From the desk of Rebecca Field, CPA, of CliftonLarsonAllen LLP:
“On June 20, 2018, OMB issued memorandum M-18-18 titled, Implementing Statutory Changes to the Micro-Purchase and Simplified Acquisition Thresholds for Financial Assistance, to implement the effect of the National Defense Authorization Acts (NDAA) of 2017 and 2018 on the procurement micro-purchase and simplified acquisition thresholds. This memo increases the micro-purchase threshold from $3,500 to $10,000, and increases the Simplified Acquisition Threshold from $150,000 to $250,000. These threshold increases are effective immediately and apply to all categories of federal financial assistance subject to the Uniform Guidance requirements.
It means an increase in the UG bid thresholds. To operate under these higher thresholds, you must revise the sections of your local procurement policies that relate to UG requirements. Where your policy references “$3,500” for the Micro-Purchase Threshold, you should change the dollar amount to “$10,000.” Where your policy references “$150,000” for the Simplified Acquisition Threshold, you should change the dollar amount to “$250,000.”
If you do not change these UG thresholds in your local policy, you must still operate under the lower thresholds that are currently listed in your policy. Remember, you are subject to the “most restrictive rule,” so if your policy maintains the lower thresholds, you are bound by your local policy despite the increase in the thresholds authorized by OMB. If you don’t change your local policy, you cannot take advantage of the increased thresholds. For example, if you don’t change “$3,500” to “$10,000,” you must follow the UG small purchase procedures for purchases of goods and servicing costing $3,500 or more. If, however, you change “$3,500” to “$10,000,” you are not required to use the small purchase method unless the contract costs $10,000 or more. The same is true for the Simplified Acquisition Threshold (changing $150,000 to $250,000).
If you’ve not yet adopted a local procurement policy that is compliant with UG requirements, you should do so as soon as possible to be compliant with the UG requirement that you have written procurement policies that are consistent with federal law. In developing your policy, I suggest you take advantage of the increased thresholds ($10,000 and $250,000). For organizations that receive federal funding, the grace period for updating procurement policies and procedures expired for three full fiscal years starting after 12/26/14. Therefore, organizations with 12/31 year ends, procurement procedures needed to be updated by 1/1/2018, for 6/30 year ends by 7/1/2018, 9/30 year ends will need to be updated by 10/1/2018.”
The NIGP Consulting team can help your organization develop and implement Uniform Guidance language for your procurement policies and procedures. To learn more call: 800-757-6064, or email: firstname.lastname@example.org and find out how you can get started today.
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Calculations are based on documented Periscope Holdings customer savings and research from Aberdeen.