On June 20, the Office of Management and Budget (OMB) released a memo on new thresholds for micro-purchases and small purchases under the Uniform Grant Guidance. The OMB memo dramatically increased these thresholds, which should simplify purchase processes for not-for-profit organizations receiving federal funds.

The micro-purchase threshold increased from $3,000 to $10,000. Purchases of supplies or services that fall under the micro-purchase threshold do not require a competitive bidding process so long as the purchases are considered reasonable. Organizations may also request for a higher micro-purchase threshold from the federal agency supplying the grants so long as the organization has clean single audit findings or has adequate risk assessments for its purchases.

Also increased is the Uniform Grant Guidance's simplified acquisition threshold, or the threshold for "small purchases." Previously, the Uniform Grant Guidance had set the simplified acquisition threshold at $150,000. Effective immediately, the small purchase threshold is $250,000. Purchases that meet the simplified acquisition threshold follow a streamlined competitive bid process, one that requires an "adequate" number of bids (read: more than one). The streamlined process also leaves it up to the organization to determine how bids are received, such as orally, written or through an online search for prices.

Changes to the purchase thresholds come as part of the National Defense Authorization Acts (NDAA) and apply to organizations that receive grants and undertake cooperative agreements from federal agencies. Prior to the OMB's memo, timing for the increased Uniform Grant Guidance thresholds had been a little murky. OMB's June 20 memo clarified that organizations can use the higher thresholds immediately and revisions to the Federal Acquisition Regulation 48 C.F.R. Subpart 2.1 and the Uniform Grant Guidance will follow.

For more information, including any comments, questions or concerns, please contact Michelle Sylvia Spriggs of MHM's Professional Standards group at mspriggs@cbiz.com or 774.206.8336.

Published on July 11, 2018