2 CFR 200.320, explained in plain English

The numbers, and why you will see the wrong ones

The two tier boundaries are not written into §200.320, the procurement section of the Uniform Guidance. It points at the definitions in §200.1, which point at the Federal Acquisition Regulation, which is adjusted for inflation periodically. So the regulation is stable and those numbers move underneath it. The section does carry one figure of its own, the $50,000 self-certification ceiling in paragraph (a)(1)(iv), covered below.

Threshold	Current	Previously
Micro-purchase	$15,000	$10,000
Simplified acquisition	$350,000	$250,000

Effective 1 October 2025. Policies and guidance written before then say $10,000 and $250,000. If your written policy quotes figures rather than pointing at the definitions, it is now out of date, and a policy you do not follow is worse than a vague one.

The tiers

1. Informal at or below the micro-purchase threshold

   You may award without soliciting competitive quotations on two conditions. First, you consider the price reasonable based on research, experience, purchase history or similar information, and you keep documents supporting that conclusion. The documentation is the condition to remember; it is what turns a judgment call into a defensible one. Separately, the section says you should distribute micro-purchases equitably among qualified suppliers to the extent practicable. That is guidance rather than a condition of award.

2. Small purchase above micro-purchase, at or below the simplified acquisition threshold

   Rate quotations must be obtained from an adequate number of qualified sources. Relatively simple, but it is a real requirement: get quotes, and keep them.

3. Formal above the simplified acquisition threshold

   Sealed bids or competitive proposals, with a written method for evaluation and award. Formal methods are competitive and require public notice; the extra rule that a sealed-bid invitation be publicly advertised is written for local governments. One thing to note here: the section refers to your simplified acquisition threshold, and you are allowed to set a lower one than the federal figure. If your own policy says $100,000, you are in this tier at $100,001, not at $350,001. At the federal $350,000 figure, only a large purchase, such as a construction job, lands here. A lower threshold of your own brings smaller purchases into this tier too.

4. Noncompetitive

   Permitted only in five narrow cases:
   (1) The purchase is at or under the micro-purchase threshold.
   (2) Only one source can supply it.
   (3) A public emergency will not allow the delay of a public notice.
   (4) You ask in writing and the federal agency or pass-through entity gives written approval.
   (5) You asked several sources for bids and the competition proved inadequate.
   Number 4 is a two-step paper trail, not a verbal yes. Document which case applies, before you buy.

You can raise your own micro-purchase threshold

Under §200.320(a)(1)(iv), you may self-certify a micro-purchase threshold higher than the standard one, up to $50,000, based on a clear rationale such as a qualifying low-risk auditee status or an annual internal risk assessment. Above $50,000 you need approval from the federal agency that sets your indirect rate (your cognizant agency).

Self-certification is renewed each year, and it must be documented and kept available for your funder and auditors. This is useful for an organization that buys a lot of mid-sized items.

What the tiers do not excuse

The thresholds decide how much competition, not whether the other rules apply. Regardless of size, four things still apply. Written procurement procedures. A written conflict of interest standard covering employees involved in selection and award. Cost or price reasonableness, and documentation sufficient to reconstruct the decision. A $200 micro-purchase from a board member's company is a conflict of interest problem, not a procurement threshold problem.

And a well-bought item is not automatically chargeable. It still has to pass the allowable cost tests in §200.403, and it belongs on the award that benefits from it, under §200.405 on allocable costs.

What to actually do

1. Write the policy to reference, not to quote

   Say “the micro-purchase threshold as defined at 2 CFR 200.1” rather than a dollar figure. It stops being wrong every five years.

2. Keep quotes with the invoice

   The small purchase tier is easy to satisfy and easy to fail, because the quotes were obtained verbally and never written down.

3. Decide about self-certification once

   If you routinely buy between $15,000 and $50,000, do the risk assessment and raise your threshold deliberately.

4. Document sole source before, not after

   Write it before you buy; a note written after the fact is harder to defend.

This is general information, not legal or accounting advice. Federal grant rules change and are applied differently by different agencies and auditors. Check with your auditor, your grant officer, or an attorney before relying on any of it.

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Sources: 2 CFR Part 200 (eCFR), §200.320 and the threshold definitions at §200.1, with the current FAR figures from the FAR inflation adjustment effective 1 October 2025. Read August 2026, re-checked against eCFR 1 September 2026. These figures are adjusted periodically; check before relying on them.