DATE: August 17, 2020

SUBJECT: Micro-purchase threshold and the simplified acquisition threshold

TO: HCAs/Procurement Directors/Contracting Officers
FROM: Director, Contract and Financial Assistance Policy Division, Office of Policy, Office of Acquisition Management


Notwithstanding the Federal Acquisition Regulation finalization that increases the micro-purchase threshold for supplies from $3,500 to $10,000 and the simplified acquisition threshold from $150,000 to $250,000, existing purchase card limits are not raised. Furthermore, new cardholders must not receive these higher limits.

Consistent with the Acquisition Certifications Program Handbook, the Heads of Contracting Activity’s (HCA) decision to increase cardholder or Contracting Officer warrant thresholds for an individual must take into consideration the total number of active warrants/cardholders, their dollar amounts, and anticipated workload. A HCA’s decision to provide higher thresholds for individuals should include a documented determination that there is a valid need for the cardholder to possess such authority and the cardholder has the necessary skills, knowledge and business acumen to purchase under the new threshold.

It should also be noted that Acquisition Guide Chapter 13.301, Purchase Card Policy and Operating Procedures (Procedures), requires that periodically, but not less than annually, the number of purchase cards and credit limits be reviewed. Credit limits must be decreased if a cardholder’s historical spending level does not meet 75% of the credit limit in the past year. Unless there is written justification for the variance from the Approving Official, the Organizational Program Coordinator must lower the credit limits. If a purchase card is unused for at least six months the card must be deactivated, unless being held for emergency situations (e.g., Continuity of Operations purposes (COOP)). Local COOP plans should identify the individuals with cards being held for emergency situations.

The policy in this Flash remains in effect until the update of the Procedures.

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