# How government buying works

> Who buys, where bids are posted, the dollar lines that change the rules, and how a bid differs from market research.

Last verified October 2026. Page: https://victavio.com/learn/how-government-buying-works

Government buyers come in three levels. Federal agencies buy for the whole country. State agencies buy for one state. Cities, counties, school districts and other local bodies buy for their own area. Each level has its own rules and its own places to post work.

## Where bids are posted

Federal agencies must announce most planned contracts worth more than $25,000 on SAM.gov, the government's official site for contract opportunities. There are exceptions, so not every purchase appears there. Anyone can search SAM.gov for free, and you do not need an account to read notices.

States run their own bid sites. In Texas, state agencies post on the Electronic State Business Daily (ESBD). Local buyers often use their own portals, and each one needs its own vendor account.

## The two dollar lines that change the rules

- **Micro-purchase threshold: $15,000.** Below this line, a federal buyer can usually buy without asking for competing quotes, often with a government purchase card. Buyers are supposed to spread these purchases among suppliers.
- **Simplified acquisition threshold: $350,000.** Buys up to this line use simpler, faster steps. Above $15,000 and up to $350,000, a buy is generally reserved for small businesses when the buyer expects offers from at least two capable small businesses at fair prices. People call this the "rule of two."

Above $350,000 the steps get more formal, with longer proposals and written evaluation plans. Some kinds of work, such as construction and certain service contracts, use different lines. The FAR definitions linked below list them.

## A bid is not the same as market research

Some notices ask for an offer. Others only ask for information.

- **Solicitations** (often called an RFQ, RFP or IFB) can lead to a contract. You send a quote, a proposal or a bid.
- **Sources Sought notices and Requests for Information (RFIs)** are market research. The buyer is learning who can do the work and how to buy it. Nobody gets a contract from a market research response, but answering one puts your name in front of the buyer early. It can also help decide whether the work is set aside for small businesses.

Read [Notice types in plain words](https://victavio.com/learn/notice-types) and [Sources Sought: why to answer them](https://victavio.com/learn/sources-sought) next.

## Past, present and future

Three free public sources tell you most of what you need:

- **The past:** USAspending.gov shows who won earlier contracts, from which office, and how much money was committed. It needs no login. It shows money committed, not unit prices, so use it as context.
- **The present:** SAM.gov shows the opportunities open today.
- **The future:** Many agencies publish forecasts of planned buys. Acquisition.gov keeps a list of links to agency forecast pages. A forecast is a lead, not a promise that a solicitation will post.

## Registration lets you be considered

To submit a federal offer, your business must be registered in SAM.gov at the time you submit. SAM.gov registration is free. Registration does not bring work by itself. It only lets buyers consider you. Finding the right bids, answering them well and following up is the real work.

## What this means for you

- Start from the work you already do well. Then find out who buys it.
- Read market research notices in your field and answer the good ones.
- Learn the two dollar lines. They tell you how a buy will run.
- Use the free government sites first. You never need to pay anyone to search SAM.gov or to register.

## Official sources
- [FAR 2.101: Definitions (micro-purchase and simplified acquisition thresholds)](https://www.acquisition.gov/far/2.101)
- [FAR 5.101: Methods of disseminating information](https://www.acquisition.gov/far/5.101)
- [FAR 19.502-2: Total small business set-asides](https://www.acquisition.gov/far/19.502-2)
- [FAR 4.1102: SAM registration policy](https://www.acquisition.gov/far/4.1102)
- [USAspending.gov](https://www.usaspending.gov/)
- [Agency recurring procurement forecasts](https://www.acquisition.gov/procurement-forecasts)

This lesson is general information, not legal advice. Rules change. Check the official source before you act.
Victavio is a Kilobytez LLC product.
Not a government agency. SAM.gov registration is free.