In certain circumstances, a Sole Source or Single Source procurement may be necessary. In either case, the procuring department should begin by developing a statement of work/scope which defines the commodities, technology or services it is seeking to acquire. All purchasing requires pricing justification.
Single Source Purchase Justification
Definition: A Single Source procurement is one in which two or more vendors can supply the commodity, technology and /or perform the services required by an agency, but the department selects one vendor over the others.
Departments must state the circumstances leading to the selection of the vendor, any alternatives considered, rationale for selecting the vendor and how it was determined that the price was fair and reasonable.
Guidelines for Substantiating Single Source
- Past experience with a particular issue and this vendor has the historical knowledge or was the original installer.
- Experience with similar projects at other agencies or at other levels of government.
- Demonstrated expertise.
- Capacity and willingness to respond to an emergency situation.
Price Justification (Required):
- Competitive quote but other suppliers could not meet specifications.
- Comparison to product catalog.
- Comparison to similar product/service.
- Published price lists.
- Prices quoted are less than or equal to, those quoted to other governmental agencies.
- Records of previously bid items that were similar.
- Proven industry standard.
Documentation should be Sole/Single Source Justification Form (.docx) or memo on departmental letterhead, signed and sent to Procurement Services with the requisition.
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:
- Why is the item/service unique?
- How do you know that there is only one source for this item/service?
- The basis upon which the price/cost was determined to be fair and reasonable.
Guidelines for Substantiating Sole Source
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.
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.
Price Justification (Required):
- 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.
Download the Sole/Single Source Justification Form (.docx) or create a memo on departmental letterhead, signed and sent to Procurement Services with the requisition.