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Sole Source Justifications -
Buying from a Single Source

What is a Sole Source?

A sole source can be defined as a situation in the marketplace where there is clearly and legitimately a single source of supply to meet your requirements.

In the purchasing process, requirement means a pertinent need explained by how the product or service will be used in your operation or setting.

Example: In a Drama School production, the pertinent need for a hammer would be to have an object that looks like a hammer. Presumably, an inexpensive hammer would be sufficient. In contrast, a carpenter using a hammer as his primary trade tool, might need written specifications to adequately describe a hammer with the proper head, handle, joining, length, striking face, weight, finish, etc. The carpenter would be able to explain to a person knowledgeable in hammers, such as a hardware sales representative, why each feature would be required.

Another key phrase is single source. Making the determination that there is a single source of supply is a two-step process:

  1. Determine whether there is only one brand which can meet your requirements. Use your list of requirements to examine competing products available in the marketplace to determine how many can meet your pertinent needs. You may conclude there is only one brand which can meet your requirements.
  2. Determine if this brand can only be acquired from a single source of supply. When there is a legitimate reason to restrict competition to a single brand, there may be several sources of supply for the brand selected. You have not determined there is a sole source meeting your requirement until you have addressed both the issue of sole brand and whether that brand is available from only one source of supply.

How Do I Write a Sole Source Justification?

Of course, the Buyer in Purchasing must concur with your sole source statement and can be a source of information about potential suppliers. It is frequently useful to give the buyer a call and work through the information you have.

Avoid False or Misleading Statements

Be careful to make an accurate, truthful statement. If you don't know, it's best to say you don't know. Statements such as "We know of no other vendor from whom this item is available" are appropriate. It's a gross misdemeanor for a state employee to knowingly make a false statement or writing in connection with their duties as a state employee. This includes making a false statement about your requirements or a false statement about a single source of supply.

Search the Marketplace

You search the marketplace to find out what is available in the technology. The more money involved, the more effort should be put into search for potential sources of supply. Several phone calls may be sufficient to document a sole source for a purchase totaling $5,000. For a purchase involving several hundred thousand dollars, the Buyer may wish to send out a Request for Information to potential suppliers, asking for details about the product they supply. If you already have enough information abut what is available to determine that there is only one possible source of supply, briefly describe the process you used.

  1. List the requirements which could not be met by other sources.
  2. State which vendors were contacted, and how their product was deficient in meeting your requirements.
To save yourself some time, supply your Buyer with a list of requirements and they can perform the search for you.

If you are certain there is truly only one source of supply, by all means let the buyer know by writing a sole source statement and save everyone's time and avoid the delay a pointless and costly search of the marketplace.

Compatibility/Continuity

You may have a bona fide need to continue buying a brand of product which you purchased previously when no other source can supply you with a compatible product.

Describe what you currently own (referring to the original requisition number if you can) and state that you have no other way to acquire compatible accessories, service, etc., except to go back to the vendor who originally sold you the product.

You may need a product identical to one you have already purchased for continuity in, or replication on, a research project. Explain that your situation dictates you cannot vary the product, because it is a research variable you need to control. Giving the original requisition number helps to document your sole source statement.

Economic Justification

There are situations when there is an economic reason for purchasing a product from a single source of supply.

Example: Your department owns a centrifuge, including $15,000 worth of rotors. You need a new centrifuge to handle additional workload volume. Since the rotors cannot be interchanged between brands, if you purchase a different brand of centrifuge you'll have to purchase approximately $15,000 worth of new rotors. Since the purchase price of the centrifuge is $30,000, it is inconceivable that you could purchase $45,000 worth of goods from a competing vendor for $30,000. Furthermore, you would incur additional training costs by changing brands.

It is important to note that price alone does not constitute an economic justification; there must be a technical element (such as rotor compatibility) as well. If the only justification is one of price, the Buyer is required to seek competition.

The law allows Buyers to take the life cycle cost of owning and operating a product into consideration. Examining the life cycle cost can sometimes lead to a economically justifiable reason for purchasing from a sole supplier.