GOVERNMENT PURCHASING THRESHOLDS
Why are government purchasing thresholds important? How can these purchasing thresholds as defined in the Federal Acquisition Regulations (FAR) be leveraged to inform your sales strategy as we approach the end of the federal fiscal year? Let’s start by looking at the federal micro-purchase threshold (MPT). The micro-purchase threshold was increased last year from $3,500 to $10,000. A purchase can be made by a federal agency using the micro-purchase limit without soliciting competitive pricing as long as the price is considered reasonable by the contract officer. It is the perfect way to position a pilot, limited use offering, or even a training class. Many times, the purchase is made with a procurement card or PCARD.
If your technology can’t be offered in a way that would fit below the micro-purchase threshold, then the next best option is the simplified acquisition threshold (SAT) which is now $250,000. This is typically a small business set-aside contract with a very streamlined acquisition process. The federal agency will most likely ask for multiple market survey price quotes to determine price reasonableness and then leverage an existing contract vehicle like the GSA IT-70 schedule to request formal price quotes. This approach allows the government to satisfy the requirement for competition and minimizes the need to negotiate terms and conditions. This SAT acquisition typically is completed in weeks rather than months.
Both threshold purchasing limits should be leveraged as a way to accelerate your sales opportunities especially as we approach the end of the fiscal year.