The two numbers that decide how you get bought
Most firms trying to break into federal work aim at the wrong target. They read about a $40 million IDIQ, build a capture plan around it, and spend eighteen months getting nowhere. Meanwhile the same agency is buying software, data work, and engineering support every week in amounts small enough that one contracting officer can award them from a desk in an afternoon. Those buys are governed by two thresholds in FAR 2.101: the micro-purchase threshold and the simplified acquisition threshold. Learning what those two numbers permit is the single highest-return hour a new federal seller can spend.
Both numbers changed recently. Under 41 U.S.C. 1908, statutory acquisition-related thresholds are re-indexed to the Consumer Price Index every five years. The FAR Council published the current adjustment on August 27, 2025, and it took effect for acquisitions on or after October 1, 2025. The micro-purchase threshold went from $10,000 to $15,000. The simplified acquisition threshold went from $250,000 to $350,000. Anyone still working from a 2024 cheat sheet is now wrong on both.
What moved in the FAR inflation adjustment
Micro-purchase threshold: $10,000 → $15,000 (FAR 2.101). Simplified acquisition threshold: $250,000 → $350,000 (FAR 2.101). Contingency-operation micro-purchase variants: $20,000 → $25,000 inside the United States and $35,000 → $40,000 outside it. Simplified procedures for certain commercial products and services: $7.5M → $9M (FAR 13.500(a)). Subcontracting plan floor: $750,000 → $900,000 (FAR 19.702). Certified cost or pricing data: $2M → $2.5M (FAR 15.403-4). Sole-source 8(a): $4.5M → $5.5M, and $7M → $8.5M for manufacturing (FAR 19.805-1).
What a micro-purchase permits
Below $15,000, the federal buying process collapses to almost nothing. FAR 13.203 says a micro-purchase may be awarded without soliciting competitive quotations at all, so long as the contracting officer or the appointed purchaser considers the price to be reasonable. There is no synopsis. There is no source-selection plan. There is no evaluation panel, no technical volume, no past-performance factor, no debriefing. Somebody with warrant authority decides the price looks fair and buys the thing.
Two constraints sit on top of that freedom. First, FAR 13.203 also directs that micro-purchases be distributed equitably among qualified suppliers, which is why a buyer who has used the same vendor four quarters running will often go looking for a new one. That rotation is an opening, and it is the reason a good capability email landing in the right inbox in September is worth more than most people think. Second, the purchase still has to comply with the rest of the FAR that applies at any dollar value: sourcing preferences in Part 8, supply-chain prohibitions, and the small-business considerations the agency carries.
The payment mechanism matters as much as the authority. FAR 13.201 makes the Governmentwide commercial purchase card the preferred method to purchase and pay for micro-purchases. GSA SmartPay raised the standard single-purchase limit to $15,000 in step with the FAR change. That means a federal employee with a card in their wallet can buy a scoped piece of engineering work, a data assessment, a prototype, or a year of a software product, and the money moves in days rather than quarters. Cardholder limits are set by the agency and are often lower than the ceiling, so the practical question to ask a prospective buyer is simple: what is your single-purchase limit?
How a first federal award tends to arrive — relative likelihood
Editorial weighting from public acquisition rules and practitioner reading — illustrative, not a measured statistic.
The band from $15,000 to $350,000
Above the micro-purchase threshold and at or below $350,000, the buyer uses simplified acquisition procedures under FAR Part 13. Competition requirements exist here but they are light. FAR 13.104 tells the contracting officer to promote competition to the maximum extent practicable, which in daily practice means emailing a handful of vendors a short request for quotation and taking the best value that comes back. Quotations can be brief. Award documentation is short. The buyer is not obligated to run the Part 15 negotiated-procurement apparatus, and usually does not.
Publicity rules give the band its shape. FAR 5.101(a)(1) requires a synopsis on the governmentwide point of entry, SAM.gov, for proposed contract actions expected to exceed $25,000. FAR 5.101(a)(2) covers actions expected to exceed $20,000 but not $25,000 with a public display or an appropriate electronic notice. Read the two together and a useful fact drops out: federal buys below $25,000 need never appear on SAM.gov at all. A firm whose entire pipeline strategy is "watch SAM.gov" is invisible to the fastest-moving segment of the market. Those buys are found by being known to the person with the requirement.
