FAR Council Proposes Game-Changing Updates to Federal Procurement Thresholds to Boost Small Business Opportunities
Washington, D.C. — In a groundbreaking move to modernize the federal procurement landscape, the Federal Acquisition Regulation (FAR) Council has proposed significant increases to acquisition-related thresholds, designed to reflect inflation and expand access for small businesses. This initiative, open for public comment until January 28, 2025, could have a profound impact on federal contracting practices and small business participation.
The updates propose:
• Micro-Purchase Threshold (MPT): Increase from $10,000 to $15,000
• Simplified Acquisition Threshold (SAT): Increase from $250,000 to $350,000
• Sole Source Thresholds for Small Business Programs:
o 8(a), HUBZone, SDVOSB, WOSB: Increase from $4.5 million to $5.5 million
o Manufacturing: Increase from $7 million to $8.5 million
These adjustments aim to align federal procurement thresholds with current economic realities while strengthening the role of small and disadvantaged businesses in federal contracting. With higher thresholds, small businesses will gain more opportunities to secure contracts, reduce administrative burdens, and expand their ability to deliver high-quality goods and services to the government.
“These changes are more than just numerical adjustments,” said Lamont Norwood is President and Chief Executive Officer of Strategic Government Solutions LLC. (SGS). They represent a strategic shift towards efficiency, equity, and accessibility in federal procurement. By increasing these thresholds, we’re ensuring that small businesses—especially those in underserved communities—continue to have a fair shot at competing for federal opportunities.”
Key Impacts of the Proposed Updates:
1. Increased Small Business Participation: Higher sole source thresholds mean fewer barriers for small and disadvantaged businesses, including those in the 8(a), HUBZone, Service-Disabled Veteran-Owned Small Business (SDVOSB), and Women-Owned Small Business (WOSB) programs.
2. Streamlined Contracting Processes: Adjusted MPT and SAT thresholds will simplify procurement for contracting officers, improving efficiency while still maintaining accountability.
3. Economic Modernization: Inflation adjustments will bring acquisition practices in line with today’s market conditions, fostering a more competitive and sustainable procurement environment.
Federal procurement professionals, small business stakeholders, and industry leaders are encouraged to review and provide feedback on these proposed changes. The FAR Council is accepting public comments until January 28, 2025, via regulations.gov.
“This is a win-win scenario for federal agencies and small businesses alike,” added Lamont Norwood. “By updating these thresholds, we’re modernizing the system while ensuring equity and opportunity remain at the forefront of federal procurement.”
