The University of Memphis

Sole Source or Proprietary Purchases

BFGuide

• Sole Source Purchases
• Proprietary Purchases
• Non-Competitive Negotiation

• Using Non-Competitive Negotiation for Sole Source Procurement
• Factors to be Considered for Sole Source or Proprietary Purchases
• Documentation and Approvals

• Justification for Sole Source
• Agreement for Personal, Professional, and Consultant Services
• Minority/Ethnicity
• Contract/Agreement Routing

• University's Purchasing Policy
• TBR Policy 4:02:10:00 Purchasing Policy and Procedures

• Procurement Services Staff

Purchases are made only when items are unique and possess specific characteristics that can be filled by only one source. The vendor must furnish a letter indicating that it is the sole source and the letter must be signed by an authorized company representative.

Personal, professional and consultant service contracts may be obtained by non-competitive negotiation when the contractor is a state agency, a political subdivision of the State, and any other public entity in Tennessee, or an entity of the federal government. Reference F&A Rule 0620-3-3-03.

Factors to be considered in sole source and proprietary purchases include the following:

1. Whether the vendor possesses exclusive and/or predominant capabilities or the items contain a patented feature providing superior utility not obtainable from similar products
2. Whether the product or service is unique and easily established as one of a kind
3. Whether the program requirements can be modified so that competitive products or services may be used
4. Whether the product is available from only one source and not merchandised through wholesalers, jobbers, and retailers
5. Whether items must be interchangeable or compatible with in-place items
6. Whether the cost of conversion, including but not limited to disruption, re-training, and replacement precludes bidding competitively
7. Whether the product is to be used in an instructional setting and the intent is to provide instruction on the specific product or diversity of products
8. For personal, professional and consultant services, whether the use of non-competitive negotiation is in the best interest of the University (F&A Rule 0620-3-3-03)
9. Other justifications as approved by the Director of Procurement Services, President or Chancellor, as appropriate

Only authorized sole source may be procured utilizing non‑competitive negotiation and a completed Justification for Sole Source form. The vendor must furnish a letter indicating that it is the sole source and the letter must be signed by an authorized company representative.

Whenever specifications are not so worded or designed to provide competitive bidding, or specify a single brand, the person responsible for the recommendation shall be required to justify the necessity for the specification in writing, and the request shall be approved by the Director of Procurement Services, President, or Chancellor, as appropriate. The University's Justification for Sole Source form must be completed by the ordering department and submitted to the Director of Procurement Services for approval.

When sole source or proprietary purchases are to be made, the person responsible for the recommendation shall be required to provide written justification to the Director of Procurement Services for approval prior to goods or services being acquired. The justification for sole source or proprietary purchases shall detail sound, business reasoning why a competitive procurement is not appropriate and why non-competitive negotiation is in the best interests of the University.

1. For goods and certain services where a purchase order is required, the Justification for Sole Source form must be completed and approved by department's next level of authority if the amount is less than $50,000. The VP/Provost level of authority is required if the amount is $50,000 or more. This form, along with an approved on-line purchase requisition and a signed letter from the vendor indicating that it is sole source provider shall be submitted to Procurement Services for approval prior to goods or services being acquired. For purchase orders and contracts of $250,000 or more, the additional approvals of the President and Chancellor are required.
2. For personal, professional, and consultant services contracts, the Justification for Sole Source form must be completed and approved. This form, along with the Contract/Agreement Routing form; Agreement for Personal, Professional, and Consultant Services form; and Minority/Ethnicity form shall be submitted to the Procurement Services for approval prior to services being acquired. Procurement Services shall forward contracts in the amount of $100,000 to Legal Counsel to obtain the approval of the President. The additional approval of the Chancellor is required if the dollar amount is $250,000 or more. Prior approval of the Fiscal Review Committee is required on all non-competitive (sole source) contracts of $250,000 or more and for a term greater than one (1) year. (Allow a minimum of 75 days prior to the effective date of the agreement).

http://bf.memphis.edu/forms/procurement/routing.html