Federal Acquisition Regulation Update for 2025
Effective October 1, 2025, the new Federal Acquisition Regulation (FAR) inflation adjustment rule requires acquisition thresholds to be adjusted every five years based on the Consumer Price Index. The goal is to maintain federal purchasing power and streamline procurement processes.
Why This Matters
Procurement rules are important – they help to ensure that federal funds are being spent responsibly and that purchases are properly documented and compliant. Updating thresholds to reflect rising costs due to inflation will reduce the administrative burden on purchases below the new threshold and allow faster processing without the need for competitive quotes. They also provide higher flexibility for urgent needs and shift compliance responsibilities.
Significant Changes to Thresholds
- Micro-Purchase Threshold (MPT): This increase from $10,000 to $15,000 allows more purchases without competitive quotes.
- Simplified Acquisition Threshold (SAT): This increase from $250,000 to $350,000 streamlines the process for mid-range purchases.
What to Do Next
Review your internal purchasing policies to align with the new thresholds and update staff training to ensure compliance with the new procedures. Review your grant agreements, contracts, planned budgets and bids with the new limits in mind.
Questions or concerns? We’re here to help. Contact your SMS or Roth&Co representative to understand how the newest updates and processes affect your organization.
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