Selling to U.S. Government Agencies: What You Need to Know About the FAR Overhaul and New Purchasing Limits

Mark Fitzsimmons
Oct 2, 2025
3 min read

Updated: Nov 5, 2025

The U.S. federal government is the world’s largest customer. It spends hundreds of billions each year on products, services, and technology. For businesses, this presents a massive opportunity. However, it comes with its own set of rules, thresholds, and processes.

Two recent shifts make this moment especially important for companies considering the federal market:

1. The Revolutionary FAR Overhaul (RFO)

In April 2025, the White House initiated a sweeping rewrite of the Federal Acquisition Regulation (FAR). The goal is to streamline, simplify, and clarify the rules for federal contracting. This “plain language” overhaul aims to reduce red tape, speed up acquisitions, and focus on statutory essentials. While the rewrite is still rolling out in stages, sellers should expect:

Simpler language and fewer barriers for entry.
More consistency across agencies, with fewer conflicting interpretations.
Faster decision-making on smaller purchases.

2. Higher Statutory Purchasing Limits

Also effective in FY26, key purchasing thresholds are increasing:

Micro-Purchase Threshold (MPT): Rising from $10,000 to $15,000 (with higher thresholds for contingency and overseas buys).
Simplified Acquisition Threshold (SAT): Expected to rise from $250,000 to $350,000, making many mid-sized purchases faster and less administratively burdensome.

Why This Matters

These changes are significant. More agency buys can now happen quickly, without lengthy competitions. For small businesses and new entrants, this creates more accessible “on-ramps” to win government work.

What This Means for Sellers

These changes are good news—but they also raise the stakes. Agencies will be able to move faster, but sellers will need to be procurement-ready:

Your pricing needs to be clear and defensible.
Your compliance posture (SAM registration, reps & certs, cybersecurity, accessibility) must be buttoned up.
Your offering should be packaged to fit into these new buying lanes, whether that’s micro-purchase-sized solutions, simplified acquisition bids, or teaming through existing contract vehicles.

The Opportunity and the Catch

The Revolutionary FAR Overhaul and the rising purchasing thresholds aren’t just policy shifts; they’re signals that the federal market is evolving. Agencies are being empowered to buy faster, in simpler ways, and with more flexibility. For businesses, this means the traditional barriers to entry are lower, but the competition for attention and credibility will only grow sharper.

The fundamentals still matter: you must be visible, easy to buy from, and fully compliant. What’s new is the scale of opportunity. The ceiling for quick-turn purchases is higher, and the language of acquisition is moving closer to the way commercial firms already operate.

Preparing for Success

So, how can your business align with these changes? Start by assessing your current operations. Are you ready to adapt to the new rules? Companies that prepare now, while others are still adjusting, will be the ones that capture early wins and build lasting federal relationships.

Invest in Training: Ensure your team understands the new FAR regulations and purchasing limits. Knowledge is power.
Enhance Your Offerings: Tailor your products and services to meet the new thresholds. This could mean developing smaller, more agile solutions.
Build Relationships: Engage with agency representatives. Understanding their needs can give you a competitive edge.

Conclusion

The evolving landscape of federal contracting presents both challenges and opportunities. By staying informed and agile, your business can thrive in this new environment. The real question isn’t “What are the new rules?”—it’s “How can my business align with them strategically and sustainably?”

Embrace these changes. They could be the key to unlocking your business's potential in the federal market.