FASEB Raises Concerns About Purchase Threshold

February 03, 2016
In a letter to White House Office Management and Budget (OMB) Controller David Mader, the Federation of American Societies for Experimental Biology (FASEB) expressed concerns regarding new purchase limitations.  

The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR part 200) introduced a threshold of $3,000 for “micro-purchases,” goods and services that can be purchased with minimal administrative burden. Purchases above this dollar value would require additional documentation of comparative rates from other vendors.

FASEB’s letter builds upon concerns raised in a January 20, 2016 letter from the Council on Governmental Relations (COGR) and other signatories suggesting the $3,000 threshold is too stringent. Many institutions and states already set micro-purchases at $5,000 or $10,000. Reducing the micro-purchase threshold will delay the acquisition of research materials and slow the progress of research while adding administrative burden and processing costs.

In addition to the core concerns regarding additional costs and pace of research, FASEB refers to analysis by the Federal Demonstration Project that indicates that the new threshold will not result in large savings. In a sample of 55 institutions, micro-purchase transactions accounted for only 26 percent of total procurements funds. The majority of these transactions were less than $10,000. Therefore, FASEB strongly recommended that OMB use existing institutional data to determine micro-purchase thresholds that would ensure appropriate oversight of federal funds while keeping administrative burdens to a minimum.

Categories: Regulatory Burden and Research Administration;