A federal agency may award a FAR sole-source contract only when one of seven narrow statutory exceptions to full and open competition applies, and only after producing a written justification, obtaining approval at a level tied to the contract’s dollar value, publicly posting the decision, and — in most cases — obtaining certified cost or pricing data from the contractor. FAR Part 6 treats competition as the default rule for federal procurement. Sole sourcing is the exception, and the regulation is written to keep it that way.
The Seven Authorities That Can Justify Skipping Competition
Every sole-source award has to rest on one of the authorities listed in FAR Subpart 6.302. Agencies cannot combine categories or stretch them to fit a procurement that does not genuinely qualify.
- Only one responsible source (6.302-1). The requirement can be met by a single contractor because of exclusive patent rights, proprietary technical data, or unique production capability. This is also the authority most commonly cited for follow-on contracts on major systems, where switching suppliers would create substantial unrecoverable cost duplication or unacceptable delay.1Acquisition.GOV. FAR 6.302-1 – Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements
- Unusual and compelling urgency (6.302-2). Delay would cause serious injury to the government. This authority covers only the minimum quantity needed to address the immediate situation while a competitive follow-on is arranged.
- Industrial mobilization (6.302-3). The government needs to keep a particular supplier or facility active for national defense readiness, even when current demand is low.
- International agreement (6.302-4). A treaty or agreement between the United States and a foreign government limits or specifies the source.
- Authorized or required by statute (6.302-5). A federal statute directs the agency to procure from a particular source or through a particular program.
- National security (6.302-6). Disclosing the government’s needs through a competitive solicitation would compromise national security. The regulation is specific about this one: the problem must be that the solicitation itself would reveal something damaging, not simply that the resulting work is classified or requires cleared contractors.2Acquisition.GOV. 48 CFR 6.302-6 – National Security
- Public interest (6.302-7). The agency head personally determines that competition is not in the public interest for a specific acquisition. This authority cannot be delegated, and Congress must receive written notice at least 30 days before award.3Acquisition.GOV. 48 CFR 6.302-7 – Public Interest
What Cannot Justify a Sole-Source Award
FAR 6.302-1 explicitly prohibits using sole-source authority to cover up a lack of advance planning by the requiring activity. Running out of time on a fiscal year budget is not a legitimate basis for skipping competition either. The regulation treats poor scheduling and expiring funds as internal agency problems, not as urgent circumstances that shift the burden onto the marketplace.1Acquisition.GOV. FAR 6.302-1 – Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements
Classified work, by itself, does not justify a sole source under the national security authority. That distinction catches agencies more often than it should.
The Justification and Approval Document
Before the contracting officer can negotiate a sole-source deal, FAR 6.303 requires a written Justification and Approval, universally called a J&A. The contracting officer certifies its accuracy.4Acquisition.GOV. FAR 6.303-1 Requirements
FAR 6.303-2 sets the minimum contents. The J&A must identify the agency, describe the requirement and its estimated value, cite the specific statutory authority relied on, and demonstrate that the proposed contractor’s qualifications or the nature of the work actually fit that authority. It must document market research: which databases were searched, which vendors were contacted, what the results showed. A boilerplate line that “no other sources were identified” will not survive scrutiny. Contracting officers are expected to show specific searches of government databases, industry publications, and direct outreach.5Acquisition.GOV. FAR 6.303-2 – Content The document must also list any companies that expressed written interest, describe efforts to solicit that interest, state the contracting officer’s determination that the proposed price is fair and reasonable, and lay out what the agency will do to restore competition for future acquisitions of the same requirement.
When the authority cited is a follow-on contract under 6.302-1, the J&A has to include an estimate of the duplicated costs the government would incur by switching contractors, and an explanation of how that estimate was calculated.
Who Has to Approve, and at What Dollar Level
The FAR routes larger sole-source decisions to more senior officials. For most civilian agencies:
- Over $900,000 up to $20 million: the competition advocate for the procuring activity must approve. This authority cannot be delegated.
- Over $20 million up to $90 million: the head of the procuring activity must approve.
- Over $90 million: the agency’s senior procurement executive must approve, an authority that also cannot be delegated (with a narrow exception for the Under Secretary of Defense for Acquisition and Sustainment).
For the Department of Defense, NASA, and the Coast Guard, the middle tier extends to $150 million and the senior procurement executive threshold begins above $150 million. Contracts at or below $900,000 still require a written justification, but the approval sits lower in the organization.6Acquisition.GOV. 48 CFR 6.304 – Approval of the Justification
Public Notice Before and After Award
Transparency runs on both sides of the award. Under FAR 5.201, the agency generally has to publish a notice of the intended contract action on SAM.gov before award, giving potential offerors a chance to respond and demonstrate they could do the work.7eCFR. 48 CFR 5.201 – General Skipping that step is one of the fastest ways to invite a successful protest, even when the chosen contractor genuinely is the only capable source.
