Contracting Basics - Simplified Acquisitions

Federal Contract Types

Federal Agencies typically purchase products and services in one of three ways: through sealed bids, negotiation and simplified acquisitions. Of these methods, simplified acquisitions provide the easiest path to federal contracts for small businesses. The procurement process is streamlined and many federal contracts are reserved exclusively for smaller firms.

Federal Contracts: Simplified Acquisition

Simplified acquisitions provide an accelerated route to federal contracts, cutting through much of the red tape involved with sealed bids and negotiated procurements. Simplified acquisitions are typically reserved for smaller-dollar buys. The good news for small businesses is that simplified acquisitions of supplies and services between $2,500 and $100,000 are usually reserved exclusively for them.

Purchasing Methods for Federal Contracts

Unlike other purchasing methods, simplified acquisitions don’t adhere to a set federal contract buying process. Government officials can make and pay for simplified acquisitions through cash, purchase orders, government-wide purchase cards or blanket purchase agreements. To win these small purchases for federal contracts, companies must simply provide contracting officials with a quotation.

Federal Contracts for Micro-purchases

For simplified acquisitions between $2,500 and $25,000, federal contracting officials obtain either oral or written quotations from businesses. These purchases usually require government buyers to obtain quotations from at least three sources to make sure the price is reasonable. Purchases under $2,500 are another story. Federal contract officers can make these so-called “micro-purchases” without soliciting competitive quotations, as long as the contracting official thinks the price is reasonable and other micro-purchases are distributed fairly among qualified suppliers.

Federal Contracts: Purchase Orders

Government officials typically issue a purchase order in response to a company’s oral or written quotation for a federal contract. The purchase order describes everything the purchaser and seller must know to complete the transaction, including prices, delivery details, and federal contract and acquisition numbers. The purchase order is not a binding federal contract unless the seller accepts the order or performs the required work.

Federal Contracts: Blanket Purchase Agreements (BPAs)

BPAs further streamline the simplified acquisition process. A federal contracting office typically issues these agreements when the government wants to make repetitive purchases from a seller over a set period of time. BPAs cut down on paperwork for federal contracts and allow for speedy transactions.