10 USC 2304: Full and Open Competition, Exceptions, and Protests

The federal competition statute once codified at 10 USC 2304 was repealed and reorganized effective January 1, 2022. Its full and open competition mandate for defense procurement now lives primarily at 10 U.S.C. 3201, and the seven exceptions that used to appear at 2304(c) now sit at 10 U.S.C. 3204. The substance did not change. If you are reading an older contract, regulation, or court decision that cites Section 2304, the requirement it describes is still in force under a new number.¹

Where Section 2304 Went

Congress reorganized Title 10’s acquisition statutes through the National Defense Authorization Act for Fiscal Year 2021 (Public Law 116-283). The Federal Acquisition Regulation was updated in December 2022 to reflect the new numbering.² The mapping most people need:

Old 2304(a), the full and open competition requirement, is now 10 U.S.C. 3201.
Old 2304(c), the exceptions to competition, is now 10 U.S.C. 3204.
Old 2304(c)(1) through (c)(7), the seven specific exception categories, are now 10 U.S.C. 3204(a)(1) through (a)(7) in the same order.
Old 2304(g) and 2305, covering simplified acquisition and solicitation requirements, are now 10 U.S.C. 3205 through 3208.

The competition rules originally enacted through the Competition in Contracting Act of 1984 continue to shape virtually every defense procurement.³ Civilian executive agencies operate under a parallel provision at 41 U.S.C. 3301.⁴

What the Competition Requirement Actually Says

Under 10 U.S.C. 3201, an agency head conducting a procurement must obtain full and open competition through competitive procedures and must choose the competitive method best suited to the circumstances.⁵ The Federal Acquisition Regulation implements the statute through FAR Part 6.⁶

Solicitations must describe what the government actually needs, not the features of a favored vendor’s product. Contracting officers must publicize proposed contract actions expected to exceed $25,000 on SAM.gov so potential bidders can find them.⁷ Market research through Requests for Information or Sources Sought Notices is how agencies confirm before they solicit that meaningful competition is actually possible.

Sealed Bids or Competitive Proposals

The statute recognizes two main competitive methods. The contracting officer must use sealed bidding when four conditions are met: there is enough time for bidders to prepare and submit bids, the award will be based on price and price-related factors, there is no need to discuss bids with vendors, and the agency reasonably expects to receive more than one bid. When any of those conditions is missing, the agency uses competitive proposals instead.⁵

Sealed bidding is straightforward. The lowest responsive, responsible bidder wins. Competitive proposals allow the agency to weigh technical capability, management approach, and past performance alongside price. Most complex defense and IT procurements use competitive proposals because price alone rarely captures everything the government needs to evaluate.

Thresholds That Change the Rules

Not every purchase runs through full competitive procedures. As of October 2025, the simplified acquisition threshold is $350,000, meaning purchases at or below that amount follow streamlined procedures with less paperwork and faster timelines.⁸ Below that sits the micro-purchase threshold of $15,000, where contracting officers can buy with minimal competition requirements, essentially using a government purchase card.⁹ Those figures rose from $250,000 and $10,000 respectively, effective October 1, 2025.

The Seven Exceptions Under 10 U.S.C. 3204

Full and open competition is the default, but Congress recognized that rigid adherence would sometimes be impractical. Section 3204 lists seven circumstances in which an agency may use other-than-competitive procedures.¹⁰ Each requires a written justification and approval at the appropriate level within the agency, implemented through FAR Subpart 6.3.¹¹

(a)(1) Only one responsible source. The goods or services are available from a single source and nothing else will meet the agency’s needs. Agencies must post a notice of intent to award, giving other vendors a chance to demonstrate they can meet the requirement.

(a)(2) Unusual and compelling urgency. The government would be seriously injured by the delay of a full competition. Disaster response is a classic example. The contract should be limited in scope and duration to the immediate need; long-term follow-on work still requires competition.

(a)(3) Industrial mobilization, essential R&D capability, or expert services. Covers maintaining a supplier or facility for national emergency mobilization, preserving an essential research or development capability at a nonprofit or federally funded research center, and hiring expert witnesses or neutrals for government litigation or dispute resolution.

(a)(4) International agreement. A treaty or international agreement effectively requires purchase from a particular source, or a foreign government paying the cost directs a specific vendor.

(a)(5) Authorized or required by statute, or brand-name resale. Another law expressly authorizes procurement through a specific agency or source, or the agency needs a brand-name commercial product for authorized resale, such as items sold in military commissaries.

