Acquisition Policy

Agencies initiate emergency acquisition authorities

The Defense Department raised its threshold for 8(a) sole source contracts to $100 million as required by the 2020 Defense authorization bill. While not related...

Jason Miller@jmillerWFED

March 20, 2020 1:36 pm

3 min read

At least four agencies have implemented emergency acquisition authorities to make it easier to award contracts to support coronavirus relief efforts.

The General Services Administration, the Department of Veterans Affairs and the IRS raised the micro-purchase threshold (MPT) and the simplified acquisition threshold (SAT) in the last week.

The Defense Department on March 17 raised the threshold for sole source 8(a) contracts to $100 million as required under the 2020 Defense authorization bill.

This is a huge increase, given typically the threshold for 8(a) contracts at DoD has been $22 million.

Congress increased the threshold for the first time since 2015.

For the rest of the government, the 8(a) sole source threshold is $7 million for manufacturing requirements or $4 million for all other requirements.

While the change across DoD may not be related to the coronavirus release, the timing is important.

Agencies are receiving billions of dollars from Congress for coronavirus response and will need help spending it.

To that end, GSA, VA and the IRS raised their MPT and SAT to accelerate the time it takes to make awards as these approaches require less regulatory and policy compliance.

All three agencies raised their thresholds for purchases made in the U.S., while only GSA and IRS increased the thresholds for purchases made outside the U.S.

The micro purchase threshold is increased to:

$20,000 in the case of any contract to be awarded and performed, or purchases to be made, inside the United States; and
$30,000 in the case of any contract to be awarded and performed, or purchase to be made, outside the United States.

The simplified acquisition threshold (SAT) is increased to:

$750,000 for any contract to be awarded and performed, or purchase to be made, inside the United States; and
$1.5 million for any contract to be awarded and performed, or purchase to be made, outside the United States.

The threshold for simplified procedures for certain commercial items, is increased to $13 million for certain commercial items used to support contingency operations or a major disaster or emergency.

“The government is responding pretty quickly to the requirements that folks have,” said Eric Crusius, a partner with Holland & Knight in McLean, Virginia during a recent webinar. “Those are substantial raises of those limits and reflect the fact that government is trying to buy goods and services very quickly and with minimal heartache.”

All of these thresholds say in place through June 30 or July 1.

“The threshold increases are specific only to support the designated National Emergency COVID-19,” wrote Angela Billups, VA’s executive director in the Office of Acquisition and Logistics and senior procurement executive, in the memo to agency contracting offices. “FAR Part 6 also provides the opportunity to expedite purchases after justifying exceptions to competition. There may also be opportunities to use existing contracts by negotiating bilateral modifications to allow for additional quantities of goods or a surge for services included in current awards.”

Additionally, the Federal Acquisition Regulations Council set up a new code (P20C) to track acquisition costs for coronavirus response in the Federal Procurement Data System.

Jeff Koses, GSA’s senior procurement executive, reminded agency contracting officers in a March 14 memo, that market research remains important and because this is a national emergency versus a localized one, local set-aside rules do not apply.

He said there are five exceptions that would let agencies restrict or limit competition. These include phoning a “reasonable number” of vendors and getting quotes on the spot and agencies must keep the period of performance “brief.”

These changes in the MPT, SAT and other acquisition authorities preceded the White House’s decision to invoke the Defense Production Act, which gives certain agencies the power to move to the front of the line for specific products or services related to coronavirus relief efforts.

GSA additionally is warning contracting officers to be aware of possible fraudulent companies claiming to be schedule holders and price gouging.

“If a supplier claims to be a GSA vendor, please verify by checking prices and details on GSA Advantage or validate the contract number and supplier details on GSA eLibrary vendor database. Even if information seems credible, take a moment to verify,” GSA wrote on its interact page.