Updates to the Federal Micro-Purchase Threshold in 2 CFR 200.320(a)(1)

This memorandum supersedes SP20 CACFP07 SFSP06-2019 - Revised

The previous version of this memorandum contained incorrect references to state agencies throughout. FNS is correcting this memorandum to remove the incorrect references and so that it more clearly and accurately reflects the federal regulations.

The Food and Nutrition Service (FNS) has received questions regarding changes made in November 2020 by the Office of Management and Budget (OMB) to the federal informal procurement method, micro-purchases, and the micro-purchase threshold in government-wide regulations at 2 CFR 200.320(a)(1)(i)-(v). The purpose of this guidance is to make state agencies and program operators aware of regulatory changes made by OMB which they may utilize at their discretion. These changes may be helpful to program operators experiencing challenges related to supply chain disruptions.

As a reminder, federal procurement standards outlined in 2 CFR Part 200 apply government-wide to all program operators conducting procurement with federal funds. These regulations fall under the purview of OMB and FNS is not able to modify or waive these regulations. Additionally, state and local regulations will also apply to procurements made by program operators.

Micro-Purchase Distribution

Previously, government-wide regulations at 2 CFR 200.320(a) required that to the extent practicable, program operators must distribute micro-purchases equitably among qualified suppliers. This language has been changed to state that to the maximum extent practicable, program operators should distribute micro-purchases equitably among qualified suppliers (2 CFR 200.320(a)(1)(ii)).

Micro-Purchase Awarded Without Competition

Government-wide regulations at 2 CFR 200.320(a) previously stated that micro-purchases may be awarded without soliciting competitive quotations if the program operator considers the price to be reasonable. This language has been updated to state that micro-purchases may be awarded without soliciting competitive price or rate quotations, if the program operator “considers the price to be reasonable based on research, experience, purchase history or other information and documents it files accordingly.” (2 CFR 200.320(a)(1)(ii)).

Micro-Purchase Thresholds

Government-wide regulations at 2 CFR Part 200 were updated to include new language around micro-purchase thresholds available to all program operators. These are outlined below.

Government-wide regulations at 2 CFR 200.320(a)(1)(iii) now provide that program operators are “responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures.” The regulations also provide that the micro-purchase threshold used “must be authorized or not prohibited under state, local, or tribal laws or regulations.” Program operators may establish a micro-purchase threshold that is higher than the federal threshold established in the Federal Acquisition Regulations (FAR), as outlined below.

Increases to the micro-purchase threshold up to $50,000

Government-wide regulations at 2 CFR 200.320(a)(iv) provide that program operators may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation of such self-certification. Program operators choosing to self-certify must prepare and include a justification for the choice. The self-certification must include a justification, clear indication of the threshold, and supporting documentation of any of the following:

1. A qualification as a low-risk auditee, in accordance with the criteria in 2 CFR 200.520;
2. An annual internal institutional risk assessment to identify, mitigate, and manage financial risks; or
3. For public institutions, a higher threshold consistent with state law.

As provided for in government-wide regulations at 2 CFR 200.320(a)(1)(v), in certain circumstances, program operators may request increases to the micro-purchase threshold over $50,000 from their cognizant agency for indirect costs, as applicable (see definition for cognizant agency for indirect costs in 2 CFR 200.1). State agencies may contact their FNS regional office for more information.

State agencies are reminded to distribute this memorandum to program operators immediately. Program operators should direct any questions concerning this guidance to their state agency. State agencies with questions should contact the appropriate FNS regional office.

Sarah Smith-Holmes
Division Director
Program Monitoring and Operational Support
Child Nutrition Programs