(a)(6) National security. Publicly disclosing the agency’s needs would compromise national security. Even under this exception, agencies are expected to solicit from pre-cleared contractors with the required clearances rather than hand the contract to one firm.

(a)(7) Public interest. The agency head personally determines that competitive procedures are not in the public interest for a particular procurement. This authority cannot be delegated, and Congress must receive written notice at least 30 days before award. The notification requirement is why this exception sees very little use.

Publishing the Justification

When an agency invokes any of these exceptions, the justification and approval document must be posted publicly on SAM.gov within 14 days of contract award and must remain posted for at least 30 days. For urgency-based awards under (a)(2), the deadline extends to 30 days after award. For brand-name justifications, the document must be posted with the solicitation itself. Contracting officers must scrub proprietary data before posting, but that screening cannot delay the publication timeline.¹²

Small Business Set-Asides Sit Alongside These Rules

Full and open competition coexists with a large body of law reserving federal contract dollars for small businesses. Under the “rule of two,” a contracting officer must set aside an acquisition for small businesses when there is a reasonable expectation that at least two responsible small business concerns will submit competitive offers at fair market prices.¹³ For purchases between the micro-purchase and simplified acquisition thresholds, the set-aside is essentially automatic unless the contracting officer affirmatively finds that expectation is missing.

The FAR also identifies socio-economic categories that receive preferential treatment: the 8(a) Business Development Program for small disadvantaged businesses, HUBZone small businesses, Service-Disabled Veteran-Owned Small Businesses, and Women-Owned Small Businesses (including the economically disadvantaged subcategory). Each supports both competitive set-asides and, in certain cases, sole-source awards.¹⁴ A set-aside limits the pool of bidders but is not itself an exception to competition under Section 3204; the competition happens among the eligible firms.

What Losing Bidders Can Do

Because Section 3201’s competition mandate is enforceable, contractors who believe an agency violated it have real remedies. Unsuccessful offerors have the right to request a formal post-award debriefing, and the deadline is tight. The written request must reach the agency within three days after the offeror receives notice of the award. Missing that window forfeits the entitlement, though the agency may still accommodate a late request at its discretion.¹⁵ The debriefing matters beyond understanding the loss; it shapes whether a bid protest is worth filing and starts certain protest clocks.

A contractor who believes the government violated procurement rules can file a bid protest at the Government Accountability Office or the U.S. Court of Federal Claims. GAO is the more common route, and its automatic stay of contract performance is the reason. To trigger that stay, the protest must reach GAO within 10 days of the contract award, or within 5 days after a required debriefing, whichever is later.¹⁶ For Department of Defense procurements with enhanced debriefings, the 5-day window does not start until the government delivers written answers to the offeror’s post-debriefing questions. Once a timely protest is filed, the contracting officer generally cannot authorize performance to begin, or must direct a stop-work if performance has already started.

The agency head can override the stay by issuing a written finding that performance is in the best interests of the United States or that urgent and compelling circumstances require it. Overrides happen but are not routine. Agencies usually prefer to wait for GAO’s decision rather than risk a sustained protest forcing a re-competition after work has already begun.¹⁶

1
Office of the Law Revision Counsel. 10 U.S. Code 2304 – Repealed
2
Federal Register. Federal Acquisition Regulation: Update to Title 10 Citations
3
Congress.gov. Competition in Contracting Act of 1984
4
Office of the Law Revision Counsel. 41 U.S. Code 3301 – Full and Open Competition
5
U.S. Government Publishing Office. 10 U.S. Code 3201 – Full and Open Competition
6
Acquisition.GOV. Federal Acquisition Regulation Part 6 – Competition Requirements
7
Acquisition.GOV. FAR Part 5 – Publicizing Contract Actions
8
Department of Energy. PF 2026-05 Federal Acquisition Circular (FAC) 2025-06
9
FEMA. Increases to the Federal Micro-Purchase and Simplified Acquisition Thresholds
10
Office of the Law Revision Counsel. 10 U.S. Code 3204 – Use of Procedures Other Than Competitive Procedures
11
Acquisition.GOV. FAR Subpart 6.3 – Other Than Full and Open Competition
12
Acquisition.GOV. FAR 6.305 Availability of the Justification
13
Acquisition.GOV. FAR 19.502-2 Total Small Business Set-Asides
14
Acquisition.GOV. FAR 19.000 Scope of Part
15
eCFR. 48 CFR 15.506 – Postaward Debriefing of Offerors
16
Office of the Law Revision Counsel. 31 U.S. Code 3553 – Review of Protests; Effect on Contracts