Increased Competition Thresholds Effective October 1, 2025

This has been a whirlwind of a year in changes in grants, and now, with the beginning of the new federal fiscal year, it is time for changes in the Federal Procurement Standards. Effective October 1, 2025, federally funded procurements of goods or services are subject to two key threshold increases:

• The Micro-Purchase Threshold (MPT) has increased from $10,000 to $15,000.

• The Simplified Acquisition Threshold (SAT) has increased from $250,000 to $350,000.

See OMB et al., Final Rule, Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds, 90 Fed. Reg. 41872 (Aug. 27, 2025).

These adjustments directly affect the competitive procedures federal grantees are required to implement by the Federal Procurement Standards in 2 C.F.R. §§ 200.317–200.327 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (“Uniform Guidance”).

Micro-Purchase Threshold (MPT)

Section 200.320 of the Uniform Guidance sets forth the level of competition required for federally-funded procurements based on the dollar value of the goods or services to be purchased.  Procurements valued at or below the MPT may be awarded without soliciting price or rate quotations. 2 C.F.R. § 200.320(a)(1). The definition of MPT in the Uniform Guidance is pegged to the MPT set forth in the Federal Acquisition Regulation (“FAR”) at 48 C.F.R. Part 2, Subpart 2.1.  See 2 C.F.R. § 200.1 (Defining Micro-purchase threshold). OMB’s final rule cited above, which increases the MPT in the FAR from $10,000 to $15,000, therefore applies automatically to procurements under the Uniform Guidance, and means grantees have the authority to amend their current Procurement Policies to increase their MPT in grant-funded procurements to up to $15,000.

Moreover, the Uniform Guidance requires grantees to conduct informal procedures, consisting of solicitation of price or rate quotations (“bids”) “from an adequate number of qualified sources,” in federally-funded procurements that exceed the MPT but cost no more than the Simplified Acquisition Threshold. 2 C.F.R. § 200.320(a)(2).

Simplified Acquisition Threshold (SAT)

For procurements above the MPT but at or below the SAT, 2 C.F.R. § 200.320(a)(2) requires informal procedures—specifically, solicitation of bids “from an adequate number of qualified sources.” Procurements above the SAT require more formal processes, such as publicized Requests for Proposals (RFPs) or Invitations for Bids.

The Uniform Guidance similarly ties the SAT definition to the FAR. With the FAR’s increase from $250,000 to $350,000, grant-funded procurements automatically follow suit. Grantees may therefore revise their procurement policies to set their SAT at $350,000.

As with the MPT, the SAT definition in the Uniform Guidance is pegged to the SAT set forth in the FAR.  § 200.1 (Defining Simplified acquisition threshold).  Thus, the increase in the SAT in the FAR from $250,000 to $350,000 will apply automatically to grant-funded procurements and means grantees may amend their Procurement Policies to increase their SAT in grant-funded procurements to up to the new $350,000 threshold.

Key Takeaway for Grantees

Purchases of goods or services up to $15,000 may now be made without soliciting competitive quotes, and streamlined procurement methods may be used for purchases up to $350,000.

Feldesman attorneys are closely monitoring this breaking development in Federal Procurement Standards and their implications for federal grantees.  If you have questions, please contact Ted Waters or Phillip Escoriaza.

For the latest, join Feldesman’s Procurement Standards Under the Uniform Guidance webinar on October 23, 2025 at 1 p.m. ET.