10 U.S.C. § 3204: Use of procedures other than competitive procedures

the property or services needed by the agency are available from only one responsible source or only from a limited number of responsible sources and no other type of property or services will satisfy the needs of the agency; the agency’s need for the property or services is of such an unusual and compelling urgency that the United States would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals; to maintain a facility, producer, manufacturer, or other supplier available for furnishing property or services in case of a national emergency or to achieve industrial mobilization; to establish or maintain an essential engineering, research, or development capability to be provided by an educational or other nonprofit institution or a federally funded research and development center; or to procure the services of an expert for use, in any litigation or dispute (including any reasonably foreseeable litigation or dispute) involving the Federal Government, in any trial, hearing, or proceeding before any court, administrative tribunal, or agency, or to procure the services of an expert or neutral for use in any part of an alternative dispute resolution or negotiated rulemaking process, whether or not the expert is expected to testify; the terms of an international agreement or a treaty between the United States and a foreign government or international organization, or the written directions of a foreign government reimbursing the agency for the cost of the procurement of the property or services for such government, have the effect of requiring the use of procedures other than competitive procedures; subject to section 3201(e) of this title , a statute expressly authorizes or requires that the procurement be made through another agency or from a specified source, or the agency’s need is for a brand-name commercial product for authorized resale; the disclosure of the agency’s needs would compromise the national security unless the agency is permitted to limit the number of sources from which it solicits bids or proposals; or determines that it is necessary in the public interest to use procedures other than competitive procedures in the particular procurement concerned, and notifies the Congress in writing of such determination not less than 30 days before the award of the contract. that is unique and innovative or, in the case of a service, for which the source demonstrates a unique capability of the source to provide the service; and the substance of which is not otherwise available to the United States, and does not resemble the substance of a pending competitive procurement; and substantial duplication of cost to the United States which is not expected to be recovered through competition; or unacceptable delays in fulfilling the agency’s needs. to meet the unusual and compelling requirements of the work to be performed under the contract; and for the agency to enter into another contract for the required goods or services through the use of competitive procedures; and may not exceed one year unless the head of the agency entering into such contract determines that exceptional circumstances apply. This subsection applies to any contract in an amount greater than the simplified acquisition threshold. The head of an agency using procedures other than competitive procedures to procure property or services by reason of the application of paragraph (2) or (6) of subsection (a) shall request offers from as many potential sources as is practicable under the circumstances. the contracting officer for the contract justifies the use of such procedures in writing and certifies the accuracy and completeness of the justification; in the case of a contract for an amount exceeding $10,000,000 (but equal to or less than $100,000,000), by the competition advocate for the procuring activity (without further delegation) or by an official referred to in clause (ii) or (iii); in the case of a contract for an amount exceeding $100,000,000 (but equal to or less than $500,000,000), by the head of the procuring activity (or the head of the procuring activity’s delegate designated pursuant to paragraph (5)(A)); or in the case of a contract for an amount exceeding $500,000,000, by the senior procurement executive of the agency designated pursuant to section 1702(c) of title 41 (without further delegation) or in the case of the Under Secretary of Defense for Acquisition and Sustainment, acting in his capacity as the senior procurement executive for the Department of Defense, the Under Secretary’s delegate designated pursuant to paragraph (5)(B); and any required notice has been published with respect to such contract pursuant to section 1708 of title 41 and all bids or proposals received in response to that notice have been considered by the head of the agency. a description of the agency’s needs; an identification of the statutory exception from the requirement to use competitive procedures and a demonstration, based on the proposed contractor’s qualifications or the nature of the procurement, of the reasons for using that exception; a determination that the anticipated cost will be fair and reasonable; a description of the market survey conducted or a statement of the reasons a market survey was not conducted; a listing of the sources, if any, that expressed in writing an interest in the procurement; and a statement of the actions, if any, the agency may take to remove or overcome any barrier to competition before a subsequent procurement for such needs. In the case of a procurement permitted by subsection (a)(2), the justification and approval required by paragraph (1) may be made after the contract is awarded. when a statute expressly requires that the procurement be made from a specified source; when the agency’s need is for a brand-name commercial product for authorized resale; in the case of a procurement permitted by subsection (a)(7); in the case of a procurement conducted under (i) chapter 85 of title 41, or (ii) section 8(a) of the Small Business Act ( 15 U.S.C. 637(a) ); or in the case of a procurement permitted by subsection (a)(4), but only if the head of the contracting activity prepares a document in connection with such procurement that describes the terms of an agreement or treaty, or the written directions, referred to in that subsection that have the effect of requiring the use of procedures other than competitive procedures. enter into a contract for property or services using procedures other than competitive procedures on the basis of the lack of advance planning or concerns related to the amount of funds available to the agency for procurement functions; or procure property or services from another agency unless such other agency complies fully with the requirements of chapter 137 legacy provisions in its procurement of such property or services. The restriction contained in subparagraph (A)(ii) is in addition to, and not in lieu of, any other restriction provided by law. if a member of the armed forces, is a general or flag officer; or if a civilian, is serving in a position with a grade under the General Schedule (or any other schedule for civilian officers or employees) that is comparable to or higher than the grade of brigadier general or rear admiral (lower half). an Assistant Secretary of Defense; or if a member of the armed forces, is serving in a grade above brigadier