Sneak Preview: New Fiscal Year Brings Changes to Procurement Thresholds, HHS Rules
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) Two key changes affecting federal financial assistance programs took effect on Oct. 1 — the beginning of federal fiscal year 2026 — an increase in the micro-purchase threshold (MPT) and simple acquisition threshold (SAT), along with the Department of Health and Human Services’ (HHS) full transition to comply with the uniform guidance (2 C.F.R. Part 200) and its specific conditions at 2 C.F.R. Part 300.
The Office of Management and Budget issued a final rule on Aug. 27 adjusting the acquisition-related thresholds under the Federal Acquisition Regulation (FAR) due to inflation. The rule increased the MPT from $10,000 to $15,000, while the SAT rose from $250,000 to $350,000, effective Oct. 1.
The SAT, as per the uniform guidance definition in subpart A, is the dollar threshold below which a recipient or subrecipient may purchase property or services using small purchase methods (§200.320(a)) The threshold for procurement activities under a federal award is based on the FAR at 48 C.F.R. Subpart 2.1. Recipients and subrecipients are responsible for determining an appropriate SAT based on internal controls, a risk evaluation and their documented procurement procedures, and they should determine if local government laws apply. However, in no circumstances can this threshold exceed that which is established in the FAR (see ¶444 in the Federal Grants Management Module).
Procurements using the micro-purchase method are restricted to an aggregate amount that does not exceed the MPT. According to the micro-purchase definition in subpart A of the uniform guidance, a micro-purchase is one in which the aggregate amount does not exceed the MPT, which is not to exceed the amount established in the FAR, unless a higher threshold is requested by the recipient or subrecipient and approved by the entity’s cognizant agency for indirect costs.
Recipients and subrecipients using the MPT procurement method do not have to solicit competitive price or rate quotes if they consider the price reasonable based on research, experience, purchase history or other information, and documents its files accordingly (§200.320(a)(1)(ii)).
Simplified acquisition procurements are relatively straightforward procedures for purchasing goods, services and supplies, the aggregate dollar amount of which is higher than the MPT but does not exceed the SAT. Under these procurements, recipients and subrecipients must obtain price or rate quotations from an adequate number of qualified sources. Unless specified by the federal funding agency, the recipient or subrecipient may determine what number is accurate. These procurements do not need to follow a formal bid process to be competitive (§200.320(a)(2)).
(The full version of this story has now been made available to all for a limited time here.)
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