TLDR
For 2026, FAR 2.101 sets the general micro-purchase threshold at $15,000 and the simplified acquisition threshold at $350,000. For federal grant recipients, 2 CFR 200 uses those FAR figures as ceilings: your policy, state rules, pass-through terms, or award conditions can set a lower threshold, and your internal threshold must not exceed the FAR ceiling unless a higher micro-purchase threshold is properly documented or approved.
Federal Procurement Thresholds 2026: Micro-Purchase and SAT Rules
As of 2026, the current federal micro-purchase threshold is generally $15,000 and the current simplified acquisition threshold is $350,000 under FAR 2.101 in 48 CFR part 2, after threshold changes effective October 1, 2025. For federal grant recipients, 2 CFR 200.1 points to the FAR ceilings and 2 CFR 200.320 allows a documented lower threshold, plus limited higher micro-purchase options. Use this page with the grant compliance checklist before charging a purchase to a federal award.
The dollar amount is the starting point, not the whole procurement decision. A nonprofit still has to check its own written policy, state procurement rules, pass-through requirements, award terms, and any approved threshold documentation before choosing the method for a specific purchase.
Current Threshold Summary
| Threshold | 2026 dollar limit | Method name |
|---|---|---|
| Micro-purchase | Up to $15,000 generally | Micro-purchase procedure |
| Small purchase / SAT | $15,001-$350,000 | Informal small purchase procedures |
| Formal competition | Over $350,000 | Sealed bids or competitive proposals |
| Sole source | Any amount | Noncompetitive procurement |
FAR 2.101 sets the general federal ceiling. Under 2 CFR 200, recipients and subrecipients must apply a threshold that fits their documented controls and must not exceed the FAR ceiling unless a higher micro-purchase threshold is allowed under 2 CFR 200.320.
That means two organizations can face different working thresholds for the same dollar amount. One may use the FAR ceiling. Another may have a board-approved procurement policy that still requires quotes at a lower amount, or a pass-through funder may require stricter documentation in the award terms.
Micro-Purchase: Up to $15,000 Generally
Micro-purchases do not require competitive quotations when the price is reasonable. That is a lighter procedure, but it is not a blank check.
Keep enough documentation to show:
- What was purchased and which award paid for it
- Why the price was reasonable
- Whether purchases were distributed equitably among qualified suppliers
- Which policy or award term controlled the threshold
The phrase “generally” matters. FAR 2.101 includes special lower micro-purchase thresholds for some acquisition categories, and federal award terms can be stricter than the baseline amount. For grant-funded nonprofit work, the practical control is simple: use the most restrictive applicable rule and keep the reason in the file.
Small Purchase: $15,001-$350,000
Small purchase procedures apply when the aggregate purchase value is above the controlling micro-purchase threshold and at or below the organization’s simplified acquisition threshold.
2 CFR 200.320 requires price or rate quotations from an adequate number of qualified sources. The regulation does not give a universal quote count. In practice, a clean file usually shows who was contacted, what price or rate each source offered, which vendor was selected, and why that selection was reasonable.
Useful small-purchase records include:
- Written or emailed quotes
- Vendor names and dates contacted
- Scope sent to each vendor
- Notes explaining any nonresponses
- Selection rationale
- Conflict-of-interest check or disclosure
If the purchase is grant-funded, attach these records to the grant or award file while the decision is fresh. Reconstructing quote history after an audit request is slower and easier to get wrong.
Over $350,000: Formal Procurement
Formal procurement applies when the aggregate purchase value exceeds the organization’s simplified acquisition threshold. The method depends on the purchase.
Sealed bids fit purchases where specifications are clear and award can be made primarily on price. Construction and commodity purchases often fit this method when the work can be described precisely.
Competitive proposals fit services, technology, consulting, and other purchases where qualifications, approach, and price all matter. The file should show the solicitation, evaluation criteria, proposals received, scoring or evaluation notes, and award rationale.
Public notice, adequate response time, documented evaluation, and a clear award decision matter more at this tier because the purchase is large enough to attract scrutiny from auditors, pass-through entities, and federal agencies.
