FAR Thresholds Are Changing on October 1, 2025

The FAR Council has issued a final rule that adjusts many acquisition dollar thresholds for inflation, effective October 1, 2025. This update raises the micro-purchase and simplified acquisition thresholds and changes several triggers tied to publicizing, reporting, justifications, and subcontracting plans. In this brief post, we highlight the key changes and note what they typically mean for vendors working with DoD and civilian agencies.

Micro-purchase threshold increases to 15,000 dollars, with contingency thresholds moving to 25,000 and 40,000 dollars.
More very small buys can be placed with purchase cards or simple procedures, so you may see more low-dollar orders without formal competition. Federal Register
Simplified acquisition threshold increases to 350,000 dollars, with contingency thresholds moving to 1,000,000 and 2,000,000 dollars, and 650,000 dollars for humanitarian or peacekeeping operations.
More buys can use streamlined simplified acquisition procedures, which usually means shorter solicitations and faster awards. Federal Register
Local publicizing thresholds in FAR 5.101, 5.205, and 5.206 rise from 15,000 to 20,000 dollars.
Fewer actions between 15,000 and 20,000 dollars will require local posting, which may slightly reduce visibility for very small opportunities in that band. Federal Register+1
First-tier subcontract reporting threshold (including executive compensation) increases from 30,000 to 40,000 dollars.
Prime contractors update reporting triggers, and subs at or above 40,000 dollars should expect FSRS reporting. Federal Register
Threshold for requiring a separate justification when awarding an 8(a) sole-source increases from 25 million to 30 million dollars.
Larger 8(a) sole-source awards can proceed without a separate justification until 30 million dollars, which may reduce internal approval steps below that level. Federal Register
Approval thresholds for justifications for other than full and open competition increase to 900,000 and 20 million dollars, with the higher tiers moving to 90 million dollars, and to 150 million dollars for DoD, NASA, and the Coast Guard.
Agencies will need higher-level approvals only at higher dollar values, which can speed processing for some exceptions to competition. Federal Register+1
Ceiling for simplified procedures for certain commercial products and services (FAR 13.500(a)) increases from 7.5 million to 9 million dollars; the separate 15 million dollar ceiling in 13.500(c) does not change.
More commercial buys up to 9 million dollars may use FAR 13.5’s streamlined approach, while the special 15 million dollar case remains the same. Federal Register
Cost or pricing data thresholds rise to 950,000 dollars for contracts awarded before July 1, 2018, and to 2.5 million dollars for contracts issued on or after July 1, 2018.
More awards and subawards are exempt from submitting certified cost or pricing data, which can reduce proposal compliance workload. Federal Register
Prime contractor subcontracting plan threshold increases from 750,000 to 900,000 dollars, with the construction threshold increasing from 1.5 million to 2 million dollars.
Fewer awards will require formal small business subcontracting plans at the lower amounts. Federal Register
The “major system” definition in FAR 2.101 is updated from 2.5 million to 3 million dollars.
Slightly fewer acquisitions will meet the major-system dollar trigger in FAR, which can affect applicable reviews and procedures. Federal Register

What this means for industry is mostly streamlined processes on more buys and updated reporting and planning triggers at higher dollar amounts. Timelines and internal reviews may look different once agencies implement these changes.

NCMBC shares this for general awareness only. Please review the Federal Register notice and consult your legal counsel and your contracting officers on how these changes apply to your solicitations, contracts, purchasing policies, and internal controls.