The Government’s Three Main Acquisition Instruments

The way the Government buys things is generally perceived by the public as a single instrument, giant contracts that usually go to a large mega-corporation. This is often the “face” of Government acquisition, brought to you by the media and the entertainment industry. If you’re reading this, you probably know this is not the case, but let’s talk about the three major types of acquisitions today in order to help shape your understanding (and perhaps a new business approach)!

Overview:

The Government uses three different approaches to solving an acquisition problem. The approach used is based on a number of factors, but the two main drivers are dollar amount and efficiency. The approaches are micro-purchases, Federal Supply Schedule/Multiple Award Schedule orders and directly awarded contracts. 

The Types:

In general, estimated dollar amount is the primary “decision maker” for most agencies. As we cover these acquisition types below, I’ve listed them in order of what the Government tends to prefer when deciding how to go about getting a product or service:

1. Micro-purchases: These happen far more often than the other categories of procurement. Micro-purchases account for roughly 60% of transactions across the Government. Thousands of these take place a day, including purchases made by Government Purchase Card (GPC) holders across Federal agencies. With the threshold for micro-purchases raised to $15,000 as of October 1st of 2025, this may shift the balance of transactions even further. It is worth noting that while this is the most common acquisition method, micro-purchases still only account for about 10% of Federal spending, as just about every system of record (weapons, platforms or associated military or security systems) and service acquisitions easily exceed even the simplified threshold. The additional simplicity associated with these is that competition requirements are minimal under certain circumstances and that a Contracting Officer (CO) doesn’t have to be the one making the award. In fact, most of these transactions are made by GPC holders every single day under the technical supervision of a CO. 
2. Federal Supply Schedule/Multiple Award Schedule orders: In an earlier blog post, I mentioned that being awarded an indefinite delivery contract allows agencies to place orders against the contract. This is where this happens! COs use these contract pools because they eliminate a lot of the work involved with a direct contract award, like established pricing, a “built-in” competition mechanism and a process that’s understood in advance by those contract holders, avoiding some of the time lost in establishing that process in a brand-new acquisition. Agencies will also seek when needed to establish their own multiple-award pools to satisfy unique requirements that those Federal-level pools cannot meet. However, recent policy changes are attempting to centralize this capability within a handful of agencies. It remains to be seen to what extent this will happen. 
3. Direct (“stand-alone” Contracts):  When the first two aren’t appropriate, the CO will build a contract from the ground up, using the appropriate contract and competition type for the requirement and dollar threshold. Limited competition awards can take almost as much time to process as a full-and-open competition due to agency review and approval thresholds for limiting competition. Add to this the CO’s responsibility to determine and document everything from the type of contract to the award selection approach, and you can see why the other two types would be preferable!

Are there variations/subtypes to the above? Absolutely, but these three account for most Federal acquisitions, both in number of transactions and from an expenditure standpoint.