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1 [1] (October 1, 2025)

handle is hein.crs/govestn0001 and id is 1 raw text is: Congressionol Research Service Inlorming the IegisI9tive debate since 1914 October 1, 2025 Acquisition Thresholds for Small Business Contractors In federal government procurement, certain dollar amounts, or acquisition thresholds, determine whether some procurement policies apply. A contract's dollar value relative to certain acquisition thresholds may determine whether and to what extent contracting preferences for small businesses are used (e.g., whether a contract is set aside for small businesses or made as a sole-source award). Congress has established and modified acquisition thresholds through legislation, in addition to specifying a process for their regular adjustment for inflation. This In Focus explains the major acquisition thresholds important for small business contracting programs and policies. fintion of an Acqu st on Thresho I An acquisition threshold is a dollar value at which procuring agencies implement various contracting procedures, requirements, or restrictions. Two examples include the simplified acquisition threshold (SAT) and the micro-purchase threshold (MAT). Purchases below the SAT can be made through simplified acquisition procedures outlined in Part 13 of the Federal Acquisition Regulation (FAR), while purchases below the MAT can be made via a government purchase card. These thresholds vary depending on the type of acquisition and the circumstances under which an acquisition is made. For instance, the SAT and MAT are higher for acquisitions that support contingency operations or facilitate defense against certain attacks. Selected thresholds affecting small business acquisitions and federal contracting programs for small businesses are described below. Simp ified Acquisition Threshold The general SAT is currently set at $350,000, per the most recent inflationary adjustment on October 1, 2025. The SATs for purchases that support contingency operations or facilitate defense against certain attacks are currently $1 million and $2 million, respectively. The SAT for commercially available off-the-shelf (COTS) items is currently $9.5 million. When a contract award's value is expected to be above the MAT (currently set at $15,000) and beyond the limit for purchase cards but beneath the SAT, an agency must award the contract to a small business unless the contracting officer determines there is not a reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery (15 U.S.C. §644(j)(1); 48 C.F.R. §19.502-2(a)). This policy is known as the Rule of Two. For contracts above the SAT, regulations stipulate that agencies must also generally set aside contracts exclusively for small businesses, as long as a contracting officer expects that offers will be obtained from at least two responsible small businesses and the award will be made at a fair market price (48 C.F.R. §19.502-2(b)). This is a regulatory Rule of Two that is not statutorily mandated. It stems from the Small Business Act's directive to ensure a fair proportion of federal contracts are made to small businesses (15 U.S.C. 644(a)(1)(C)). Regulations (48 C.F.R. §19.203(c)) also state that before making a small business set-aside for acquisitions above the SAT, a contracting officer must first consider an acquisition for the small business socioeconomic contracting programs-i.e., contracting programs for certain types of small businesses, such as businesses located within a Historically Underutilized Business Zone (HUBZone), service-disabled veteran-owned small businesses (SDVOSBs), women-owned small businesses (WOSBs), and 8(a) Program participants. Sole-Source Award Limits Agencies may make sole-source awards to certain types of small businesses subject to certain acquisition thresholds that generally range from $5.5 million to $8.5 million. Table I. Sole-Source Award Limitations Type of Small Sole-Source Statutes and Business Award Limit Regulations 8(a) Program $5.5 million ($8.5 Participanta million for manufacturing contracts) Alaska Native Corporation (ANC) or Indian Tribe- Owned 8(a) Native Hawaiian (NHO) 8(a) No limit, written justification required for contracts in excess of $30 million ($150 million for DoD contracts)b No limit for DoD contracts, written justification required for contracts in excess of $150 million 15 U.S.C. §637(a)(I 6)(A); 48 C.F.R. §19.805- I (a)(2) 15 U.S.C. §637 note; 48 C.F.R. §19.805- I (b)(2); 13 C.F.R. §I 24.506(b)(5) See P.L. 109-148, §8020, 119 Stat. 2702-03 (December 30, 2005); 48 C.F.R. §219.805-1 (b)(2)(A)- (B); 13 C.F.R. §I 24.506(b)(5)