The Simplified Acquisition Threshold Is $350,000 as of October 1, 2025

A change that can leave your written policy out of date

A finance manager at a grant-funded nonprofit opens the organization's procurement policy in November 2025. It says that anything above $250,000 requires a formal request for proposals. A new program contract is estimated at $300,000, and the board wants to know whether the informal quote process the staff used last year is still acceptable. Nobody is sure which number governs, and nobody has written down when the number changed.

That uncertainty is common after an inflation adjustment. The policy, the template, and the committee's memory all carry the old figure, while the federal rule has moved. A monitor reviewing the file later will want to see which threshold the organization applied and why.

This article explains what changed on October 1, 2025, what crossing the simplified acquisition threshold triggers under 2 CFR 200, and what to record so the file shows which rule you followed at the time.

What changed on October 1, 2025

The simplified acquisition threshold (SAT) rose from $250,000 to $350,000 effective October 1, 2025. The micro-purchase threshold rose from $10,000 to $15,000 on the same date. Both changes come from the FAR Council final rule in FAR Case 2024-001, published August 27, 2025 at 90 FR 41872.

The adjustment is routine. The final rule describes the governing statute, 41 U.S.C. 1908, as one that "requires an adjustment every five years of statutory acquisition-related thresholds for inflation." The definitions sit in FAR 2.101 (48 CFR 2.101), and 2 CFR 200.1 defines both the micro-purchase threshold and the simplified acquisition threshold by reference to the FAR at 48 CFR part 2, subpart 2.1.

Organizations with federal awards need to build the new thresholds into their procedures and policies. If your award was made before October 1, 2025, confirm with the awarding agency or pass-through entity which threshold applies to it.

Two cautions belong here. First, the FAR figures can change again; as of October 2026, FAR 2.101 on eCFR still shows $15,000 and $350,000, last changed October 1, 2025, so record the date you checked. Second, a local or state threshold may be lower than the federal one, and when both apply the stricter rule governs. Under 2 CFR 200.320, an entity sets its own simplified acquisition threshold based on internal controls, risk and documented procedures, and that figure "may be lower than, but must not exceed, the threshold established in the FAR."

How the simplified acquisition threshold sorts procurement methods

2 CFR 200.320 sets out three types of procurement method: informal, formal and noncompetitive. The informal methods are micro-purchases and simplified acquisitions. The formal methods are sealed bids and proposals. The threshold is the line between the informal and formal categories for most purchases.

The sorting works roughly as follows:

• At or below the micro-purchase threshold ($15,000 from October 1, 2025): under 2 CFR 200.320(a)(1)(ii), a micro-purchase may be awarded without soliciting competitive quotations if the entity considers the price reasonable based on research, experience, purchase history or other information, and keeps documents to support that conclusion.
• Above the micro-purchase threshold and at or below the SAT ($350,000): simplified acquisition, the informal method. The 2024 revision of the Uniform Guidance uses "simplified acquisition" in place of the older term "small purchase."
• Above the SAT: a formal method, either sealed bids under 200.320(b)(1) or proposals under 200.320(b)(2), plus the cost or price analysis discussed below.

Noncompetitive procurement is a separate track. It is not a function of dollar value alone, and it applies only in the circumstances the rule lists. The related article on 2 CFR 200.320 procurement methods covers those methods in more detail, and the piece on the micro-purchase threshold covers the lower line.

Note that the dollar value used for sorting is the value of the procurement, not the amount you expect to spend in the first year. How your organization estimates that value, including options and alternates, belongs in your written procedures. Confirm any aggregation question with your awarding agency or pass-through entity.

What crossing the threshold triggers

Once a procurement is expected to exceed $350,000, three obligations come into play for a federally funded purchase. Each should leave a trace in the file.

A formal method

You choose between sealed bids and proposals. Under 2 CFR 200.320(b)(1), sealed bids are publicly solicited, and a firm fixed-price contract goes to the responsible bidder whose conforming bid is lowest in price. Sealed bids are "preferred for procuring construction services."

