U.S. Federal Contracting Featured Insights | TILLIT LAW PLLC

Sareesh Rawat, Esq.

Specialized foreign or small business contractors interested in receiving sole source contract awards should be aware of the federal government’s general policies favoring full and open competition amongst prospective contractors. The Competition in Contracting Act (CICA), codified at 10 U.S.C. § 2304 and § 3301, guarantees full and open competition in soliciting offers and awarding federal contracts. The Federal Acquisition Regulations (FAR) generally require contracting officers to provide full and open competition unless one of the seven limited exceptions to full and open competition applies. These limited exceptions are listed in FAR subsections 6.302-1 through 6.302-7. Even when one of these limited exceptions is applicable, the FAR requires contracting officers to solicit offers from as many potential sources as practicable under the circumstances, prohibiting sole source awards based on a lack of advance planning or concerns relating to the expiration of appropriated funds.

Contractors are likely familiar with the well-known sole-source exception to full and open competition. This sole source exception is provided in FAR 6.302-1 and is applicable in situations where only one responsible source exists to satisfy agency requirements. FAR 6.302-1 outlines three specific contractual scenarios where contracting officers are permitted to conduct procurements on a sole source basis by determining that only one responsible source exists to satisfy government requirements.

• Unsolicited Research Proposals. The FAR permits contracting officers to consider supplies or services available from a single source when a prospective sole-source contractor has submitted an unsolicited research proposal. The unsolicited research proposal, however, should meet specific requirements:

• The unsolicited research proposal must demonstrate a unique and innovative concept or demonstrate that the prospective sole source contractor has a unique capability to provide the proposed research services.
• The unsolicited research proposal must also offer a concept or service otherwise unavailable to the government.
• Finally, the unsolicited research proposal must resemble a pending competitive acquisition.

• Follow-on Contracts Involving Major Systems or Highly Specialized Equipment. The FAR permits contracting officers to acquire products on a sole source basis under follow-on contracts that involve the continued development or production of a major system or highly specialized equipment. This includes follow-on contracts for such major components of major systems or highly specialized equipment. Additionally, contracting officers should make the determination that not awarding the follow-on contract on a sole source basis would lead to:
  • The government incurring substantially duplicated acquisition costs that could not reasonably be recovered by competing the requirement.
  • The government suffering unacceptable delays in fulfilling its requirements.

• Follow-on Defense Contracts Involving Highly Specialized Services. For acquiring highly specialized services under DoD, NASA, and Coast Guard projects, the FAR permits contracting officers to again consider sole source acquisition for follow-on contracts. Similar to contracts for products discussed above, contracting officers must make the determination that not awarding the follow-on contract on a sole source basis would lead to:
  • The government incurring substantially duplicated acquisition costs that could not reasonably be recovered by competing the requirement.
  • The government suffering unacceptable delays in fulfilling its requirements.

FAR 6.302-1 also contemplates several suitable applications where contracting officers may utilize this sole source authority. For instance, products or services may have to be acquired from only one source due to restrictions raised by the existence of limited rights in data, patent rights, copyrights, or other similar circumstances. Contracting officers must support their sole source decisions with written justifications and approvals. Finally, contracting officers must also publish notifications of such sole-source solicitations following the requirements of FAR 5.201, allowing prospective contractors interested in such procurements to respond.

This U.S. federal procurement insight provides a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more may consult their TILLIT LAW PLLC client portal or contact their attorney to determine how the law would apply in a specific situation.