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When a government agency has a need for a product or service, the dollar amount determines how they go about procuring it. One of the most important of these benchmarks is the Simplified Acquisition Threshold (SAT) — the dollar amount under which agencies can use streamlined acquisition procedures to buy goods and services. These simplified methods are designed to reduce administrative burden and speed up procurement, which benefits contractors and agencies alike. Recently, a final rule was issued to raise the Simplified Acquisition Threshold from $250,000 to $350,000 to account for inflation. This is good news for contractors, especially small businesses.
This blog post defines the Simplified Acquisition Threshold (SAT), its purpose, its impact on small businesses, and what you should do when searching for opportunities within the set threshold.
What is the Simplified Acquisition Threshold (SAT)?
The Simplified Acquisition Threshold (SAT) ensures that government agencies are promoting fair competition. If a Contracting Officer (CO) wants to solicit a product or service between or above a certain dollar threshold, then they will need to go through a solicitation process and follow certain procedures.
In accordance with the Small Business Act, the federal government must provide maximum practicable opportunities to small businesses including Veteran-Owned Small Businesses (VOSBs), Service-Disabled Veteran-Owned Small Businesses (SDVOSBs), HUBZone small businesses, small disadvantaged businesses, and Women-Owned Small Businesses (WOSBs). The SAT helps achieve this goal—so let’s dive in.
Above the SAT
As of October 1, 2025, the SAT is currently set at $350,000—this means for contracts above $350,000 the federal government must solicit a Request for Proposal (RFP) such as GSA eBuy or SAM.gov, or send to as many contracts as possible. Generally, if it’s above the SAT, Simplified Acquisition Procedures (SAP) cannot be used unless market research and the nature of the supplies/services proves only commercial solutions will be used.
It's important to note that under the Revolutionary FAR Overhaul (RFO), FAR Part 13 will be renamed from "Simplified Acquisition Procedures" to “Simplified Procedures for Non-commercial Acquisitions”, and FAR Part 12 will now handle simplified procedures for commercial items.
Below the SAT
What’s important for contractors to understand, especially small businesses, is what happens when a contract is BELOW the SAT, but ABOVE the Micro-Purchase Threshold (MPT), which was recently raised to $15,000. Anything below $15,000 does not require agencies to go through many hoops, and government buyers can use a Government Purchase Card to secure supplies/services. This is where sites like GSA Advantage! come in.
It’s what is between $15,000 and $350,000 that we want to pay attention to. In this area, the FAR (currently Part 13 but soon to be 12) states that contracts must be set aside for small businesses. Simplified Acquisition Procedures are used in this range as well, meaning the acquisition process is streamlined but competition must still be considered. Generally, Contracting Officers must:
- Prepare a scope of work and establish evaluation criteria if applicable
- Give preference to small businesses
- Seek a price reduction
- Perform market research for a minimum of 3 contractors that may fulfill their desired need through the GSA Advantage! website, OR
- Review at least 3 contractor price lists found in eLibrary, OR
- Request quotations for at least 3 GSA Schedule contractors
Now that you have familiarized yourself with the basic structure of this threshold, you may be wondering how your business may fit into all of this. Well, if you’re a small business you want to make sure you qualify and are taking advantage of all the opportunities.
The Government's Definition of a “Small Business”
If you are considering pursuing an opportunity that falls below SAT, it's important to ensure that your company fits the criteria for being designated as a small business. This can be done by researching guidelines known as size standards. Size standards are typically determined by either average annual receipts or the number of employees.
Size can be based on average gross annual receipts over the past three years. This average depends on your primary North American Industrial Classification System (NAICS) Code. If your average annual receipts fall below the specified amount for that NAICS Code, your business is considered small. The number of employees is also another determining factor used in place of annual receipts.
How the SAT Increase Impacts Government Contractors
The increase to the Simplified Acquisition Threshold is a positive thing fir federal contractors, especially small businesses. By raising the ceiling on what qualifies for simplified procedures, the government is expanding the pool of opportunities that can be awarded more quickly and with less administrative burden. This means fewer lengthy solicitations, lighter compliance requirements, and a greater likelihood that contracts will be set aside for small and disadvantaged businesses.
The rise also opens the door for newer vendors who might not yet have the resources or past performance needed for larger, more complex procurements. In other words, a higher SAT makes the federal marketplace more accessible for small businesses.
Are You Taking Advantage of Procurement Opportunities?
As mentioned above, the SAT increase will increase opportunities for your business, but you need to be positioned to take them on. Do you know where to find relevant contracting opportunities, and is your team prepared to respond to solicitations and market research?
If you want to learn more about contracting opportunities, check out these blogs:
If you have questions about becoming a small business contractor or need help understanding the world of government contracting, our consultants are here to help. From whatever stage you’re in from prospective to veteran contractor, we can help answer your questions and help your business succeed in the federal marketplace.
