Federal contracting · competition
Sole-source contracts, explained
The default rule in federal contracting is full and open competition — set by the Competition in Contracting Act and implemented in FAR Part 6. A sole-source contract (a noncompetitive award) is the exception: the government contracts with one supplier without competing the requirement. Because skipping competition removes the market check on price, a sole-source award is allowed only on a recognized legal basis and must be justified in writing and approved at the level the dollar value requires.
The seven FAR 6.302 exceptions to full and open competition
| FAR cite | Exception |
|---|---|
| 6.302-1 | Only one responsible source (or only a limited number) will satisfy the requirement |
| 6.302-2 | Unusual and compelling urgency |
| 6.302-3 | Industrial mobilization; engineering, developmental, or research capability; or expert services |
| 6.302-4 | International agreement |
| 6.302-5 | Authorized or required by statute (includes 8(a), HUBZone, SDVOSB sole-source authorities) |
| 6.302-6 | National security |
| 6.302-7 | Public interest (determined by the agency head) |
Source: FAR Part 6 (acquisition.gov), retrieved 2026-06-20. Each exception requires a written justification and approval; confirm current rules at acquisition.gov.
Small-business sole-source authorities and ceilings
Several small-business programs carry their own sole-source authority (FAR 6.302-5 / FAR Part 19). Within the program ceiling, a qualifying requirement can be awarded to a single eligible firm without competition; above it, the requirement is competed among eligible firms.
| Program | Sole-source ceiling (FAR 19.805 / Part 19) |
|---|---|
| 8(a) Business Development | $7M (manufacturing) / $4.5M (all other) |
| HUBZone | $7M (manufacturing) / $4.5M (all other) |
| Service-Disabled Veteran-Owned Small Business (SDVOSB) | $7M (manufacturing) / $4.5M (all other) |
| Women-Owned Small Business (WOSB / EDWOSB) | $7M (manufacturing) / $4.5M (all other) |
Source: FAR Part 19 + 19.805 (acquisition.gov), retrieved 2026-06-20. Ceilings are set in regulation and change periodically; confirm the current figures at acquisition.gov.
Why sole-source awards draw oversight
Sole-source contracting is lawful and routine for legitimate needs — but because it removes the competitive check, it is where oversight concentrates. Watchdogs look at how much of an agency's spending is noncompetitive, whether the required justification exists, and whether one supplier holds a disproportionate share. Reading a sole-source award in context — alongside the recipient's award history and any exclusion record — is exactly what this silo's entity records support.
Statutory basis
Requires full and open competition for federal procurements, subject to the FAR Part 6 exceptions.
Implements the competition mandate and lists the circumstances permitting other than full and open competition.
The seven exceptions, each requiring a written justification and approval.
The 8(a), HUBZone, SDVOSB, and WOSB sole-source authorities and dollar ceilings.
Sole-source contracts — common questions
What is a sole-source contract?
A sole-source contract is a federal contract awarded to a single supplier without competing the requirement. It is an exception to the Competition in Contracting Act, which otherwise requires full and open competition. A sole-source award must rest on a recognized legal authority and be supported by a written justification.
When is a sole-source contract allowed?
FAR 6.302 lists seven exceptions to full and open competition — most commonly 'only one responsible source' (6.302-1) and 'unusual and compelling urgency' (6.302-2). Separately, small-business programs (8(a), HUBZone, SDVOSB, WOSB) allow sole-source awards up to set dollar ceilings. Each path requires a documented justification and the required approvals.
What is the dollar limit on an 8(a) sole-source contract?
Under FAR 19.805, an 8(a) requirement is generally awarded competitively above the sole-source ceiling and may be awarded sole-source below it. The ceilings are $7 million for manufacturing (NAICS in manufacturing) and $4.5 million for all other acquisitions. Above the ceiling, the requirement is competed among eligible 8(a) firms.
Are sole-source contracts legal?
Yes — when they fit a recognized authority and are properly justified. Sole-source contracting is lawful and routine for legitimate needs (one supplier, urgency, follow-on work, small-business set-asides). What draws scrutiny is concentration and missing justification, which is why agencies must document the basis and post the justification for many sole-source awards.
How can I see which contracts were awarded without competition?
Federal contract records report competition and set-aside details. USASpending.gov lets you filter prime awards by competition and set-aside type, and Fonteum keys each award to the recipient's entity record so an award can be read in context alongside that entity's exclusion history.
Go to the source
- FAR Part 6 — Competition Requirements (acquisition.gov) →official source
- FAR 6.302 — exceptions to full and open competition →official source
- USASpending.gov — filter awards by competition →official source
Reviewed by the Fonteum Government Contracts Desk
This guide reports the FAR rules on noncompetitive contracting as published at acquisition.gov (retrieved 2026-06-20). It names no entity and makes no determination about any award or party. Acquisition rules and ceilings change — confirm current requirements at acquisition.gov. Published 2026-06-20. Part of Fonteum (fonteum.com).