Recipients of Federal grants and cooperative agreements breathed a sigh of relief last week when the Office of Management and Budget (OMB) raised both the micro-purchase threshold and the simplified acquisition threshold in one, fell swoop. The move sought to eliminate a significant amount of confusion regarding acceptable levels for micro-purchases, and to also ease procurement compliance requirements on smaller transactions.
The most impactful change for many is the increase in the micro-purchase threshold from $3,500 to $10,000. The previous threshold had been deemed much too small by many recipients of Federal financial assistance, especially research universities and institutes who’d been lobbying for an increase for months. The guidance also provides for an approval process for certain institutions that want to request micro-purchase thresholds higher than $10,000.
The other big change was an increase in the Simplified Acquisition Threshold from its current $150,000 to $250,000. The practical aspect of this change is that more procurements will fall under the Small Procurement Methods, and will not need to comply with the more stringent requirements of the Competitive Proposal Method.
The updated thresholds went into effect on the date the memo was released – June 20, 2018. The letter urged recipients of federal grants to, “Document any change based on this exception in accordance with Uniform Guidance.”
While many Federal grantees are rejoicing, our advice is to proceed with caution. Remember, the Uniform Guidance procurement standards are just the minimum compliance standards for Federally-funded procurements. We are recommending that our clients evaluate these new thresholds, and only make adjustments if the increased amounts are within their own risk tolerance. In other words – you may still want to get bids on those $3,500 – $10,000 procurements even if the government says you don’t have to.
If you have any questions about these updates or how to document any such changes, feel free to contact us here.
Author: Tom Rogers
Job Title: CEO
Organization: Vendor Centric
Tom is the founder and CEO of Vendor Centric, he has been a trusted advisor to nonprofit organizations for 30 years, with a focus on helping them align the right people, processes and systems to mitigate third-party risk and drive more value from third-party contracts and relationships.