general or rear admiral (lower half); or if a civilian, is serving in a position with a grade under the General Schedule (or any other schedule for civilian officers or employees) that is comparable to or higher than the grade of major general or rear admiral. The justification and approval required by paragraph (1) is not required in the case of a Phase III award made pursuant to section 9(r)(4) of the Small Business Act ( 15 U.S.C. 638(r)(4) ). Except as provided in subparagraph (B), in the case of a procurement permitted by subsection (a), the head of an agency shall make publicly available, within 14 days after the award of the contract, the documents containing the justification and approval required by subsection (e)(1) with respect to the procurement. In the case of a procurement permitted by subsection (a)(2), subparagraph (A) shall be applied by substituting “30 days” for “14 days”. The documents shall be made available on the website of the agency and through a government-wide website selected by the Administrator for Federal Procurement Policy. This subsection does not require the public availability of information that is exempt from public disclosure under section 552(b) of title 5 . The Secretary of Defense shall prescribe by regulation the manner in which the Department of Defense negotiates prices for supplies to be obtained through the use of procedures other than competitive procedures. specify the incurred overhead a contractor may appropriately allocate to supplies referred to in that paragraph; and require the contractor to identify those supplies which it did not manufacture or to which it did not contribute significant value. Such regulations shall not apply to an item of supply included in a contract or subcontract for which the price is based on established catalog or market prices of commercial products sold in substantial quantities to the general public. The term ‘qualified businesses wholly-owned through an Employee Stock Ownership Plan’ means an S corporation (as defined in section 1361(a)(1) of the Internal Revenue Code of 1986 [ 26 U.S.C. 1361(a)(1) ]) for which 100 percent of the outstanding stock is held through an employee stock ownership plan (as defined in section 4975(e)(7) of such Code [ 26 U.S.C. 4975(e)(7) ]). The Secretary of Defense may establish a pilot program and prescribe regulations to carry out the requirements of this section. Notwithstanding the requirements of section 2304 of title 10 , United States Code [see 10 U.S.C. 3201 et seq.], and with respect to a follow-on contract for the continued development, production, or provision of products or services that are the same as or substantially similar to the products or services procured by or for the Department of Defense under a prior contract held by a qualified business wholly-owned through an Employee Stock Ownership Plan, the products or services to be procured under the follow-on contract may be procured by or for the Department of Defense through procedures other than competitive procedures if the performance of the qualified business wholly-owned through an Employee Stock Ownership Plan on the prior contract was rated as satisfactory (or the equivalent) or better in the applicable past performance database. Each contract held by a qualified business wholly-owned through an Employee Stock Ownership Plan may have a single opportunity for award of a sole-source follow-on contract under this section, unless a senior contracting official (as defined in section 1737 of title 10 , United States Code) approves a waiver of the requirements of this section. for businesses to verify status as a qualified businesses wholly-owned through an Employee Stock Ownership Plan for the purposes of this section by using existing Federal reporting mechanisms; to the extent subcontracted amounts exceeding 50 percent are subcontracted to other qualified businesses wholly-owned through an Employee Stock Ownership Plan; in the case of contracts for products, to the extent subcontracted amounts exceeding 50 percent are for materials not available from another qualified business wholly-owned through an Employee Stock Ownership Plan; or pursuant to such necessary and reasonable waivers as the Secretary may prescribe; and to record information on each follow-on contract awarded under subsection (b), including details relevant to the nature of such contract and the qualified business wholly-owned through an Employee Stock Ownership Plan that received such contract, and to provide such information to the Comptroller General of the United States. developing and sharing best practices relating to the pilot program; the size of such business; performance of the follow-on contract; and other information as determined necessary; and providing information to leadership and the congressional defense committees on policy issues related to the pilot program. completing a data collection and reporting strategy and plan to meet the requirements of this subsection; and submitting the strategy and plan to the congressional defense committees. Any pilot program established under this section shall expire on the date that is eight years after the date of the enactment of this Act [ Dec. 27, 2021 ]. Not later than three years after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on any individual and aggregate uses of the authority under a pilot program established under this section. An assessment of the frequency and nature of the use of the authority under the pilot program. An assessment of the impact of the pilot program in supporting the national defense strategy required under section 113(g) of title 10 , United States Code. The number of businesses that became qualified businesses wholly-owned through an Employee Stock Ownership Plan in order to benefit from the pilot program and the factors that influenced that decision. Acquisition authorities that could incentivize businesses to become qualified businesses wholly-owned through an Employee Stock Ownership Plan, including an extension of the pilot program. Any related matters the Comptroller General considers appropriate.” no justification and approval is required under such section for a sole-source contract awarded by the Department of Defense in a covered procurement for an amount not exceeding $100,000,000; and for purposes of subsections (a)(2) and (c)(3)(A) of such section, the appropriate official designated to approve the justification for a sole-source contract awarded by the Department of Defense in a covered procurement exceeding $100,000,000 is the official designated in section 2304(f)(1)(B)(ii) of title 10 , United States Code [now 10 U.S.C. 3204(e)(1)(B)(ii) ]. Not later than 90 days after the date of the enactment of this Act [ Dec. 20, 2019 ], the Secretary of Defense shall issue guidance to implement the authority under subsection (a). The Department of Defense shall track the use of the authority as modified by subsection (a) and make the data available to the Comptroller General for purposes of the report required under paragraph (2). a review of the financial effect of the change to the justification and approval requirement in subsection (a) on the native corporations and businesses and associated native communities; a description of the nature and extent of contracts excluded from the justification and approval requirement by subsection (a); and other matters the Comptroller General deems appropriate.”