Complying With Uniform Guidance Procurement Rules: CLA

Key insights

Starting October 1, 2025, the minimum purchase limits related to procurement with federal funds have gone up. The micro-purchase limit is now $15,000 (up from $10,000), and the simplified acquisition threshold is $350,000 (up from $250,000).
Organizations are required to have documented procurement processes and policies. There are five procurement methods within the Uniform Guidance, each with its own rules and dollar limits.
Understanding the rules and regulations are key to proper grants compliance and management.

Get help developing strategies for effective grants management.

If your organization uses federal funds, noncompliance with Uniform Guidance can result in penalties and reputational damage. Vigilant awareness of the requirements can help you adopt compliant procurement policies and procedures and be prepared for a federal review.

How to bring your procurement activities into compliance

Know the “musts” of a properly documented policy

The Uniform guidance Procurement rules require your organization to have documented procurement procedures reflecting applicable state, local, and tribal laws and regulations, and your procurements must conform to federal law and procurement standards.

The rules also require you to have written rules of conduct covering conflicts of interest and governing employees engaged in selecting, awarding, and administering contracts.

Understanding federal procurement rules and thresholds, developing policies, and implementing procedures can help keep you on the right side of regulations.

For procurements under a federal award, Indian tribes, states, and state agencies are required to follow the same policies used for non-federal procurements and meet other requirements indicated in the outlined standards.

All other organizations receiving federal funds are required to have documented procurement procedures and policies that include these elements:

Maintenance of oversight designed to ensure contractors perform in accordance with terms/conditions/specifications of contracts
Acquisition of unnecessary or duplicative items must be avoided
Contracts are awarded only to responsible contractors
Records are sufficiently maintained to detail the history of procurement
Transactions are conducted in a manner providing full and open competition
Potential bidders cannot be precluded from qualifying during the solicitation period
All solicitations incorporate a clear and accurate description of the technical requirements for the property, equipment, or service being procured
All prequalified lists of persons, firms, or products used are current and include enough qualified sources to enable maximum open and free competition
Cost or price analysis is performed in connection with every procurement action in excess of the simplified acquisition threshold, including contract modifications
One of the five allowable procurement methodologies is used

Use the proper procurement methodologies

The Uniform Guidance outlines five methods of procurement:

Micro-purchases
Small purchases
Sealed bids
Competitive proposals
Noncompetitive (sole source) proposals

Each methodology aligns with a dollar range for the purchase.

This table can help you determine which procurement methodology is used when making purchases with federal funds.

Methodology	Dollar Threshold	Requirements
Micro-purchase	Not to exceed micro-purchase threshold: $0 – $15,000	No bid or quote is required if price is considered reasonable. Reasonableness could be determined based on research, experience, purchase history, or other information. Distributed equitably among a range of qualified vendors when practical
Small purchase procedure	Greater than micro-purchase, not to exceed the simplified acquisition threshold: $15,001 – $350,000	Price or rate quotes must be obtained from adequate number of sources (organization may exercise judgement in determining what number is adequate) Can be informal, e.g., phone call or web search All quotes, including phone calls, web searches, etc., must be documented and kept on file Price does not need to be deciding factor, but all quotes need to be kept in procurement records
Sealed bid	Greater than the simplified acquisition threshold: $350,001 and greater	Used when selection of successful bidder can be made principally based on price Bids must be solicited from an adequate number of known suppliers, providing sufficient response time Local governments must publicly advertise bids Invitation for bids must define the items or services in order for bidders to properly respond All bids will be opened at time and place prescribed in invitation; local government bids must be opened publicly Firm fixed price contract made in writing to the lowest responsive and responsible bidder Any or all bids may be rejected if there is a sound documented reason
Competitive proposal	Greater than the simplified acquisition threshold: $350,001 and greater	Require public notice All evaluation factors and their relative importance must be identified Must be solicited from an adequate number of qualified sources Must have a written method for conducting technical evaluations of the proposals and selecting recipients Contracts must be awarded to the responsible firm whose proposal is most advantageous, with price and other factors considered
Noncompetitive proposal (sole source)	Greater than micro-purchase threshold: $15,001 and greater	May be used only when: the item is available only from a single source, the public exigency or emergency will not permit a delay resulting from competitive solicitation, federal awarding agency or pass-through entity expressly authorizes its use in response to a written request, or after solicitation of several sources competition is determined inadequate Justification of the use of noncompetitive proposal must be documented Any research on availability from multiple sources must be documented Documentation of authorization must be retained Any initial solicitations from multiple sources which are concluded to be inadequate, and such reasoning, must be documented

Update your procurement policies to take advantage of recent threshold increases

A recent ruling from multiple government agencies, including the Office of Management and Budget (OMB) increased the micro-purchase threshold from $10,000 to $15,000 and the simplified acquisition threshold from $250,000 to $350,000.

These threshold increases are effective October 1, 2025 and apply to all categories of federal financial assistance subject to the Uniform Guidance requirements. To operate under these higher thresholds, your organization needs to revise the sections of procurement policies relating to Uniform Guidance requirements.

To use these higher thresholds, wherever your policies reference “$10,000” for the micro-purchase threshold, you should change the dollar amount to “$15,000.” And where your policies reference “$250,000” for the simplified acquisition threshold, edit the dollar amount to “$350,000.”

Until you make those changes, you must continue to operate under the lower thresholds. Remember, you are subject to the most restrictive rule, so if your policy maintains the lower thresholds, you are bound by it, despite the increase in the thresholds authorized by OMB.

Organizations can also choose to use lower threshold amounts, if appropriate.

How CLA can help with federal funding challenges

By staying informed, proactively engaging with policy changes, and leveraging strengths, federal grant recipients can continue to play important roles in addressing the needs of their communities.

We have a team of experienced professionals evaluating the new changes and can help you navigate the complexities of federal grants. Whether you need help developing effective strategies to implement grant management policies and procedures, or need training on understanding compliance requirements, CLA can guide you through the process.

Contact us

Get help developing strategies for effective grants management. Complete the form below to connect with CLA.