How the GSA’s Acquisition Overhaul Could Affect Small Business Contractors

Source:SCHWABE

The General Services Administration (GSA) has released a series of legislative proposals that have been transmitted to Congress as part of the revision and rewrite of the Federal Acquisition Regulations. The intent of the proposed changes is to revise federal acquisition statutes to, in the eyes of GSA, promote efficiency in federal contracting. These changes would not come into effect until and unless enacted by Congress.

There are several potential effects on small business contractors contained in the proposals.

Purchasing Threshold Increases

The proposed changes would significantly increase purchasing thresholds:

Simplified Acquisition Threshold (SAT): Increases from $250,000 to $10 million (phased over five years) for commercial products/services.

Micro-purchase Threshold: Increases from $10,000 to $100,000 (phased over five years)

Simplified Acquisition Procedures (SAP): Increases from $5 million to $50 million for commercial items

Notably, while the SAT would be increased to $10 million, the requirement in the Small Business Act (15 USC § 644) to reserve small business contracts between the micro-purchase threshold and the SAT would not apply to this increase in the SAT. The statutory requirement to set aside small business contracts would be limited to contracts between the micro-purchase threshold and $250,000.

This could have the result of more contracts in the $250,000 to $10 million range being awarded to large businesses, as opposed 8(a) or small business contractors, due to a reduction in the level of authorization needed to make a non-competitive award.

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