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2 CFR 200 procurement rules, in plain language

The Uniform Guidance (2 CFR Part 200, Subpart D) sets the procurement standards every non-federal entity spending federal award funds must follow. This guide summarizes the thresholds, methods, and documentation auditors look for, so your team can decide which process a purchase needs before money is committed.

Procurement thresholds and methods

Thresholds come from the Federal Acquisition Regulation and are referenced by 2 CFR 200.320. Confirm the current figures and your own written policy limits before applying them.

Micro-purchase

At or below the micro-purchase threshold

Range: Up to $10,000 (2 CFR 200.320(a)(1); recipients may set a lower internal limit)
Competition expected: No quotes required if the price is considered reasonable and purchases are distributed equitably among qualified suppliers.
Documentation to retain: Price-reasonableness note, funding source, and the requester's authorization.

Small purchase / informal competition

Above micro-purchase, at or below simplified acquisition

Range: Up to $250,000 (2 CFR 200.320(a)(2))
Competition expected: Rate quotations from an adequate number of qualified sources.
Documentation to retain: Each quote received, the basis for selection, and any sole-source justification.

Sealed bids or competitive proposals

Above the simplified acquisition threshold

Range: Over $250,000 (2 CFR 200.320(b))
Competition expected: Formal solicitation, public advertising, written specifications, and a documented evaluation of responsive offers.
Documentation to retain: Solicitation, independent cost or price analysis, evaluation record, contract award, and — where applicable — prior written approval.

Sole source

Non-competitive procurement

Range: Any amount (2 CFR 200.320(c))
Competition expected: Permitted only for a single available source, a public emergency, written authorization from the awarding agency, or after competition is determined inadequate.
Documentation to retain: Written justification citing which condition applies, plus a cost or price analysis.

Requirements that apply at every dollar amount

Written procurement procedures

2 CFR 200.318(a) requires documented procedures that reflect applicable state, local, tribal, and federal law. Your internal thresholds may be stricter than the federal ones, and the stricter rule governs.

Conflict-of-interest standards

200.318(c) requires a written standard of conduct covering employees engaged in selection, award, and administration of contracts, including disclosure of financial or familial interests in a bidder.

Full and open competition

200.319 prohibits practices that restrict competition — unreasonable qualification requirements, unnecessary experience or bonding, brand-name-only specifications without an 'or equal' clause, or geographic preferences not required by statute.

Cost or price analysis

200.324 requires a cost or price analysis for every procurement above the simplified acquisition threshold, including contract modifications and change orders.

Small and minority business outreach

200.321 requires affirmative steps to solicit small, minority-owned, women's business enterprises, and labor-surplus-area firms whenever they are potential sources.

Records retention

200.318(i) requires records sufficient to detail the history of the procurement — rationale for the method, contractor selection or rejection, and the basis for the contract price.

Where single-audit findings usually come from

Splitting a single need into several smaller purchases to stay under a threshold.
Quotes gathered after the vendor was already chosen, or after the invoice was received.
Sole-source purchases without a written justification citing an allowable condition.
No cost or price analysis on a contract or change order above $250,000.
Missing conflict-of-interest disclosures for staff who selected the vendor.
Equipment or subaward costs charged without required prior written approval.

Test it against a real purchase

GrantGuard applies these thresholds, your award terms, and your own written policy to a purchase before it is authorized — returning the required method, documentation checklist, and cited sources.

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This guide is general information, not legal or audit advice. Always read the current text of 2 CFR Part 200 and your award terms. GrantGuard provides procurement workflow, documentation, marketplace, and compliance-support tools. AI-generated observations and platform recommendations assist human review and do not constitute legal, accounting, audit, procurement, or regulatory advice. Organizations remain responsible for determining applicable requirements, evaluating vendors, approving purchases, and making final procurement decisions.