The Simplified Acquisition Threshold: Where Small Business Contracts Live

The federal government expanded its small business contracting zone by $100,000 in October 2025, and most new contractors have no idea. That single threshold change means roughly 5,150 more contract actions per year now fall in the range where small businesses get first priority, per data published in the Federal Register (90 FR 68642).

Understanding the simplified acquisition threshold government contracting rules is the reason those contracts become available to you. If you’re a small business trying to break into federal work, this is the number you need to know.

What Is the Simplified Acquisition Threshold?

Below $350,000, federal agencies get to skip the heavy paperwork. The simplified acquisition threshold is that dividing line—the dollar amount below which agencies can buy goods and services using faster, simpler methods. As of October 1, 2025, that number is $350,000.

Before October 2025, the SAT was $250,000. Congress requires these thresholds to be adjusted for inflation every five years under 41 U.S.C. 1908. The last adjustment was in October 2020. The current one took effect October 1, 2025, through Federal Acquisition Circular 2025-06.

The next scheduled adjustment will happen in October 2030.

Why does this threshold exist? Congress created it for a practical reason: buying a $50,000 service contract should not require the same paperwork as buying a $50 million weapons system. The SAT draws the line between “keep it simple” and “follow the full procurement process.”

For small businesses learning simplified acquisition threshold government contracting rules, the SAT matters even more. Under the Federal Acquisition Regulation (FAR), contracts in this range are automatically set aside for small business competition. More on that in a moment.

Related: What Is Government Contracting? covers the basics of how federal procurement works. FAR Compliance for Small Business explains the regulations that govern these purchases.

The Threshold Ladder: How the Government Buys at Every Dollar Level

Federal procurement follows a dollar-amount ladder. Each rung changes the rules for how agencies buy and who gets to compete. Understanding this ladder is the single most important framework for a new contractor.

Tier 1: Micro-Purchase ($0 to $15,000)

No competition required. The government buyer can pick any qualified vendor and pay with a Government Purchase Card (GPC), which works like a corporate credit card.

You won’t find most of these transactions posted on SAM.gov. They happen fast and informally. A program manager needs office supplies, safety equipment, or a quick repair. They swipe the card.

The micro-purchase threshold increased from $10,000 to $15,000 on October 1, 2025, in the same regulation that raised the SAT. For a full breakdown of how these purchases work, read our Micro-Purchase Threshold Guide.

Tier 2: The SAT Zone ($15,001 to $350,000)

This is where it gets good for small businesses.

Contracts in this range use simplified acquisition procedures under FAR Part 13. That means less paperwork, faster timelines, and simpler evaluation methods. Contracting officers issue Requests for Quotation (RFQs) instead of full Requests for Proposal (RFPs). They can award based on a short quote rather than a scored, multi-volume proposal.

Here is the part that matters most: per FAR 19.502-2, acquisitions above the micro-purchase threshold but not over the SAT “shall be set aside for small business” unless the contracting officer determines there aren’t two or more qualified small firms to compete. That word “shall” makes this mandatory, not optional.

The simplified acquisition threshold government contracting zone is where most beginner-friendly contracts live.

Tier 3: Commercial Simplified ($350,001 to $9,000,000)

Simplified procedures are still available at this level, but only for commercial products and commercial services under FAR 13.5. The ceiling for this tier increased from $7,500,000 to $9,000,000 in October 2025.

The automatic small business set-aside goes away above $350,000. Instead, the contracting officer decides whether to set aside using the “Rule of Two”: if at least two small businesses can compete at fair market prices, the contracting officer should set aside the acquisition. But it’s discretionary, not mandatory.

Tier 4: Full Competition (Above $9,000,000)

Full FAR Part 15 negotiated procurement. Formal proposals, evaluation criteria, competitive ranges, and oral presentations. This is the territory of 200-page proposals, months-long evaluations, and significant bid and proposal costs.

Most new contractors aren’t ready for this tier. You don’t need to be. The SAT zone has more than enough work to build your business.

Tier	Dollar Range	Procurement Method	Small Business Rule
Micro-Purchase	$0 to $15,000	Government Purchase Card	No competition required
SAT Zone	$15,001 to $350,000	Simplified (FAR Part 13)	Automatic set-aside
Commercial Simplified	$350,001 to $9,000,000	Simplified for commercial only (FAR 13.5)	Rule of Two (discretionary)
Full Competition	Above $9,000,000	Full procurement (FAR Part 15)	Rule of Two (discretionary)

Related: Government Contract Set-Asides explains the full range of programs that reserve contracts for small businesses.

Why the Simplified Acquisition Threshold Government Contracting Zone Is Your Best Starting Point

Contracts between $15,000 and $350,000 are automatically reserved for small businesses, require simpler responses, and move faster than larger procurements. For a new contractor, this range offers four specific advantages.

1. The set-aside is automatic

Per FAR 19.502-2, the contracting officer must set aside acquisitions in this range for small business. They need a documented reason not to. This isn’t a preference or a goal. It’s a requirement written into the FAR.