FAR 13.005 lists the statutes that simply do not apply at or below the simplified acquisition threshold. That list is the reason a $200,000 award can close in weeks while a $2 million award takes a year. Certified cost or pricing data is not in play here either; that obligation attaches at $2.5 million under FAR 15.403-4. What the buyer needs from you is a price, a description of what they get, and enough confidence that you will deliver.
| Band | Competition | Publicity | Past performance |
|---|---|---|---|
| At or below $15,000 Micro-purchase | None required if price is reasonable (FAR 13.203); equitable distribution among suppliers | None | Not evaluated; no CPARS record |
| $15,000 to $25,000 Simplified procedures | Competition to the maximum extent practicable (FAR 13.104); informal quotes | Public display or electronic notice above $20,000 (FAR 5.101(a)(2)) | Rarely a formal factor; no CPARS record |
| $25,000 to $350,000 Simplified procedures | Same, with a wider quote pool and often a written RFQ | Synopsis on SAM.gov (FAR 5.101(a)(1)) | May be considered informally; no CPARS record required |
| Above $350,000 Full FAR machinery | Full and open competition unless an exception applies | Synopsis plus solicitation, standard timelines | Formal factor; CPARS evaluation required (FAR 42.1502(b)) |
| Commercial products and services | Simplified procedures usable to $9M (FAR 13.500(a)) | Combined synopsis/solicitation permitted | Formal factor above the threshold |
The set-aside that comes free with the band
This is the part small firms most often miss. FAR 19.502-2(a) automatically reserves every acquisition of supplies or services above the micro-purchase threshold and not over the simplified acquisition threshold exclusively for small business concerns. The contracting officer sets it aside unless there is no reasonable expectation of obtaining offers from two or more responsible small businesses at fair market prices. No one has to argue for the set-aside. It is the default.
When the simplified acquisition threshold moved from $250,000 to $350,000, that reservation moved with it. Every federal requirement priced between those two figures is now presumptively small-business work that was previously open to anyone. That is a $100,000-wide slice of the market handed to small firms in a single rulemaking, and it applies across every civilian agency and every defense component. If your firm is small under the applicable NAICS size standard, the competitive set in this band is other small firms.
How a first small award actually gets made
The sequence below is what we see when a first award happens quickly. Note that none of it starts with a solicitation. It starts with a person who has a problem and a small pot of money that has to be obligated.
The path a sub-threshold award usually takes
Step one is not optional and it is where firms lose weeks. A buyer cannot award to an entity that is not registered; FAR 4.1102 requires SAM registration prior to award, with a narrow set of exceptions. We treat the registration chain as table stakes, not as a milestone.
Step three is where most of the win is decided. A one-page scope that names the deliverable, the data it needs, the acceptance criterion, and one fixed price is dramatically easier to buy than a capabilities deck. The buyer has to justify a price to somebody. Give them the sentence they will use.
Why past performance is not scored the same way down here
Past performance is the classic circular trap: you cannot win federal work without a record, and you cannot build a record without winning federal work. Below the simplified acquisition threshold, the circle is broken by regulation rather than by persuasion.
Start with what the government collects. FAR 42.1502(b) requires agencies to prepare past-performance evaluations in CPARS for contracts and orders that exceed the simplified acquisition threshold. Below it, no CPARS record is generated. Construction is reported at $900,000 or more and architect-engineer services at $45,000 or more, but for the software, data, and analytic services most firms sell, the reporting line is the simplified acquisition threshold. Two consequences follow, and they point in opposite directions.
The first consequence is favorable. Under Part 13 the contracting officer is generally not running a formal past-performance factor at all. Responsibility, not comparative scoring, is the question. In negotiated acquisitions above the threshold, FAR 15.305(a)(2)(iv) says an offeror without a relevant record may not be evaluated favorably or unfavorably on past performance, which produces the familiar neutral rating. Below the threshold you rarely even reach that question. The buyer wants to know that the price is fair and that you can perform.
The second consequence is the one to plan around. Because sub-threshold work generates no CPARS record, it does not automatically become citable past performance later. You have to capture it yourself: a signed statement from the buyer, a delivered artifact you are permitted to describe, an acceptance email, a metric the customer agreed to. FAR 15.305(a)(2)(ii) permits an agency to consider past performance information from sources other than CPARS, and commercial work counts. Collect the evidence at delivery, when the customer is pleased and the work is fresh. Our practice is to write the acceptance criterion into the scope up front, so the record of success exists the moment the work is accepted. We wrote about building that record from nothing in past performance from zero.