After award, FAR 6.305 requires the J&A itself to be posted publicly on SAM.gov within 14 days. When the award was based on unusual and compelling urgency under 6.302-2, the deadline extends to 30 days, because the urgency that justified skipping competition often means the paperwork wasn’t fully polished at the time of award.8Acquisition.GOV. 48 CFR 6.305 – Availability of the Justification Public posting lets other businesses see the agency’s reasoning and decide whether a protest is worth filing.
Certified Cost or Pricing Data
Sole-source contractors face pricing scrutiny that competitive awardees mostly avoid. With no competing bids to establish a market price, the government relies on cost or pricing data from the contractor to verify that the proposed price is fair.
Under FAR 15.403-4, any negotiated contract expected to exceed $2.5 million requires the contractor to submit certified cost or pricing data covering labor rates, material costs, overhead, and subcontractor quotes, unless an exception applies.9Acquisition.GOV. 15.403-4 Requiring Certified Cost or Pricing Data For defense contracts awarded after June 30, 2026, the FY2026 National Defense Authorization Act raises this threshold to $10 million.
If the government later discovers that certified data was defective — inaccurate, incomplete, or not current at the time price was agreed to — the government is entitled to a downward price adjustment plus interest on any overpayments. Sole-source status offers no shield. When the defective data was submitted knowingly, the government can recover penalty amounts equal to the full overpayment on top of the price adjustment.10Acquisition.GOV. Defective Certified Cost or Pricing Data
Small Business Sole-Source Set-Asides
Several FAR provisions let agencies award sole-source contracts directly to qualified small businesses without competing the work against the full market. Each program carries its own dollar ceiling; exceeding the ceiling triggers full competition.
Under the SBA’s 8(a) Business Development Program, a formal justification under FAR 6.303 is required only when the anticipated value exceeds $8.5 million for manufacturing requirements or $5.5 million for all other work.11Acquisition.GOV. Contracting With the Small Business Administration – The 8(a) Program Service-Disabled Veteran-Owned Small Business sole-source awards are capped at $8.5 million for manufacturing and $5 million for other NAICS codes.12Acquisition.GOV. 19.1406 Sole Source Awards HUBZone ceilings sit at $8.5 million for manufacturing and $5.5 million for other requirements.13Acquisition.GOV. HUBZone Sole-Source Awards Women-Owned and Economically Disadvantaged Women-Owned Small Business awards follow the same $8.5 million manufacturing and $5.5 million non-manufacturing thresholds.14Acquisition.GOV. Women-Owned Small Business Program Sole-Source Awards
Challenging a Sole-Source Award
A contractor that believes an agency improperly justified a sole-source award can file a bid protest with the Government Accountability Office. Standing is limited to an “interested party,” meaning an actual or prospective contractor whose direct economic interest would be affected by the award.
Timing is unforgiving. A protest challenging a contract award must be filed within 10 calendar days of when the protester knew or should have known the basis for the protest. If a deadline falls on a weekend or federal holiday, it extends to the next business day. GAO enforces these deadlines strictly, and missing the window by one day ends the protest.15U.S. GAO. FAQs
GAO does not second-guess an agency’s technical judgment. The review asks only whether the agency had a reasonable basis for its decision. A protester who simply disagrees with the outcome will lose; the protester has to show the agency acted unreasonably by, for example, failing to conduct adequate market research, ignoring a qualified alternative source, or citing an authority that doesn’t fit the facts. The J&A’s public posting is often the protester’s first real look at the agency’s reasoning, which gives the 14-day posting requirement practical significance beyond transparency.
GSA Schedule Orders Follow a Different Track
Orders placed under GSA Federal Supply Schedules are exempt from the Part 6 competition requirements, but they are not a workaround. FAR 8.405-6 still requires a written justification when an ordering activity restricts consideration to a single schedule contractor, and the acceptable reasons mirror the broader sole-source authorities: only one source can meet a unique or highly specialized need, an urgent and compelling need makes standard procedures impractical, or the order is a logical follow-on to an earlier schedule order that was itself competitively awarded.16Acquisition.GOV. Limiting Sources When a limited-source schedule order exceeds the simplified acquisition threshold, the notice and justification must be posted on SAM.gov within 14 days of award for at least 30 days, and 30 days after award for urgent orders.