That means when an agency needs a $75,000 IT support contract or a $200,000 facility maintenance job, small businesses get first priority by law.

2. Lighter proposal requirements

Under simplified acquisition procedures, there are no formal evaluation plans, no competitive ranges, and no scoring panels. A contracting officer can evaluate quotes based on price and technical capability without the elaborate process required for larger buys.

For you, that means your response to an RFQ might be five to 10 pages instead of 50 to 100.

3. Faster timelines

Simplified acquisitions typically move from posting to award in 30 to 60 days. Compare that with 90 to 180 days (or longer) for full competitions. Faster awards mean faster revenue and faster past performance credits.

4. Revenue adds up

The dollar amounts in the SAT zone might seem modest compared to the multimillion-dollar contracts you see in the news. But consider the math: 10 contracts at $35,000 equals $350,000 in annual revenue. Five contracts at $70,000 equals $350,000. A steady flow of SAT-range work can sustain and grow a small business.

The October 2025 threshold increase made this even better. Federal Register analysis shows that roughly 3,580 additional entities can now use the flexibilities of the higher SAT. That’s 3,580 more businesses competing in a zone designed for them.

Related: How to Start Government Contracting walks through five free actions you can take this week. How to Bid on Government Contracts covers the full proposal process.

Simplified Acquisition Methods: How Contracting Officers Buy Under the SAT

When a contracting officer needs to buy something under $350,000, they choose from a short list of methods. All of them share one trait: less paperwork for everyone involved.

Request for Quotation (RFQ)

The most common method for SAT-range purchases. The contracting officer posts the requirements and vendors submit quotes. An RFQ is not a formal proposal. It’s a price-and-capability response.

RFQs are shorter than Requests for Proposal (RFPs). The evaluation is simpler. The contracting officer reviews the quotes and awards to the vendor offering the best value, which isn’t always the lowest price.

Purchase Orders

A purchase order is a direct offer from the government to buy goods or services at a stated price. Purchase orders are common for supplies, straightforward services, and repeat buys. The vendor accepts the order and delivers.

Blanket Purchase Agreements (BPAs)

A BPA is an agreement between the government and a vendor for recurring needs. Think of it as an open account. The agency sets up the BPA once, then places individual orders against it over time.

Individual orders under a BPA cannot exceed the simplified acquisition threshold per FAR 13.303. BPAs are valuable because they create an ongoing relationship with an agency buyer. One BPA can generate steady work for months or years.

Government Purchase Card (GPC)

The GPC handles purchases at or below the micro-purchase threshold ($15,000). While not technically a SAT-range method, it matters because GPC purchases often lead to larger work. An agency that buys $5,000 worth of supplies from you on a purchase card may come back with a $50,000 RFQ.

Related: How to Find Government Contracts on SAM.gov shows you where these opportunities are posted and how to set up alerts.

How to Find and Win SAT-Range Contracts

SAT-range contracts are posted on SAM.gov alongside larger opportunities. Knowing how to filter for them gives you an advantage most beginners miss.

Finding SAT-range opportunities

Go to SAM.gov and search Contract Opportunities. Filter by dollar value: set the minimum to $15,000 and the maximum to $350,000. Add your NAICS codes (the industry classification numbers that describe your business) to narrow results to your area.

Look for notice types labeled “Combined Synopsis/Solicitation” or “Sources Sought.” Combined synopsis/solicitations are active opportunities you can bid on right now. Sources sought notices are market research: the agency wants to know who can do the work before they post a formal solicitation.

Set up saved searches with email notifications. New SAT-range opportunities post daily. If you check once a week, you’ll miss deadlines.

Positioning your business

Your SAM.gov profile is your storefront. Make sure it lists every relevant NAICS code. Keep your registration current. An expired SAM.gov registration means you cannot win any federal contract.

Prepare a one-page capability statement that highlights your relevant experience, NAICS codes, and certifications. You’ll send this when reaching out to agency Small Business Specialists.

If you sell commercial products, register on GSA Advantage. Contracting officers using simplified procedures are required to check GSA Advantage as part of their market research per FAR 13.003.

Responding to an RFQ

Read the entire solicitation. Even simplified ones have compliance requirements. Missing a single instruction (wrong file format, missing certification, late submission) can disqualify you.

Respond point by point. If the RFQ asks for three things, address all three in the order listed. Price competitively, but don’t undercut yourself to win. The government evaluates “best value,” not just lowest price.

Submit early. Late quotes are rejected. There are no exceptions.

Building relationships that lead to more work

Attend agency industry days. These events are free and open to small businesses. You’ll meet contracting officers and program managers who buy in your area.

Contact the Small Business Specialist at agencies you want to work with. Every federal agency has one. Their job is to help small businesses compete for contracts.

Accept government purchase cards. If your business can take credit card payments for smaller orders, you open the door to micro-purchases that build relationships and lead to SAT-range follow-on work.

