Threshold (DoD) | $25,000 | DFARS 213.201; 41 U.S.C. 1902 | DoD raised its micro-purchase threshold to $25,000 for most supplies and services. Same streamlined procedures as general micro-purchase below this amount. |
| Micro-Purchase Threshold (Construction) | $2,000 | FAR 2.101; 40 U.S.C. 3134 | Davis-Bacon Act wage requirements and Miller Act bonding requirements apply above $2,000 for construction. Lower than the general threshold. |
| Simplified Acquisition Threshold (SAT) | $350,000 | FAR 2.101; FAR Part 13 | Below: simplified acquisition procedures, oral solicitations allowed, limited documentation required. Above: full FAR procedures apply, including formal solicitations, detailed documentation, and most FAR clauses. (Raised from $250,000 to $350,000 effective October 1, 2025.) |
| Commercial Item Test Program | $7.5 million | FAR 13.5; 41 U.S.C. 1903 | Commercial items and commercially available off-the-shelf (COTS) items can use simplified procedures up to $7.5 million. Above: full Part 15 procedures required even for commercial items. |
| Small Business Subcontracting Plan | $750,000 ($1.5M construction) | FAR 19.702; FAR 52.219-9 | Contracts above this amount awarded to other-than-small businesses require a subcontracting plan with small business goals. Below: no plan required. |
| Cost or Pricing Data (TINA) | $2,000,000 | FAR 15.403-4; 10 U.S.C. 3702 | Above: contractor must submit certified cost or pricing data (formerly called Truth in Negotiations Act data). Below: certified data not required, though the CO may still request other-than-certified data. |
| Cost Accounting Standards (CAS) -- Modified | $7.5 million (single award) | FAR 30.201-1; 48 CFR 9903.201-1 | Single CAS-covered contract of $7.5M+ triggers modified CAS coverage (4 standards). Below: CAS-exempt. |
| Cost Accounting Standards (CAS) -- Full | $50 million (net CAS awards) | FAR 30.201-1; 48 CFR 9903.201-2 | Contractor receiving $50M+ in net CAS-covered awards in the prior cost accounting period triggers full CAS coverage (all 19 standards). |
| Sealed Bidding Threshold | $350,000 | FAR 14.201-1; FAR 6.401 | Above: sealed bidding (IFB) is the preferred method when price is the primary factor. Below SAT: simplified procedures are used instead of formal sealed bidding. |
| Bid Guarantee (Bonding) | $150,000 | FAR 28.101-1 | Construction contracts above $150,000 require bid guarantees. Performance and payment bonds required above $35,000 (Miller Act, 40 U.S.C. 3131). |
Amounts current as of May 2026. Thresholds are adjusted periodically per 41 U.S.C. 1908 (inflation adjustment) and NDAA provisions.
Recent Threshold Updates
The most significant recent threshold change was the FY2018 NDAA (Section 805), which raised the SAT from $150,000 to $250,000 and made corresponding increases to several other thresholds. This took effect on August 13, 2018, via FAR Case 2018-004.
Under 41 U.S.C. 1908, the FAR Council is required to adjust acquisition-related thresholds every five years to account for inflation, using the Consumer Price Index. The most recent adjustment cycle was completed in 2020. No new statutory changes to the SAT or micro-purchase threshold were enacted in the FY2025 or FY2026 NDAAs.
The DoD micro-purchase threshold at $25,000 (up from the general $10,000) was authorized by Section 217 of the FY2017 NDAA and made permanent for DoD. This applies to basic research awards and most supplies and services procured by DoD contracting officers.
How Thresholds Affect IT Services Contractors (NAICS 541512)
If you provide computer systems design services under NAICS 541512 (small business size standard: $34 million), these thresholds shape your competitive landscape in specific ways.
Micro-purchase orders ($10K / $25K DoD)
IT task orders below the micro-purchase threshold are awarded without competition. These are common for software licenses, small configuration tasks, and ad-hoc support. You win these through relationships and GPC (Government Purchase Card) holders, not through formal proposals. For DoD IT work, the $25,000 threshold means more work flows through purchase cards without solicitation.
SAT-range contracts ($10K to $250K)
This is where many IT task orders and BPA calls land. Under simplified acquisition procedures (FAR Part 13), the contracting officer can evaluate quotes informally and make faster awards. For IT services, this range includes system assessments, short-term staff augmentation, and software development sprints. Per FAR 19.502-2(a), acquisitions between the micro-purchase threshold and the SAT are automatically reserved for small business if the contracting officer expects at least two small business quotes.
Above SAT ($250K+)
Most significant IT services contracts exceed the SAT. At this level, full competition rules apply under FAR Part 15 (negotiated procurement) or FAR Part 16 (contract types). For 541512 contractors, this means formal technical proposals, past performance evaluations, and price realism analysis. Above $750,000, other-than-small prime contractors must submit small business subcontracting plans (FAR 19.702), which creates subcontracting opportunities for small IT firms.
TINA threshold ($2M)
IT services contracts above $2 million require certified cost or pricing data unless an exception applies (FAR 15.403-1). The most relevant exception for IT contractors is the commercial item exception: if your service qualifies as a commercial service under FAR 2.101, you are exempt from TINA regardless of dollar value. Many IT services qualify, but the contracting officer must make that determination.
Common Threshold Mistakes Contractors Make
1. Assuming the SAT eliminates all requirements
Simplified does not mean exempt. Below the SAT, contractors must still comply with applicable laws and executive orders. For example, FAR 52.204-21 (basic safeguarding) applies regardless of dollar value. Service Contract Labor Standards (FAR 22.10) apply above $2,500. The Trade Agreements Act threshold ($183,000 for supplies) falls below the SAT but still applies to covered procurements.
2. Ignoring the micro-purchase / SAT gap
Between the micro-purchase threshold ($10K) and the SAT ($250K) lies a range governed by FAR Part 13 simplified procedures. Many contractors either focus only on large contracts or only on purchase card orders, missing the simplified acquisition range entirely. This range is automatically set aside for small business under FAR 19.502-2(a), making it one of the best entry points for new government contractors.
3. Confusing the commercial item threshold with the SAT
The commercial item test program threshold ($7.5 million under FAR 13.5) allows simplified procedures for commercial items well above the SAT. Contractors sometimes assume that once they exceed the SAT ($350,000), simplified procedures are off the table. If your product or service qualifies as a commercial item, the streamlined process under FAR 13.5 applies up to $7.5 million. This is especially relevant for COTS software and cloud services.
4. Not tracking threshold adjustments
Thresholds change. The SAT doubled in 2018. The DoD micro-purchase threshold is $25,000 while the general threshold remains $10,000. CAS thresholds were adjusted in the FY2018 NDAA. Contractors who price proposals or structure teaming arrangements based on outdated thresholds risk either missing simplified opportunities or failing to comply with requirements that kicked in at a lower dollar amount than they expected.
5. Splitting requirements to stay under a threshold
FAR 13.003(c)(2) explicitly prohibits breaking a requirement into smaller amounts to avoid any threshold. This applies to both government personnel and contractors who suggest it. If a contracting officer determines that a pattern of orders is circumventing the SAT, the contractor risks suspension or debarment.
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