Fed Bumps Up Buying Thresholds to Beat Inflation Blues
Published Date: 8/27/2025
Rule
Summary
The FAR Council is updating certain government buying rules to keep up with inflation, making sure dollar limits for contracts reflect today’s prices. This affects federal agencies and contractors by raising some spending thresholds starting in 2025, so bigger deals can happen without extra paperwork. These changes don’t touch construction wages or trade agreements but do help streamline government purchases overall.
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Statutory Thresholds Raised for Inflation
If you do business with the federal government, statutory dollar thresholds for buying goods and services will be increased for inflation starting in 2025. The FAR Council will adjust these statutory acquisition-related thresholds every five years using the Consumer Price Index for all urban consumers (CPI‑U), which lets some larger purchases proceed without extra paperwork.
Nonstatutory FAR Thresholds Adjusted
In 2025, the FAR Council will also apply the same CPI‑U inflation method to adjust nonstatutory FAR acquisition-related dollar thresholds. This means additional FAR threshold amounts (beyond those required by statute) will be raised in 2025 to reflect current prices.
Certain Thresholds Not Adjusted
Some rules are excluded: the Construction Wage Rate Requirements statute, the Service Contract Labor Standards statute, performance and payment bond thresholds, and trade agreements thresholds will not be adjusted for inflation. If your contracts are governed by those statutes or thresholds, the dollar limits will not change under this rule.
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