Sole Source Contract

A sole source contract is awarded to a single vendor without competition. Agencies can justify sole source awards when only one vendor can meet the requirement, for urgent needs, or under certain small business programs.

How It Works

Sole source contracts require documented justification. Valid reasons include: unique capability, urgency, statutory authority (like 8(a) sole source), follow-on contracts, or industrial mobilization. The 8(a) program allows sole source awards up to $4.5M for goods and $7M for services. SDVOSB sole source limits are $7M for services and $4.5M for goods. While sole source eliminates competition, the government still negotiates for fair and reasonable pricing.

Example

A specialized environmental remediation firm is the only company with the specific EPA certification needed for a hazardous waste cleanup. The agency issues a sole source contract because no other vendor can perform the work.

Related Terms

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