Any company doing business with the government needs a full understanding of the Federal Acquisition Streamlining Act of 1994 (FASA). It effectively modernized the contracting process for government work, ultimately making it easier for small and medium-sized businesses to get into the game. Fewer paperwork requirements helped facilitate the awarding of government contracts using electronic means.

In short, when your organization works in government IT, expect FASA to become a regular part of your company’s operations. What follows is a quick overview of its most important points and how they affect your business.

A Faster Process for Smaller Purchases

One of the major changes ushered in by FASA involved reclassifying small government purchases from anything $25,000 and under, to a value between $3,000 to $100,000. More importantly, any purchase order under this new classification could take advantage of simplified acquisition procedures.  Before FASA, it wasn’t cost effective for these smaller organizations to bid on government contracts considering the additional effort required to comply with the additional restrictions and regulations.

The bottom line: It reduced administrative costs while providing more opportunities for small companies to do business with the government.

Electronic Purchase Orders

As noted earlier, the reduction of paperwork is one of main reasons behind the passing of FASA. As such, government agencies are mandated to use electronic means for the processing and approval of the small government purchases known as Simplified Acquisition Purchases (SAP). Essentially, the government started down the path towards eCommerce 25 years ago.

Additionally, FASA encouraged government employees to use credit cards for newer micro-procurements valued from $2,500 to $20,000. Once again, the ultimate goal involved reducing paperwork and making the PO process more efficient, while also improving competition with more companies able to bid on contracts. Small businesses accepting credit cards benefit from the policy.

A Preference for Commercial Off-the-Shelf Items

FASA also instituted a policy identifying commercial products as preferred, provided they meet the specific government need detailed in a purchase order. Exceptions to this policy are allowed, but they need to be justified by the government agency.

Companies and subcontractors working in government IT need to understand this additional aspect of FASA. In short, the increased use of commercial items means fewer requirements for government contractors. Projects greater than $100,000 are still subject to the standard government specifications and procedures.

Ultimately, FASA definitely makes it easier for smaller IT contractors to do business with the government. Take advantage of the various benefits this act has created to increase the amount of business your company executes.

If you need additional insights on subcontracting on government work, speak with the knowledgeable team at Entrust Solutions. Our experience helps you build your business and/or grow your career.


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