SOLE SOURCE PURCHASE JUSTIFICATION
Definition: Sole source procurement is one in which only one supplier can provide the commodity, technology and /or perform the services required.
Every order, not on State Contract, that cannot be competitively bid, and is over $2500, must be documented as a sole source. The explanation must be maintained in the Procurement file.
The explanation must have three components:
l. Why is the item/service unique?
2. How do you know that there is only one source for this item/service?
3. The basis upon which the price/cost was determined to be fair and reasonable.
GUIDELINES FOR SUBSTANTIATING SOLE SOURCE
l. Why is the item/service unique?
- A description of the feature(s) that make the item/service unique and why you need this uniqueness.
- Compatibility with, or component of, an existing item; provide enough detail to demonstrate that compatibility is necessary.
- Original manufacturer/supplier, i.e. software, license.
- Supplier holds a service contract and must supply parts to accomplish a contract.
- Emergency order and no other supplier available at the time.
- Proprietary purchase, no other supplier available.
2. How do you know that there is only one source for this item/service?
- Advertise in the Contract Reporter and receive only one response (over $50,000).
- Requested quotations and no one else responded.
- Google search.
- Proprietary purchase, no other supplier available.
- Phone calls to competitors.
3. Price Justification
- Comparison to product catalog.
- Comparison to similar product/service.
- Published price lists.
- Prices quoted are less than or equal to, that quoted to other governmental agencies.
- Records of previously bid items that were similar.
- Proven industry standard.
Documentation should be on departmental letterhead, signed and sent to Procurement Services with the requisition.