Download the Sole Source Form. (Acrobat).

Click on the logo to download a copy of Adobe Acrobat Reader.

---

Sole Source Procurements

Purpose. To establish an effective sole source procurement procedure that complies with OU Regents Policies.

Background. Sole source procurements have always been controversial. On the one extreme there are those who assert that there is no such thing as a sole source procurement, while on the other there are those who believe that practically every procurement could qualify as one. Somewhere in between there exists a rightful place for sole source procurements.

Basis. This procedure draws heavily from the Oklahoma State Statutes, Title 74, Section 89. The entire Title

comprises the Oklahoma Central Purchasing Act, and Section 89 specifically deals with sole source procurements. As a result of the passage of House Bill 1822 during the 1997 Oklahoma Legislative session, several changes and improvements were made to the sole source procurement requirements. HB 1822 is now part of Title 74, and the new sole source procurement provisions are law for those agencies that are subject to the Central Purchasing Act. In general, the University of Oklahoma is not subject to the Central Purchasing Act. However, where it is prudent to do so, the University of Oklahoma encourages compliance.

Sole Source Procurement Defined. A sole source procurement is any contract for a particular acquisition which, by the contract specifications needed by the requestor or by the clear and specific restrictions imposed by a funds provider, restricts the contract to one bidder or to one brand name.

Sole Source Procurement Discussed. Sole source procurements may arise from a number of circumstances. Among them are:

1. Equipment for which there is no comparable competitive product, for example, a one-of-a-kind oscilloscope that is available from only one supplier.
2. Public utility services from natural or regulated monopolies.
3. A component or replacement part for which there is no commercially available substitute, and which can be obtained only from the manufacturer.
4. An item where compatibility is the overriding consideration, such as computer operating software enhancements for an existing system.
5. A used item, for example, a television transmitter tower, that becomes immediately available and is subject to prior sale.
6. A supply, equipment, part, service or supplier that, due to technically constraining factors associated with scientific research, are needed to ensure the fairness and validity of the underlying research.
7. A supply, equipment, part, service or supplier that is specifically and clearly required by a grantor, contractor, donor, or other provider of funds where the usage of those funds is specifically, explicitly, and clearly restricted by the grantor, contractor, donor, or other provider.

There are two types of sole source assertions.

1. Supplier - This type of sole source asserts that one and only one supplier is capable of delivering the good or service needed, and that the supplier is peculiarly qualified in the entire market place to do so.
2. Brand name - This type of sole source asserts that one and only one brand of good or service is capable of addressing the need, and that the brand is peculiarly capable in the entire market place to do so.

When determining whether a potential procurement is truly sole source, you should provide competent and cogent justification based upon one or more of the circumstances discussed above and/or based upon one or both of the assertions discussed above. Other circumstances or assertions may exist as well, and you should document them.

The sole source determination shall not be based upon personal or professional preference. Justification shall be objective rather than subjective.

The sole source determination is further based upon a critical element of professional judgment, which finds that conducting competitive bid procedures will actually delay and aggravate the results of the procurement. While this situation is rare, it can arise and is a deciding factor. The pertinent question is: if we bid this procurement do we reasonably expect to add value and do we reasonably expect the outcome to be different than the sole source that is apparent thus far? In interpreting and applying this element, you should be conservative and not aggressive. If you are involved in a sole source procurement you should document your conclusions to this question in the process of completing the Sole Source Affidavit.

A major component of a sole source procurement is the determination of fairness of price. Even though a material, service, or supplier may truly fit the conditions of sole source, you should demonstrate that the related price is fair and reasonable.

A sole source procurement is preferable to a formal competitive bid procedure in which the specifications for the required material or service are written so narrowly that the outcome has no chance but to be the same as if a sole source was executed. Performing such bid procedures is harmful because it skirts sole source reporting requirements. Further, it can aggravate suppliers and others involved in the procurement action.

If you are considering a sole source, you should weigh two risks. The first is conducting a sole source procurement when in fact a competitive situation exists. The second is conducting a competitive procurement when in fact a sole source situation exists. The first is the greater risk but both shall be addressed. You should perform and document the due diligence required to gain the knowledge that minimizes or eliminates either of these risks. You should exercise greater than normal care that all eligible bidders receive a fair and open chance to compete for the University's business. When that process is impaired or short-circuited, the University suffers the risk of not receiving the best value, of vendor protests, of unfavorable press and public opinion, and possibly of hostile litigation. The fair and open chance to compete is a preeminent consideration before all others. It can only be defeated when you can clearly and convincingly demonstrate that a true sole source situation exists.

If you insist that a procurement is sole source you should formally attest to it by completing a Sole Source Justification Form, which can be obtained through the link on this web page.

Where a sole source procurement falls into the dollar value that must be approved by or reported to the Board of Regents, you should be prepared to defend your justificaiton before the Board. For every sole source procurement with which you are involved, you should, if necessary, justify the action in cases of audit, protest, public inquiry, litigation, or similar circumstance.

Specific Procedures. When executing a sole source procurement you should comply with the following procedures.

1. For procurements that are $2,500 or less, no sole source justification is required. However, you should otherwise ensure that the source and price are fair and reasonable and represent best value to the University. Splitting of procurements to skirt the $2,500 dollar limitation is specifically prohibited.
2. For procurements exceeding $2,500 you should provide sufficient evidence that the acquisition qualifies as a sole source and that the indicated price is fair and reasonable. You should also complete and submit a sole source justification form. The order shall be placed only by a University buyer; you may not place it. The Purchasing Office, upon examining all documentation provided by the requestor, may take necessary actions and make prudent inquiries before placing the order.
3. The Purchasing Director will ensure that sole source procurements otherwise comply with all other policies and procedures governing the acquisition of goods and services at the University of Oklahoma. Further, the Purchasing Director will ensure that all reports otherwise required by separate policy and procedures do not inappropriately exclude sole source procurements just for the fact that they are sole source. Further, the Purchasing Director will ensure that all reports requiring the disclosure of sole source procurements appropriately reflect such procurements, and are timely filed.
4. Where a sole source procurement falls into the dollar value that must be approved by or reported to the Board of Regents, you should be prepared to defend the action, if necessary, before the board. For every sole source procurement with which you are involved, you should, if necessary, justify the action in cases of audit, protest, public inquiry, litigation, or similar circumstance.
5. If you knowingly execute a sole source procurement when in fact it is not, you may be subject to administrative action as otherwise provided for by Board of Regents policy.