Some consulting contracts just aren't worth the hassle. A lot of firms draw this line based on size. $10K is too small for some, $100K is too small for a few, and $1M is too small for, well, probably nobody-- especially now. Anyway, a firm's perspective on what is constitutes "too small" is largely dependent on client history, breadth of services, and contract flow.
There are fixed costs and dreaded hassles associated with executing any contract. So historically, there has been a clear incentive for both sides to include most or all of what will be needed and is affordable within the available budget. This traditional approach has helped avoid return trips to the contracting officer/admin's cube before the wounds from the last deal have healed.
So, what about consulting contracts below the FAR's $3K micropurchasing threshold? In 16 years, I've only done two. Based on this totally un-statistically valid sample size, I'd say they're used pretty sparingly BUT these low risk, low dollar buys have the potential to be the future of strategic consulting.
Here's why. We've all be stuck and can all relate to the feeling of (desperately) needing just a itty bitty tiny bit of help-- like just for a day or two. This is a basic reality of our professional lives that isn't going away. Right now you might be craving some extra arms and legs to get through the next deadline. Or maybe you're wishing you had access to a "been there, done that" confidant to help get through the crisis du jour. Microcontracts are perfect for these situations. On the other end of the spectrum, microcontracts can help spark ideas for stagnating programs by infusing some fresh energy and perspectives and insights.
With a streamlined acquisition process, a lot of agencies can make these purchases easily (even on a credit card) with no protracted RFP process, no lengthy review cycles, and no big commitment. With limited hours and a short duration, it's just observation, conversation, idea swapping, and recommendations. That's it. These microcontracts have tremendous potential now to be used more and more in the future because 1) agencies have well-know budget pressures, 2) program priorities are subject to broader political whims, and 3) trends and technologies are evolving so quickly.
Agencies benefit from the work itself while also avoiding some of the financial and political risk of letting a larger contracts. Consultants benefit from lowing their own delivery risk, getting a chance to better know a client (for money), apply their craft, and make a difference.