State, local, and pass-through buyers use the same numbers
The federal thresholds reach further than the FAR. When a state agency, county, university, or transit authority spends federal grant money, its procurement is governed by the Uniform Guidance at 2 CFR Part 200. Under 2 CFR 200.320(a)(1), micro-purchases may be awarded without soliciting competitive quotations if the price is reasonable, using the same threshold identified in the FAR. The recipient may self-certify a higher micro-purchase threshold up to $50,000 annually, with documented justification tied to low-risk auditee status, an internal risk assessment, or state law; anything above $50,000 requires approval from the cognizant agency for indirect costs.
That has a practical effect worth naming. A state department of transportation or a county health agency running federal pass-through funds can often buy a scoped analytic engagement up to $50,000 with no formal competition and no posting anywhere. For firms selling data and AI work to public-sector customers, that is a faster path than most federal offices offer, and the buyers are easier to reach.
Pricing for the band
Price to the ceiling, not through it. A quote at $15,400 forces a buyer out of the micro-purchase lane for four hundred dollars. Scope the work so it lands under the limit that applies to that buyer, or split it honestly into a first phase and a follow-on. Splitting a single requirement solely to stay under a threshold is improper, so the phases have to be genuinely separable deliverables with independent value.
Fixed price, always. A card cannot pay an open-ended labor-hour arrangement. Name a number, name what it buys, name when it is done.
Make the deliverable an artifact. A report, a working pipeline, a labeled dataset, a model card, a running prototype the customer can open. Artifacts are easy to accept and easy to point at later. Hours are neither.
Do not discount to win a first award. The price you set becomes the anchor for the follow-on. A $12,000 assessment that leads to a $280,000 build is a good trade; a $3,000 assessment that establishes you as cheap labor is not.
Positioning for this lane
- Active SAM.gov registration with a UEI, CAGE code, and NAICS codes that match the buyer's classification of the work
- A one-page capability statement written for a technical buyer, not a marketing audience
- Three or four pre-scoped, fixed-price offerings priced under $15,000 that a cardholder can buy without a meeting
- A second tier of offerings priced between $25,000 and $350,000 for the small-business-reserved band
- Direct relationships with program staff and data owners, not only with contracting officers
- An acceptance-evidence habit: signed statements, artifacts, and agreed metrics captured at delivery
- Awareness of end-of-fiscal-year timing, when small unobligated balances need a place to go
The offerings list is the piece most firms skip. A buyer with $14,000 and a September deadline is not going to design a project with you. They are going to buy something that already has a name, a scope, and a price. Publishing three such things and being findable is most of the work.
Where this lane stops
Simplified acquisition procedures are a door, not a destination. Above $350,000 the full machinery comes back: formal source selection, evaluation factors, CPARS, and the timelines that go with them. The commercial exception at FAR 13.500(a) stretches simplified procedures to $9 million for certain commercial products and services, which is a real and underused path for software sold as a commercial item, but it is the buyer's election, not yours.
The point of the band is sequence. A firm that has delivered three small awards on time, with artifacts and named references, walks into a larger competition with something to say. A firm that has spent the same year chasing a $40 million vehicle walks in with a deck. Precision Federal builds AI, data, and software systems for federal, state, and commercial customers, and we structure first engagements to fit these thresholds deliberately, because the fastest route to a serious program of record usually runs through a small, well-executed award nobody else bothered to bid.
Frequently asked questions
$15,000, effective for acquisitions on or after October 1, 2025, under FAR 2.101. It was $10,000 before that. Variants apply for acquisitions supporting contingency operations: $25,000 inside the United States and $40,000 outside it.
$350,000, also effective October 1, 2025, under FAR 2.101. It matters because FAR 19.502-2(a) automatically reserves acquisitions above the micro-purchase threshold and not over the simplified acquisition threshold exclusively for small business concerns when two or more responsible small firms are expected to compete.
No. FAR 13.203 allows award without soliciting competitive quotations if the contracting officer or appointed purchaser considers the price reasonable. The same section directs that micro-purchases be distributed equitably among qualified suppliers, which is why buyers rotate vendors.
Often not. FAR 5.101(a)(1) requires a synopsis on SAM.gov only for proposed contract actions expected to exceed $25,000. Below that, publicity is minimal or absent, so these buys are found through direct relationships with the offices that have the requirement.
Not automatically. CPARS evaluations are required for contracts and orders exceeding the simplified acquisition threshold under FAR 42.1502(b), so sub-threshold work produces no government record. Capture your own evidence at delivery: a signed customer statement, the artifact, and an agreed acceptance metric. Agencies may consider past performance information from sources other than CPARS.