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Noncompetitive Procurement

 

Overview

There are specific circumstances in which noncompetitive procurement under 2CFR 200.320 (c) can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply:

(1) The estimated value of goods or services does not exceed the micro-purchase threshold;

(2) The item is available only from a single source;

(3) The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation;

(4) The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity or;

(5) After solicitation of a number of sources, competition is determined inadequate.

Single Source

Acquiring goods or services from a specific supplier even though there may be more than one supplier capable of delivering a compatible good or service due to contracting or warranty requirements. Also used in situations lacking a compatible option for goods or services. Retain records of communications and contracts related to the procurement.

Example(s):

  • Need for compatibility with an existing product.
  • A specific vendor holds the service contract for your point of sale system. Only this vendor can provide replacement parts and seeking out another service provider could void the warranty.
Emergency Procurement

Public exigency or emergency for the requirement will not allow time for a competitive procurement. Standard competitive procurement processes such as: reaching out to multiple vendors, posting a solicitation for bids, or awarding based on lowest cost are not required. Emergency procurement simply involves contacting potential vendors, explaining your situation, and determining if the price is “reasonable”. SFAs must plan for and develop a timeline to conduct a competitive procurement for future purchases once the emergency situation ends. Emergency contracts cannot be renewed. Retain records of communications and contracts related to the procurement including:

  • Contractor/supplier name

  • Contractor/supplier contact information and address

  • Contractor/supplier name of person supplying pricing

  • Purchase amount/contract value

  • Description of product and/or service being purchased/contracted

  • If applicable, duration of contract (contract term)

  • Reason for emergency

Example: Your meal provider terminates your contract mid-year without sufficient time to conduct a competitive procurement. Your SFA needs to ensure meal service is not interrupted and secures a new vendor as soon as possible.

Inadequate Competition

If after conducting a competitive procurement, it results in only one offer being received, the SFA should reach out to known offeror to determine if something about the procurement was too restrictive. For example, a short timeline for offeror to respond or specifications being too restrictive. If no issues limited competition among suppliers and only one offer was received, this is allowable as limited competition. The SFA must still try to negotiate the best price and terms as opposed to simply purchasing at the price and terms initially offered by the supplier. This helps to ensure that the SFA receives the best possible price and terms. It is recommended that during the last renewal year of the existing contract, the SFA conducts market research to determine if any new suppliers have entered the market. The SFA must incorporate any new known suppliers into the next solicitation process. Even if there are no new suppliers, the SFA must still complete (to the best of their ability) a competitive procurement. Retain records of communications and contracts related to the procurement.

Example:

  • Rural areas or geographic limitations. For example, the SFA needs to re-bid a milk contract. After conducting market research, there is only one supplier within the service area who can provide the product. There are no other suppliers who will service the area. Other known issues are milk distributors not being able to furnish a milk cooler and as a result, limits competition. The SFA should consider purchasing their own milk cooler to allow for future competition.

There are a few known suppliers, but the supplier(s) do not wish to submit a bid. This may be due to anticipated low order volume, small purchasing drop size, geography, or history of contracting issues with SFA. It is recommended that SFAs allow for up-to four optional renewal years to increase the estimated value of the contract and offset the investment a supplier needs to service the contract. Retain records of the suppliers no-bid response, if able to obtain. For example, an email or letterhead from the supplier.