How FASA Affects You
What was so significant about FASA to the interests of small businesses? Here are some of the specific changes that this law made:
- Changed the small purchase level from $25,000 and under to between $3,000 and $100,000, and provided that all these purchases can enjoy "simplified acquisition procedures," which in effect reserves all of these purchases for small business. Two of the main purposes of the simplified acquisition procedures are to reduce administrative costs and to improve contract opportunities for small, small disadvantaged, small service-disabled-veteran, and small women-owned businesses.
- The government was mandated to use electronic means to issue and award small purchases (termed by the law as "Simplified Acquisition Purchases" or "SAP"). That means that for contracts under $100,000, there is now a tremendous effort by the government to go "paperless." What does paperless mean? Well, it simply means that the government is entering the era of electronic commerce and technology for doing business. So much for the myth of being buried by government paperwork and red tape.
- Encouraged government buying offices to use credit cards on all requirements under $3,000. Basically, the intent was to get these "nuisance" buys out of the buying office and simply let the government user buy what was needed quickly and efficiently. This means two things for small businesses: minimal paperwork and a real opportunity for any business that accepts credit cards to increase its business. As we mentioned earlier, in 2005 alone, the federal government spent almost $17.8 billion in credit card purchases in the under-$3000 range. The government now just goes to a local store and buys what it needs.
- Established commercial items as the preferred products for the government to buy if they meet the government need; to do otherwise requires a justification as to why it is necessary. This last little change is having a major impact on the process. First of all, it has meant a reduction in government personnel that small businesses have to deal with. The more the government buys commercial items, the less it will need buyers, production specialists, pricing specialists, quality assurance specialists and other personnel that were required when the government designed to its own specifications. Second, it has meant that only if the commercial market cannot satisfy the government's need can the government buyer require that items be built to government specifications. In other words, most government specifications and standards will be used only with contracts greater than $100,000, so you, the small business contractor, will have fewer government requirements to worry about.
|Government Purchasing Thresholds
|Micro-purchases (credit cards)
||for contracts up to $3,000
|Simplified Acquisition Procedures (SAP)
||for contracts for $3,001 to under $150,000
||for contracts $100,000 to $5,000,000
|Commercial Off the Shelf (COTS)
||no dollar limits, any dollar size contract
||for contracts over $3,000
||FAR Parts 14 & 15 apply for contracts $100,000 and up