GSA solidifies legislation for extending and centralizing procurement powers
The General Services Administration (GSA) has unveiled a comprehensive legislative package aimed at modernizing and streamlining federal procurement processes. The proposals, announced on July 16, 2025, aim to make federal contracting more efficient, less burdensome, and supportive of innovation across agencies.
One of the key proposals is the significant increase in purchasing thresholds. The Simplified Acquisition Threshold (SAT) for commercial products and services would rise from $250,000 to $10 million over five years, allowing agencies to use streamlined acquisition processes for much larger procurements. Similarly, the micro-purchase threshold would increase from $10,000 to $100,000 over the same period [2][4].
The reforms also aim to reduce contractor compliance burdens. The threshold for applying Cost Accounting Standards (CAS) would jump from $2 million to $35 million, exempting nearly half the contractors currently covered by CAS but still preserving coverage for over 90% of federal contract dollars. Moreover, the problematic "trigger contract" threshold for CAS would be eliminated, addressing long-standing industry concerns [1].
The legislative package also includes consolidation and centralization efforts. OMB guidance supports increased use of centralized contracts and centralizes procurement functions at GSA. Agencies would be required to use existing government-wide contract vehicles before awarding new contracts unless exceptions apply. This aims to reduce duplication and increase efficiency in procurement [3].
Other reforms include providing agencies expanded authority to use methods other than traditional procurement contracts to acquire new technologies, potentially fostering innovation. The legislative package would also reduce contractors' ability to protest certain procurement decisions, which may speed up acquisition cycles [2].
The GSA's legislative package also includes measures for additional funding. The additional funding would support the training programs of the Federal Acquisition Institute and the Defense Acquisition University. Furthermore, the package includes provisions supporting state and local divestment from Sudan-linked companies [5].
The GSA's proposals are part of the broader "Revolutionary FAR Overhaul" initiative, which encompasses rewriting the Federal Acquisition Regulation (FAR) and removing statutory and executive order burdens that complicate federal procurement. The proposals are under consideration by Congress for incorporation into the Fiscal Year 2026 National Defense Authorization Act (NDAA) or other acquisition reform legislation [1][2].
In addition, the legislative package includes provisions for broader Emergency Procurement Authority, with thresholds for such procurements rising to $15,000 domestically and $25,000 internationally [6]. The package also includes provisions clarifying congressional support for fiduciaries acting on credible public data in divestment decisions [7].
The GSA seeks to create a long-term channel for agile acquisitions from non-traditional vendors, particularly small tech firms and startups, through the Commercial Solutions Opening (CSO) authority [8]. The threshold for simplified purchases will gradually increase over the years, reaching $10,000,000 after September 30, 2030 [4]. The legislative package also aims to update cost accounting standards, raising the applicability threshold from $2 million to $35 million [9].
The court ruling in 2023 disrupted GSA's multibillion-dollar IT acquisition plans by limiting the use of 876 authority to time-and-materials and labor-hour contracts [10]. However, the legislative package aims to expand Section 876 of the National Defense Authorization Act, restoring its original intent by ensuring all services contracts can benefit from price competition at the order level [11].
The legislative package also proposes a nominal user fee for the Integrated Award Environment, potentially generating $40 million annually. The user fee structure includes a $75 to $125 charge for new Unique Entity Identifiers and a $25 to $50 annual maintenance fee [1]. GSA proposes granting permanent Commercial Solutions Opening (CSO) authority to the Department of Homeland Security and GSA, with a contract ceiling of $100 million [12]. The legislative package also includes the GSA's recommendation to raise the Acquisition Workforce Training Fund contribution from 5% to 7.5% [13].
In summary, the GSA's legislative package aims to streamline procurement by increasing thresholds for simplified acquisitions and CAS applicability, consolidating contracts under GSA's purview, reducing compliance burdens for contractors, encouraging use of innovative acquisition methods, and enhancing competition by removing procedural barriers. These reforms could significantly alter federal contracting by making processes more efficient and less burdensome while supporting innovation across agencies [1][2][3][4].
- The reformed federal workforce, equipped with updated training programs from the Federal Acquisition Institute and Defense Acquisition University, will be better positioned to navigate the workforce reimagined in the federal finance sector, which is anticipated to become more efficient with the proposed changes to federal procurement processes.
- With the implementation of the legislative package, the business environment in federal workforce contracting will experience a transformation, as the proposed measures allow for the use of innovative acquisition methods, increase efficient procurement through consolidation and centralization efforts, and promote competition by removing procedural barriers, ultimately fostering a more supportive environment for small tech firms and startups.
