GSA's $40B SmartPay Program Needs SaaS Compliance Layer ($16M ARR)

A five-line regulatory change is about to unleash $2 billion in trapped government software spending. The feds just raised their "buy it now" threshold by 50%. Nobody's built the pipes yet.

On November 29, the FAR Council dropped a proposal that most people ignored: the federal micro-purchase threshold would jump from $10,000 to $15,000. Sounds like bureaucratic minutiae. It's not.

The micro-purchase threshold will increase from $10,000 to $15,000, and FPDS data indicates that between the current MPT and the proposed threshold value of $15,000, another 49,321 awards were made. That's a 9% expansion of quick-buy territory overnight.

Here's what everyone missed: This isn't about office supplies. It's about software.

The federal government's SmartPay program processed billions in purchases last fiscal year — GSA's Commercial Platforms Program alone supports 40,000+ cardholders across 35+ agencies. These cards are the government's credit card — swipe and go, no RFP needed. But here's the friction: while GSA's Commercial Platforms Program streamlines micro-purchasing for routine commercial products, nobody's cracked the code for SaaS.

Try to buy Slack for your federal team today. You'll navigate Section 508 accessibility forms, mandatory source checks, and pray your purchase doesn't trigger an audit for "split purchasing" violations. Even at the micro-purchase level, compliance requirements don't disappear — they just get slightly simpler. The maze still turns a five-minute purchase into a multi-week ordeal.

The Play: Build "GovCart" — Compliance-as-a-Checkout

GovCart isn't another marketplace. It's a compliance engine with a buy button.

Think of it as TurboTax for government SaaS purchases. You click "buy," GovCart handles the ugly: Section 508 requires an Accessibility Conformance Report for all ICT purchases, Part 8 source checks, anti-split controls, audit trails. Everything that makes procurement officers sweat at night, automated.

The magic: encode the rules once, sell the workflow forever.

Why This Window Won't Stay Open

Three converging forces make this a now-or-never play:

1. The Policy Tailwind
The Government wide commercial purchase card shall be the preferred method to purchase and to pay for micro-purchases. Translation: Cards aren't optional — they're doctrine. And the threshold jump means thousands more software buys just graduated from "get three quotes" to "just buy it."

2. The Compliance Crisis
Federal buyers face a Catch-22. Section 508 compliance applies to micro-purchases, requiring vendors to provide Accessibility Conformance Reports based on VPATs. Most SaaS vendors have no idea what a VPAT is. Most federal buyers don't have time to teach them.

GovCart pre-packages this. Vendors upload their VPAT once, GovCart generates compliant purchase packages for every federal buyer. The friction disappears.

3. The GSA Gap
GSA's Commercial Platforms Program represents a streamlined channel through which agencies can acquire commercial off the shelf products quickly. But it's explicitly designed for routine commodity items — office supplies, not SaaS subscriptions. Software purchases still face unique compliance hurdles even at the micro-purchase level.

GovCart fills this gap by focusing on micro-purchases where simplified rules apply — though compliance never fully disappears. SAM registration can be excepted for true micro-purchases using cards. Section 508 still applies but can be systematized.

The Numbers (Based on Federal Data)

Let's get specific about the market size:

GSA SmartPay processed $28.7 billion in FY2020
Commercial Platforms Program alone supports 40,000+ cardholders across 35+ agencies
The average number of Federal awards at or below the current MPT during FY 2022-2024 was approximately 562,324
The proposed change would add ~49,000 awards between $10K-$15K

Conservative math: If just 5% of micro-purchases involve software (unverified but plausible), that's 28,000 transactions annually. At an average of $7,500 per transaction, that's $210 million in addressable GMV immediately.

Take an 8% platform fee (standard for procurement platforms), and you're looking at $16.8M in annual recurring revenue just from transaction fees. Add compliance services, and the number doubles.