Related: How to Bid on Government Contracts covers the full response process. NAICS Codes for Government Contracting helps you pick the right codes for your business.

What Changed in 2025: The SAT Increase and FAR Part 19

Two changes in late 2025 reshaped the SAT zone for small businesses.

First, the threshold increase itself. Moving the SAT from $250,000 to $350,000 expanded the automatic small business set-aside zone by 40%. Every contract between $250,001 and $350,000 that previously required full competition now falls under simplified procedures with mandatory small business priority.

Second, the FAR Part 19 rewrite took effect September 26, 2025. The key change: the Rule of Two was preserved for new contract awards above the SAT. But for task and delivery orders under multiple-award contracts (MACs), it was eliminated. On MACs, contracting officers now have discretion to set aside individual orders, and that decision can’t be protested.

For new contractors, the net effect is positive. The zone where you have a structural advantage just got bigger. Focus your energy on SAT-range opportunities and build from there.

Common Mistakes New Contractors Make with the SAT

Skipping simplified acquisitions because the dollar amounts seem small. They aren’t small. They’re your on-ramp. Every large contractor started with contracts in this range.

Submitting a 50-page response to an RFQ. Under simplified procedures, brevity wins. Answer what’s asked. A tight, responsive five-page quote beats an elaborate document the contracting officer doesn’t have time to read.

Letting SAM.gov registration expire. Your registration must be active to receive any federal contract award. Set a calendar reminder 60 days before your annual renewal date.

Waiting for the “perfect” opportunity. In the SAT range, volume matters more than perfection. Bid on opportunities you’re qualified for and learn from each submission. Your third quote will be better than your first.

Not accepting government purchase cards. If your business can’t process credit card payments, you’re blocking the micro-purchase tier that feeds into larger SAT-range work.

Related: How to Start Government Contracting covers five free actions to take this week.

Frequently Asked Questions

What is the simplified acquisition threshold in 2026?

The simplified acquisition threshold is $350,000 as of October 1, 2025. Federal Acquisition Circular 2025-06 increased it from $250,000 as part of a required inflation adjustment. The next adjustment is scheduled for October 2030.

What is the difference between the micro-purchase threshold and the simplified acquisition threshold?

The micro-purchase threshold ($15,000 as of 2026) is the maximum amount the government can spend with no competition at all. The simplified acquisition threshold ($350,000) is the ceiling for simplified buying procedures. Between those two amounts, agencies must compete the purchase but can use faster, simpler methods.

Are contracts below the simplified acquisition threshold set aside for small businesses?

Federal contracts between the micro-purchase threshold ($15,000) and the simplified acquisition threshold ($350,000) must be set aside for small businesses per FAR 19.502-2. The contracting officer can only skip the set-aside if they document that two qualified small firms are unlikely to compete.

What are simplified acquisition procedures?

Simplified acquisition procedures are streamlined contracting methods under FAR Part 13 for purchases up to $350,000. They include Requests for Quotation, purchase orders, and Blanket Purchase Agreements. These methods move faster and require less documentation than full competitive procurements under FAR Part 15.

How do I find simplified acquisition contracts on SAM.gov?

Search Contract Opportunities on SAM.gov and filter by dollar range ($15,000 to $350,000). Add your NAICS codes to see opportunities in your industry. Set up saved searches with email alerts so you’re notified when new opportunities post.

Do I need past performance for simplified acquisitions?

Past performance requirements are typically lighter for simplified acquisitions than for larger contracts. Many contracting officers at this level weigh price and technical capability more heavily. New contractors can compete by showing relevant commercial experience even without prior federal contracts.

When did the simplified acquisition threshold change to $350,000?

The threshold changed on October 1, 2025. The final rule was published in the Federal Register on August 27, 2025 (90 FR 68642), as part of Federal Acquisition Circular 2025-06. Congress requires these inflation adjustments every five years under 41 U.S.C. 1908.

Can I use a GSA Schedule for simplified acquisitions?

Federal agencies can order from GSA Schedules using simplified procedures. Contracting officers are required to check GSA Advantage as part of their market research for simplified acquisitions. Having a GSA Schedule makes your business visible to buyers, though the application requires at least two years of financial history.

Next Steps

1. Check your SAM.gov registration. Log in at sam.gov and verify your registration is active and lists all your relevant NAICS codes. If it’s expired, renew it before doing anything else.

2. Set up a SAM.gov saved search. Filter Contract Opportunities for $15,000 to $350,000 in your NAICS codes. Turn on daily email notifications.

3. Read our micro-purchase threshold guide. Contracts under $15,000 are even easier to win and build the relationships that lead to SAT-range work. Read the full guide here.

4. Contact your local APEX Accelerator. They provide free help finding and responding to government contracts. Find yours at aptac-us.org.

5. Prepare your capability statement. You’ll need it when reaching out to agency Small Business Specialists. Our free template walks you through each section.