Higher or Lower Thresholds
2 CFR 200.320 allows a recipient or subrecipient to self-certify a micro-purchase threshold up to $50,000 annually when it meets the regulation’s conditions and keeps the required documentation. A threshold above $50,000 requires approval from the cognizant agency for indirect costs.
That option should not be treated as automatic. The organization needs written procedures, documented reasoning, and a way to show that the higher threshold still fits its internal controls and procurement risk.
Lower thresholds are more common. A finance policy may require quotes above a smaller dollar amount, a state rule may control public funds, or a pass-through award may impose stricter procurement terms. When rules conflict, use the stricter threshold in the purchase file.
Do Not Split Purchases to Fit a Lower Method
Thresholds apply to the aggregate requirement. If one related purchase need is expected to cost $75,000, it should not be divided into five smaller invoices so each transaction appears to fit the micro-purchase method.
The same logic applies to services spread over several months or supplies ordered in phases for one project. Estimate the total related need, document the basis for that estimate, and choose the procurement method from that aggregate amount.
Procurement File Checklist
For each federal-award purchase, keep a short procurement file that answers four questions:
- Which threshold controlled the purchase?
- What procurement method was used?
- What evidence supports price reasonableness or competition?
- Why was the selected vendor allowable under the policy and award terms?
For micro-purchases, the answer may be brief. For small purchases, the file should include quotes and a selection note. For formal procurement, the file should preserve the solicitation, responses, evaluation, notices, and final award decision.
How GrantPipe Helps
GrantPipe keeps procurement evidence attached to the grant context instead of scattered across inboxes and folders. Finance and program staff can track purchase amounts, vendors, supporting files, and review status alongside the award record, which makes threshold checks easier to repeat before reports, reimbursement requests, and audit samples.
If procurement files are becoming a recurring compliance problem, start with the grant compliance checklist and then review how GrantPipe connects grant records, restricted funds, documents, and reporting on the grant compliance software page.
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Source: 2 CFR Part 200, Section 200.346
- Micro-purchase threshold
- The dollar ceiling for using micro-purchase procedures. The general 2026 FAR amount is $15,000, but a recipient's written policy, award terms, or pass-through requirements may require a lower amount.
DEFINITION
- Simplified acquisition threshold
- The ceiling for informal small purchase procedures. The 2026 FAR amount is $350,000, and 2 CFR 200.1 requires recipients and subrecipients to set their own documented threshold at or below that ceiling.
DEFINITION
- Small purchase procedures
- Informal procurement procedures for purchases above the micro-purchase threshold and at or below the organization's simplified acquisition threshold. Documentation normally includes price or rate quotations from qualified sources and a selection rationale.
DEFINITION
- Sealed bidding
- A formal procurement method for purchases above the simplified acquisition threshold when requirements are clear and award can be made to the lowest responsive, responsible bidder.
DEFINITION
- Competitive proposals
- A formal procurement method for purchases above the simplified acquisition threshold when technical merit, qualifications, approach, and price all factor into the selection.
DEFINITION
- Purchase splitting
- Breaking one related requirement into smaller transactions to fit a lower procurement method. Thresholds should be applied to the aggregate requirement, not to an artificial sequence of invoices.
DEFINITION
Q&A
What documentation is required at each threshold level?
Micro-purchase: document price reasonableness and equitable distribution among qualified suppliers. Small purchase: retain price or rate quotations from an adequate number of qualified sources, the vendor selected, and why the price was reasonable. Formal procurement: keep the solicitation, public notice evidence, responses, evaluation records, and award decision.
Q&A
Do 2 CFR 200 procurement thresholds automatically match FAR thresholds?
2 CFR 200 uses FAR thresholds as ceilings, but the operating threshold for a specific purchase may be lower. Check the organization's procurement policy, state rules, pass-through agreement, award terms, and any approved higher micro-purchase threshold before choosing the method.
Q&A
What happens if a purchase exceeds a threshold and proper competition was not conducted?
The cost can be questioned and may need to be repaid from non-federal sources. Repeated missing quotes, weak sole-source files, or purchase splitting can also lead to broader testing of the organization's procurement controls.
Frequently asked