Under 200.320(b)(2), proposals require public notice. The solicitation must identify all evaluation factors and their relative importance (200.320(b)(2)(i)), and proposals must be solicited from multiple qualified entities. The entity must also have written procedures for conducting technical evaluations and making selections (200.320(b)(2)(ii)). Under 200.320(b)(2)(iii), the award goes to "the responsible offeror whose proposal is most advantageous to the recipient or subrecipient considering price and other factors."

Qualifications-based selection, in which price is not a selection factor, can be used only for architectural and engineering professional services (200.320(b)(2)(iv)).

A cost or price analysis and an independent estimate

2 CFR 200.324(a) requires a cost or price analysis "for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold." The same paragraph says the recipient or subrecipient "must make independent estimates before receiving bids or proposals."

The rule places the estimate on the recipient itself, so it need not come from an outside firm. It is most useful when it is formed without the influence of anyone with a financial stake in the award and does not rest only on prospective vendors' pricing. The sequence matters because the estimate has to predate the offers. The article on the independent cost estimate under 2 CFR 200.324 walks through how to build one.

Because the threshold moved, a contract modification that was above $250,000 but is at or below $350,000 may no longer trigger the analysis requirement. Confirm that reading with your awarding agency before relying on it.

A record of the method and its basis

2 CFR 200.318(i) requires records detailed enough to show the history of each procurement. They must include the rationale for the procurement method, the contract type selection, contractor selection or rejection, and the basis for the contract price. For a procurement near the line, the method rationale is the element most likely to draw questions.

What to record so the file shows which rule applied

Rules change, and the Uniform Guidance itself was substantially revised effective October 1, 2024. A file that does not note the rule and its effective date cannot show which rule it followed at the time. A short entry in the solicitation record is usually enough.

For each procurement near the threshold, record:

1. The estimated value of the procurement and how it was derived.
2. The threshold you applied, its source (FAR 2.101 as adjusted by FAR Case 2024-001, or your own lower local figure), and its effective date.
3. The date of the federal award and the date the solicitation was issued, so a reader can see which side of October 1, 2025 each fell on.
4. The method chosen and the rationale under 200.318(i).
5. For procurements above the SAT, the date the independent estimate was completed, shown to be before offers were received.
6. The name and date of whoever confirmed the threshold with the awarding agency or pass-through entity, where you asked.

A worked example shows the point. Suppose an organization estimates a services contract at $320,000 under an award made on October 15, 2025. Under the FAR figure it is a simplified acquisition. Under a local policy that sets the SAT at $250,000, it is a formal procurement, and the stricter local limit governs. The file should state which figure was applied and why.

Written procedures matter here. 2 CFR 200.318(a) requires documented procedures for procurement under a federal award or subaward, consistent with state, local and tribal law and with 2 CFR 200.317 through 200.327. See written procurement procedures under 2 CFR 200 for how to update them.

Pending changes to watch

OMB published a proposed rule on May 29, 2026, titled "Regulation for Federal Financial Assistance" (91 FR 32198), that would revise the federal financial assistance guidance again. As of October 2026 it is proposed, not final, and no final rule has appeared in the Federal Register. Confirm the current status with your awarding agency before changing a policy in reliance on it.

Updating your policy and your file

Start with the policy text. Replace hard-coded dollar figures with a reference to the FAR definition plus an effective date, or note the date each figure took effect. Then review open procurements that straddle October 1, 2025 and note which rule each followed.

For readers who want a structured way to do this, the Procurement Method Selector workbook is designed to record the estimated value, the method chosen and the rationale in one place. It is available now on its store page. The RFPManagement evaluation workspace is likewise built to show the rule in force with its citation and effective date, and to keep a snapshot of the rule version used. To hear when it opens, join the waitlist; plan details will be on the pricing page.

RFPManagement records and computes. It does not give legal or procurement advice. The award decision stays with your organization.