The 2017 National Defense Authorization Act will increase the DoD’s micro-purchase threshold to $5,000.
Under the conference bill recently approved by both House and Senate, the DoD’s micro-purchase threshold will be $1,500 greater than the standard micro-purchase threshold applicable to civilian agencies.
A micro-purchase is an acquisition by the government of supplies or services that, because the aggregate is below a certain price, allows the government to use simplified acquisition procedures without having to hold a competition, conduct market research, or set aside the procurement for small businesses. In other words, if the price is low enough, the agency can buy it at Wal-Mart using a government credit card, without running afoul of the law.
Although there are many different thresholds, the FAR puts the general micro-purchase threshold at $3,500. But Section 821 of the proposed 2017 NDAA will add a new section to chapter 137 of title 10 of the United States Code giving the DoD its own micro-purchase threshold of $5,000.
It may not sound like much, but that’s nearly a 43% increase from the current micro-purchase threshold (and the threshold that will remain applicable to most agencies). Although DoD procurement officials will undoubtedly enjoy their new flexibility, some small contractors may not be so pleased–after all, once the micro-purchase threshold applies, there is no mandate that the government use (or even consider) small businesses.
2017 NDAA: The National Defense Authorization Act for Fiscal Year 2017 has been approved by both House and Senate, and will likely be signed into law soon. It includes some massive changes as well as some small but nevertheless significant tweaks sure to impact Federal procurements in the coming year. For the next few days, SmallGovCon will delve into the minutia to provide context and analysis so that you do not have to. Visit smallgovcon.com for the latest on the government contracting provisions of the 2017 NDAA.