Restricting to a Group of companies & Sole Sourcing

When the government can Sole Source

As a rule, the government should compete contracts. However, they can sole source work to companies under certain circumstances:

  • Set-aside: If the company has certain set-asides (ED/WOSB, SD/VOSB, 8(a), HUBZone).
  • Micro-purchase: If the purchase price is less than $10K.
  • There is only one provider: If the government believes that only one company can deliver the product or service.
  • Unusual and compelling urgency: If there are an extraordinary circumstances. For example:
    • National disaster response
    • War time necessity
    • NOTE: Sole source awards under this justification should only last for the time needed to put a Band-Aid on the crisis. For example, when a hurricane strikes, the government issues a sole source award for 6 months of temporary housing to a hotel. During those 6 months, the government should craft a properly competed contract for housing services at the end of the 6-month sole source.
  • International agreement: If a foreign government is purchasing American made weapons, or if the US is engaged in operations in a foreign country, and that country requests products and services from a specific vendor.
  • Congressional mandate: There is a congressional requirement to purchase certain products and services from Prison Industries (products made by inmates) and Ability One (products and service provided by the disabled).
  • National security: If disclosing the governments need through a competitive process would compromise national security.
  • The public interest:This one is unclear. If people have seen this J&A used, please let us know.
  • Purchasing products derived from federal R&D: The federal government funds a tremendous amount of R&D into solutions that meet specific government needs.  If the government wants to buy tech that derives from federal funding they can generally sole source purchase it (a common example is the SBIR phase III sole-source)

When the government can restrict to a group

  • If they could have sole-sourced: The government can restrict competition to a specific group of companies if they could have sole-sourced (see above)
  • Simplified Acquisitions Process (SAP): For small-ish purchases the government can buy through SAP which allows them to:
    • Reach out to three companies
    • Get quotes from those three
    • Choose a winner
  • Because the government decides who to reach out to SAP effectively allowing the government to choose the bidder group

What the government is required to do to sole source/restrict to a group

  • Write a Justification and Approval (J&A): The government must write a memo identifying which sole-source justification they are using and explain their rationale for using it.
  • Publish the J&A: The J&A then is published on SAM.Gov
  • Approvals: The larger the award the higher level of sign-off required for sole-sources
    • By statute, contracting officers can sign off on sole-source awards up to $600,000
    • But each agency has a different approval policies.