Federal Contract Dollar Thresholds, Explained

Federal buying does not run on one process. It runs on several, and a dollar figure picks which one. Get the thresholds wrong and you will chase work through the wrong door, or miss the band where your odds are best.

Two of the three numbers changed in October 2025. A lot of the internet has not caught up. While researching this post, I hit guides still printing $250,000 and $10,000 as current. One of them had been updated this year.

The three numbers that matter

Threshold	Amount	What changes above it
Micro-purchase	$15,000	Below this, a government card holder can just buy it. No competition required.
Publicizing	$25,000	The action generally must be posted publicly on SAM.gov.
Simplified acquisition	$350,000	Above this, the full competition machinery applies, with a 30-day minimum response time.

What the micro-purchase threshold means for you

Below $15,000, a federal employee with a purchase card can buy from you directly. No solicitation, no proposal, no notice on SAM.gov. The FAR does not require competition at all.

This is the least visible federal market and the easiest to enter. It is also invisible to anyone watching SAM.gov, because these purchases never appear there.

The threshold is lower for two kinds of work:

• $2,000 for construction subject to Wage Rate Requirements (40 U.S.C. chapter 31, subchapter IV)
• $2,500 for services subject to Service Contract Labor Standards (41 U.S.C. chapter 67)

It goes the other way for emergencies. For contingency, defense, disaster, and emergency acquisitions it is $25,000 inside the United States and $40,000 outside it. Institutions of higher education and nonprofit research organizations start at $15,000 and an agency head may set it higher.

Why $25,000 is the threshold that decides what you can see

Proposed contract actions expected to exceed $25,000 generally have to be published on SAM.gov, the Governmentwide Point of Entry. Below that, agencies may post voluntarily and often do not.

The practical consequence: the absence of a notice does not mean the work was never bought. If your services sell for less than $25,000 a pop, monitoring SAM.gov is close to useless and your route in is building relationships with small-purchase buyers directly.

The band where small businesses actually win

Here is the rule most people in this market do not know, and it is the single most useful thing on this page.

Acquisitions above the micro-purchase threshold but not over the simplified acquisition threshold are set aside for small business by default. FAR 19.502-2(a) says such an acquisition shall be set aside for small business unless the contracting officer determines there is no reasonable expectation of obtaining offers from two or more responsible small business concerns that are competitive.

So the $15,000 to $350,000 band is reserved for you unless the government affirmatively decides it cannot get two competitive small business offers. That is a default in your favor, and it covers a wide range of real service work.

Above $350,000, the set-aside is not automatic. FAR 19.502-2(b) still requires a set-aside when offers are expected from at least two responsible small business concerns and award can be made at fair market prices, but the determination is live rather than presumed.

This is the rule of two, and it is why responding to Sources Sought notices matters so much. Those responses are the evidence a contracting officer uses to decide whether two competitive small businesses exist. Three firms answering a Sources Sought can turn a full-and-open competition into a set-aside.

What changes above the simplified acquisition threshold

Crossing $350,000 changes the clock and the paperwork. Under FAR 5.203(c), you get at least 30 days from solicitation issuance to the proposal due date. Research and development gets at least 45 days. Commercial products and services are excepted from both, which is why a commercial buy can land with two weeks on it no matter the size.

Below the threshold, the government uses simplified acquisition procedures, and response time is whatever the contracting officer considers reasonable given complexity, commerciality, availability, and urgency. There is no minimum.

Faster process, lower ceiling, better default odds. That is the tradeoff of the simplified band.

The exceptions that are bigger than the rule

The simplified acquisition threshold is $350,000 in normal circumstances. For contingency, defense, disaster, and emergency acquisitions it is $1 million inside the United States and $2 million outside it. For humanitarian or peacekeeping operations outside the United States it is $650,000.

There is also a commercial products and services test program that allows simplified procedures up to $9 million, or $15 million for certain acquisitions described in FAR 13.500(c). If you sell commercial services, that program is worth understanding, because it means a multi-million dollar buy can run on the fast process.

Why the stale numbers are a real problem

The thresholds are adjusted for inflation every five years by statute. The FAR Council issued the final rule on August 27, 2025, effective October 1, 2025. The next adjustment is not due until roughly 2030, so today's numbers are stable.

That stability is exactly why stale guides are dangerous. A page that says $250,000 looks authoritative and stays wrong for five years. If you are sizing a pipeline or deciding whether a requirement falls in the small business band, check FAR 2.101 directly. It is the definition of record and it takes ten seconds.

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Sources. Threshold definitions from FAR 2.101. Set-aside defaults and the rule of two from FAR 19.502-2. Response times from FAR 5.203. Commercial test program ceiling from FAR 13.003. All current as of FAC 2026-01, effective March 13, 2026. Effective date of the threshold increase per Pillsbury's summary of the FAR Council inflation rule. Verified October 14, 2026.