Full competitive process
Full and open competition ensures that all responsible sources have an equal opportunity to compete for government requirements, thereby fostering transparency, fairness, and best value for taxpayers. Under FAR Part 6, the U.S. DoD must employ full and open competition whenever the following conditions are met:
- Multiple responsible sources exist: The requirement can be satisfied by more than one qualified and responsible contractor.
- No statutory or regulatory limitations apply: There is no law, program, or specific circumstance that justifies restricting competition.
- Feasibility of standard competitive methods: The Government can reasonably conduct the procurement using established competitive procedures such as sealed bidding or competitive proposals.
In practice, this means the contracting officer will use competitive solicitation methods to maximize participation and achieve the best value outcome.
Limited competitive process
While the default rule under FAR Part 6 is full and open competition, there are circumstances where competition is intentionally restricted but still occurs among a subset of eligible sources. This is referred to as “limited competition” and typically falls under two main categories:
- Full and Open Competition After Exclusion of Sources (FAR Subpart 6.2)
The Government may exclude one or more sources from competing for policy reasons authorized by law or regulation. Common examples include:
- Small Business Set-Asides: Restricting competition to small businesses or specific socio-economic categories.
- Industrial Base Considerations: Excluding certain sources to maintain or develop alternative suppliers for national security or readiness.
Even though some sources are excluded, the remaining pool still competes, so the process remains competitive within that group.
- Limited Sources Justification for Federal Supply Schedule Orders (FAR 8.405-6)
For orders placed under GSA schedules, FAR generally exempts these from FAR Part 6 competition rules. However, if the ordering activity restricts consideration to fewer vendors than normally required, it must prepare a Limited Sources Justification (LSJ). This ensures transparency and compliance even when narrowing the field within an existing competitive environment.
Even under limited competition, the Government must document the rationale for restricting sources and ensure that the process remains fair and competitive within the authorized pool.
Sole-source (non-competitive) awards
The FAR recognizes that in certain situations, full and open competition is not feasible or practical. In these cases, contracting officers may award contracts without competition, provided they justify the decision in writing through a Justification and Approval (J&A) document. The main statutory exceptions are:
- Only One Responsible Source (FAR 6.302-1): Applies when only one supplier can meet the Government’s requirements. Common reasons may include proprietary technology or intellectual property rights, unique capabilities or specialized expertise or follow-on contracts for continued development or production to ensure compatibility.
- Unusual and Compelling Urgency (FAR 6.302-2): Used when time is critical and delaying for a competitive process would harm the U.S. Government. For example, for emergency repairs to mission-critical systems, or rapid response to national security threats or disaster recovery.
- Industrial Mobilization; Engineering, Developmental, or Research Capability; or Expert Services (FAR 6.302-3): To maintain essential industrial base or unique research capabilities. This is often invoked for national defense readiness or continuity of critical programs.
- International Agreement (FAR 6.302-4): When an international treaty or agreement requires contracting with a specific source. This reason is common in foreign military sales or cooperative defence programs.
- Authorized or Required by Statute (FAR 6.302-5): Certain laws mandate contracting with specific entities or programs. For example, AbilityOne Program (mandatory source for certain supplies/services) and contracts with federally funded research and development centers (FFRDCs).
- National Security (FAR 6.302-6): When disclosure of the requirement or competition compromises national security. This typically applies to classified programs or sensitive technologies.
- Public Interest (FAR 6.302-7): This is rarely used as it requires written determination by the agency head that full competition is not in the public interest. It also must be reported to U.S. Congress.