The federal micro-purchase threshold is $15,000 for most supplies and services as of October 1, 2025, raised from $10,000 by the FAR Council’s inflation adjustment.1Acquisition.GOV. Threshold Changes – October 1st, 2025 Below that ceiling, authorized government buyers can purchase without soliciting competitive bids, without most standard contract clauses, and usually with a government purchase card. Lower limits still apply to construction and certain services, and higher limits apply during emergencies.
The Dollar Limits
The general threshold covers routine supplies and services. Two categories carry permanently lower ceilings because they are set by statute and were excluded from the inflation adjustment:2Federal Register. Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds
- General supplies and services: $15,000
- Construction subject to Wage Rate Requirements (Davis-Bacon): $2,0003U.S. Department of Labor. Davis-Bacon and Related Acts
- Nonprofessional services subject to Service Contract Labor Standards: $2,500
Higher ceilings apply when a purchase directly supports a contingency operation, defense against a nuclear or cyber attack, international disaster relief, or a declared emergency. Inside the United States that limit is $25,000; outside the United States it is $40,000.4Acquisition.GOV. Subpart 13.2 – Actions At or Below the Micro-Purchase Threshold The specific transaction has to support the operation. An emergency existing somewhere does not, by itself, unlock the higher amount.
Who Can Make a Micro-Purchase
Agency heads are encouraged to delegate micro-purchase authority broadly so everyday buys are not stuck behind a single contracting officer.4Acquisition.GOV. Subpart 13.2 – Actions At or Below the Micro-Purchase Threshold In practice, purchases are made by cardholders under the GSA SmartPay program who have received a formal appointment letter and completed required training. Some agencies add their own coursework on top of the standard SmartPay training before issuing a card.
Buying without that authority creates an “unauthorized commitment.” The government is not legally bound to pay, and the vendor gets paid only through a ratification process under FAR 1.602-3, which requires a contracting officer to find the price fair, legal counsel to concur, and confirmation that funds were available when the commitment was made.5Acquisition.GOV. FAR 1.602-3 – Ratification of Unauthorized Commitments The employee who made the commitment must submit a written explanation, and agencies treat these incidents as misconduct.
Rules You Have to Follow
No Splitting Requirements
A single need cannot be broken into smaller orders to stay under the threshold.6Acquisition.GOV. FAR 13.003 – Policy A $22,000 project cannot be split into two $11,000 orders. Purchase card audits look for this pattern first, and the consequences run from card cancellation to criminal prosecution.
Rotate Vendors When Practicable
Micro-purchases should be distributed among qualified suppliers rather than routed repeatedly to the same vendor.7Acquisition.GOV. FAR 13.203 – Purchase Guidelines “Practicable” is the operative word. A buyer at a remote installation is not expected to drive across town for a different office supply store each week, but when several vendors can fill the same need at similar prices, spreading the work supports the vendor base and reduces the appearance of favoritism.
Price Reasonableness
Formal competition is not required, but the buyer must consider whether the price is reasonable before committing. The FAR acknowledges that verifying prices on small purchases can cost more than any savings it produces. Because of that, actual verification is required in only two situations: when the buyer suspects the price is too high based on prior purchases or market knowledge, or when the item is unusual enough that no comparable pricing exists. Routine supplies with well-known commercial prices need no special documentation of reasonableness.
What Drops Away Below the Threshold
Several requirements that apply to larger contracts do not apply to micro-purchases.
Buy American. The Buy American statute applies only when a supply contract exceeds the micro-purchase threshold, so purchases at or below $15,000 are exempt from domestic-preference requirements.8Acquisition.GOV. Subpart 25.1 – Buy American – Supplies
SAM registration. A vendor does not need to be registered in the System for Award Management when the purchase card is used as both the ordering and payment mechanism, or when the transaction does not use electronic funds transfer.9Acquisition.GOV. Subpart 4.11 – System for Award Management Since most micro-purchases go on a card, most vendors can accept these orders without ever registering.
Standard clauses and provisions. Micro-purchases do not carry the standard FAR provisions or clauses that attach to larger contracts, with limited exceptions. No lengthy solicitation, no representations and certifications package, no flow-down clauses.
Sales tax. Federal purchases are generally immune from state and local sales tax.10Acquisition.GOV. FAR Part 29 – Taxes A buyer should carry Standard Form 1094 or present the purchase card itself as evidence of federal purchase. If a vendor still charges tax, resolve it at the point of sale rather than absorbing the cost.
What You Still Cannot Buy
Being under the dollar limit does not open every category. FAR 13.201 prohibits hardware, software, and services from Kaspersky Lab; equipment or services using covered telecommunications equipment from companies such as Huawei and ZTE; and any application from ByteDance, including TikTok, absent an exception.4Acquisition.GOV. Subpart 13.2 – Actions At or Below the Micro-Purchase Threshold
Each agency also maintains its own prohibited-transaction list. Common items across agencies include cash advances and money orders, gift cards and gift certificates, personal purchases, bail and bond payments, gambling, salaries and wages, and items containing certain PFAS chemicals.11Acquisition.GOV. AFARS 14-3 – Prohibited Transactions Review your agency’s list during initial training. A purchase that seems fine in the abstract may still violate agency policy.
Documentation and Record Retention
Documentation for micro-purchases is lighter than what larger acquisitions demand, but the file still has to show what was bought, from whom, and at what price. At minimum, record the vendor’s name and address, a description of the supplies or services, the date and amount including shipping, the account charged, and a short justification. When the purchase card is used, the bank’s electronic transaction record captures much of this, and the cardholder uploads supporting receipts or confirmations.
When price verification is triggered, a brief written explanation belongs in the file. Comparing against a recent purchase of the same item or checking a commercial website is usually enough. If competitive quotes were solicited and the award did not go to the lowest bidder, identify who was solicited and explain why.7Acquisition.GOV. FAR 13.203 – Purchase Guidelines
Federal procurement records must generally be retained for six years after final payment.12Acquisition.GOV. FAR 4.805 – Storage, Handling, and Contract Files Records stored in the bank’s electronic access system satisfy retention as long as the agency can retrieve them during audits.
Approving Official Review
Every purchase card transaction gets a second look. The billing official, sometimes called the approving official, is a supervisor or designated reviewer who verifies that each transaction was legal, necessary, and properly documented.13Acquisition.GOV. AFARS Chapter 2 – Program Organization, Roles, and Responsibilities That review covers splitting, source rotation, and fund availability. The billing official must certify the billing statement electronically within five business days of the end of each cycle, and must raise questionable transactions with the cardholder or the agency program coordinator.
What Happens When Rules Are Broken
Splitting requirements, personal purchases, or other misuse triggers consequences that escalate with severity:14GSA SmartPay. Lesson 7: Misuse/Abuse and Fraud
- Administrative action, including written reprimand, counseling, or card cancellation
- Employment action, including suspension or termination
- Criminal prosecution under 18 U.S.C. ยง 287 for false claims, carrying fines, imprisonment, or both
Agencies also run periodic data-mining reviews of purchase card transactions looking for splitting patterns, duplicate payments, and purchases from unusual merchant categories. Being flagged in a review does not automatically mean punishment, but it does mean producing documentation for every questioned transaction. Clean, contemporaneous records are the best defense.