When developing your business strategy, it is best to consider the entry points in federal contracting that will be the easiest to obtain. Why? I believe that it is better to target a specific dollar range when seeking your first contract. The Simplified Acquisition Procedures, otherwise known as SAP, is the simplest way to bid a government contract. SAP threshold ranges from $3,000 to $250,000. Since this threshold is set-aside strictly for small businesses, it is easier for companies to win their first contract by bidding within this range.
What are the Simplified Acquisition Procedures?
Simplified Acquisition Procedures (SAP) are contracting methods to streamline the purchasing process and obtaining goods and services simpler. The SAP procedures result in less paperwork and lower costs for the Government and small business. Therefore, it is a great win-win for all parties. It is essential that you consider the SAP as one of your business strategies for entering into government contracting.
SAP procedures are also known as small purchases. These small purchases are the easiest way for a small business to get started in government contracting. Since these purchases are at the lower threshold, the government requires less paperwork making it ideal for micro or businesses. Some businesses will even specialize just in this area and never venture into contracts above this threshold. Your business strategy can be as simple as bidding on contracts within the Simplified Acquisition Threshold or more complex by adding contracts above the threshold.
Considering the acquisitions in this range is essential. It is one of the most common ways that small businesses obtain their first contract. Since small companies will want to limit the amount of risk associated with government contracting the Simplified Acquisition Threshold is a great way to limit the risk while still venturing into this marketplace.
Federal Acquisition Regulation (FAR)
The Federal Acquisition Regulation (FAR) tells federal agencies that they will use simplified acquisition procedures for all purchases of supplies or services not above the Simplified Acquisition Threshold (SAT). The SAT is the dollar values that apply to purchase above $3,000 and under $250,000.
Which Goods and Services are Purchase?
Federal agencies will use the SAP for the acquisition of supplies and services, including construction, research and development, and commercial items. Typically the government will purchase office supplies, computer software and grounds keeping services using these procedures. A typical construction solicitation at this level would be to build out an office inside a building. There are a ton of opportunities within the SAP range.
Simplified Acquisition Procedures (SAP) Rules
The SAP requirement should be used for all purchases of supplies or services below the SAT unless these items can be obtained from the mandatory sources of supply. Mandatory sources of supply are:
- Federal Prison Industries,
- Committee for Purchase from People Who are Blind or Severely Disabled
- Federal Supply Schedule contracts
- Using existing IDIQ contracts
- Government-wide Purchase Card
- Purchase Orders
- Blanket Purchase Agreements
You will also need to consider the fact that a mandatory source of supply may limit your ability to compete in this market. For example, most janitorial contracts required that the government use the services of the blind and disabled. Since the government has to use these sources, it limits small businesses from obtaining these contracts. It is essential that small businesses research the mandatory sources of supply first before adding this to your business strategy.
What are the Advantages?
The SAP requirements can reduce the administrative costs, and improves opportunities for small business and small disadvantaged businesses to receive a fair proportion of Government contracts. These procedures also promote efficiency and economy in contracting. Also, SAP allows for shorter solicitations and faster turnaround times for these products and services. It also saves the government money as the paperwork requirements are not as involved and require fewer people to process the acquisitions. More essential benefits are that the contracts above the Micro-purchase threshold of $3000 and below the SAT threshold of $250,000 are set-aside exclusively for small businesses.
I would highly recommend that any small business wanting to do business with the government consider using the Simplified Acquisition Procedures as a part of their business strategy. For more articles click here.