A U.S. federal agency may award a contract without full and open competition only when a recognized legal authority and the facts support that approach. “No-bid contract” is common shorthand; the Federal Acquisition Regulation (FAR) calls the sourcing method a “sole-source acquisition.” That label alone does not show whether an award was proper.
This guide covers federal procurement governed by the FAR. State, local, foreign, grant-funded, and other non-FAR procurements may follow different rules, and agency supplements or acquisition-specific authorities can add requirements.
What does “sole-source acquisition” mean?
The FAR defines a sole-source acquisition as a contract for supplies or services entered into or proposed by an agency after soliciting and negotiating with only one source. It describes how the agency sought a contractor—not, by itself, whether the decision was lawful or well supported. FAR 2.101
“No-bid” can also mislead: an agency may solicit and negotiate with one source rather than issue no request at all. The relevant questions are what authority the agency relied on, what facts supported it, and whether it followed the applicable justification, approval, and notice rules.
When may a federal agency restrict competition?
FAR Part 6 identifies statutory authorities for using other than full and open competition. One permits an agency to proceed when only one responsible source can meet its requirements. Other authorities address circumstances including unusual and compelling urgency, industrial mobilization, international agreements, statutory authorization or requirement, national security, and the public interest. The agency must identify the authority that applies; “sole source” is not a catch-all exception. FAR Part 6
Even when competition is restricted, the contracting officer must solicit offers from as many potential sources as is practicable under the circumstances. Two common rationales are not sufficient on their own: lack of advance planning and concern that funds will expire. FAR Part 6
What justification and approval are required?
For actions where FAR 6.303 requires a justification, the contracting officer must document the rationale in writing, certify that the justification is accurate and complete, and obtain the approval required under FAR 6.304. FAR 6.303 also addresses justification content and public availability in applicable circumstances. Requirements depend on the authority and acquisition, so no single approval threshold or publication rule should be assumed to apply to every award. Check the current FAR provision and any relevant agency supplement.
“A contracting officer shall not commence negotiations for a sole source contract, commence negotiations for a contract resulting from an unsolicited proposal, or award any other contract without providing for full and open competition unless the contracting officer— (1) Justifies, if required in 6.302, the use of such actions in writing; (2) Certifies the accuracy and completeness of the justification; and (3) Obtains the approval required by 6.304.”
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How does a sole-source award differ from a contract that gets one offer?
They are distinct categories. A sole-source action is recorded as not competed; a competed procurement may still receive only one offer. That distinction matters when interpreting procurement statistics: a single offer does not necessarily mean the agency formally chose a sole-source path.
In a 2010 report comparing fiscal years 2005 through 2009, the U.S. Government Accountability Office (GAO) found that noncompetitive contract obligations fell from about 36% to about 31% of total reported obligations over that period. Contracts recorded as competed but receiving only one offer accounted for about 13% of total reported obligations in each of those years. These are historical figures, not current rates. GAO-10-833R
GAO also found that about 18% of the contracts in its sample were coded incorrectly in the federal procurement data system: some were marked not competed despite having been competed, while others were marked competed with one offer despite having been uncompetitive. That is a finding about the reviewed sample, not an estimate for all federal contracts; it is a reason to interpret recorded categories carefully. GAO-10-833R
Why are bridge contracts used, and what are the risks?
A bridge contract is a short-term action or extension intended to keep a service running while the follow-on award is not ready. In its 2015 review of 73 service contracts, with a subset of 29 selected for deeper review, GAO identified acquisition-planning delays, revisions to statements of work, source-selection delays, workforce capacity, protests, and budget uncertainties among the factors contributing to bridge-contract use. The sample was nongeneralizable, so it does not establish how common those causes are across federal contracting. GAO-15-503
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A bridge can preserve continuity, but an award made without competition may reduce price pressure and expose the government to paying too much. Recurring or prolonged bridges can also weaken competition. Those risks do not mean every bridge is unnecessary or that a particular award demonstrates favoritism. The acquisition record and circumstances matter. GAO-15-503
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Does a sole-source justification prove the price is fair?
No. A justification for limiting competition addresses the basis for that sourcing decision; it does not by itself establish that the negotiated price represents fair value. Price analysis depends on the acquisition record and applicable pricing rules, as well as factors such as market research, access to relevant data, and agency review.
GAO has discussed cost or pricing data as an oversight issue in a review of Department of Defense spare-parts contracting. That report concerns a particular defense context; it should not be treated as evidence that every sole-source award presents the same pricing problem. GAO-15-236
How should a proposed no-bid action be evaluated?
For a proposed federal action, these questions help organize a review. They are a practical framework, not a verbatim FAR checklist.
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- Available sources: Can another responsible source meet the agency’s minimum need? Has the agency sought as many offers as practicable?
- Urgency and delay: What would happen if the agency competed the requirement, and is the urgency grounded in circumstances other than poor planning or expiring funds alone?
- Duration and competition: If the action is a bridge, how long will it last, and what steps are being taken toward a competitive follow-on?
- Price and data: How will the agency assess price reasonableness, and what market or cost information is available under the applicable rules?
- Process and oversight: Does the action require a written justification, certification, approval, public notice, or other review under the current FAR and agency rules?
Where to check the rules
The current online FAR Part 6 is the starting point for federal competition requirements. Because amendments, acquisition circulars, class deviations, and agency supplements can affect the rules, confirm the version and requirements applicable to the specific acquisition—particularly for approval and public-notice details. The GAO reports cited above provide historical oversight findings, not a current measure of federal sole-source activity.
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