When a buyer names the supplier

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1. Competition first, with an exception

Competitive procurement is used as far as possible when buying for a Foreign Military Sales (FMS) case, under the Security Assistance Management Manual (SAMM) (SAMM C6.3.4). The Competition in Contracting Act, 10 U.S.C. 3204, allows a few limited circumstances in which a contracting activity can consider a purchaser’s request to use other than full and open competition, commonly called sole source. That framework applies to contracts expected to exceed the simplified acquisition threshold, under part 6 of the Federal Acquisition Regulation (FAR). Contracts below the threshold are handled under FAR part 13.

The exception that matters for sales is the international agreement exception in 10 U.S.C. 3204(a)(4), implemented in FAR 6.302-4 and the defense supplement (SAMM C6.3.4). It applies where a treaty or international agreement, or the written direction of a foreign government paying for the purchase, requires other than competitive procedures (SAMM C6.3.4.1). A signed Letter of Offer and Acceptance (LOA) is the manual’s example of such written direction. The decision must be documented under the statute and the defense supplement, in a form the regulations of the implementing agency (IA) may describe. What a buyer may say more broadly about the contract is covered in what a buyer may say about the contract.

2. Who asks, and how

An authorized official of the purchasing government may make the request in writing, usually through the Security Cooperation Organization (SCO). It may ask the IA to buy from a named source, or to limit competition to named sources (SAMM C6.3.4). The defense attaché or a comparable representative in the United States may also send the request to the IA. Purchasers do not have to explain why.

Timing matters (SAMM C6.3.4.2). The written direction should come in the Letter of Request, or separately with a reference to it. Designating a sole source on an offer already accepted and implemented is an exception to policy, which the IA may accept. If it does, the offer may be amended to add the designation. A modification may be used instead of an amendment when the request comes from the official who asked for the offer, a successor, or an official known to hold equal or greater authority than the signer.

3. Where it cannot be used

The exception can apply to offers funded with non-repayable Foreign Military Financing or Military Assistance Program funds, when the country asks in writing (SAMM C6.3.4.1.1). Requests for sole source buys from foreign suppliers need the concurrence of two offices of the Defense Security Cooperation Agency (DSCA): its strategy and policy office and its general counsel. An offshore procurement determination is needed for any foreign purchase funded with Foreign Military Financing.

Grant-funded capacity building is different (SAMM C6.3.4.1.2). The exception is not available for Building Partner Capacity programs, which are funded with American appropriations, except under 10 U.S.C. 333. Those programs follow their own sole source guidance, covered in from gap analysis to sole source on a capacity case.

4. How the government responds

Requests should serve the purchaser’s objective requirements, not improper or unethical considerations (SAMM C6.3.4.3). American representatives must stay objective when giving options or advice, and may not solicit sole source requests. As a rule, the government does not investigate why a purchaser asks. Contracting agencies are encouraged to defer to the request unless they know of signs that it breaks American law or ethical business practice.

Where facts suggest a request may break the law or ethical practice, the IA must consult its counsel (SAMM C6.3.4.3). If the IA decides not to approve a request, the memorandum telling the purchaser must be coordinated with DSCA’s international operations office and its strategy and policy office.

5. Naming a subcontractor

A purchaser may also ask for a subcontract to go to a particular firm (SAMM C6.3.4.4). The contracting officer should honor that only if the offer or other written direction meets the requirements of FAR subpart 6.3. The risks of naming a subcontractor should be explained to the purchaser. If the component causes problems in performance or integration, the purchaser bears the extra cost of putting it right, and should be told of that possible expense when it asks for the designation.

The defense supplement also sets limits once contracting starts. How far a purchaser takes part in contract negotiations is generally for the contracting officer to decide after consulting the contractor, and a purchaser whose participation is limited must be told why (DFARS 225.7304(d)). Negotiations involving certified cost or pricing data are the exception, because purchaser representatives may not observe or join them without a deviation (DFARS 225.7304(e)). The supplement tells contracting officers not to accept a purchaser’s directions on source selection decisions or contract terms, although they may try to obtain special provisions or warranties the purchaser asks for in good time (DFARS 225.7304(f)). They must not honor a purchaser’s request to reject any bid or proposal (DFARS 225.7304(g)).

6. The paper trail

The offer must name the designated source in a standard note (SAMM C6.3.4.5). The note records the date of the purchaser’s letter, the firm, whether it is to be the prime contractor or a subcontractor, and the lines concerned (SAMM Appendix 6 note on other than full and open competition). It confirms that the Defense Department accepted the request under the international agreement exception. The note is mandatory on offers with approved designations, and on amendments and modifications only when they add or change one. Where several primes and subcontractors work across lines, the information should be set out in two columns.

The IA sends the request to the contracting office for information and advice, and later sends it the implemented offer with the designation (SAMM C6.3.4.6). The manual says this matters most when the contracting activity is separate from the one that wrote the offer, as when a military department’s offer contains items bought by the Defense Logistics Agency.

Key terms

Sole source	The common name for procurement using other than full and open competition.
International agreement exception	The statutory exception that lets a purchaser’s written direction justify a named source.
Simplified acquisition threshold	The contract value above which FAR part 6 applies.
Offshore procurement determination	The approval needed for foreign purchases funded with Foreign Military Financing.
Designated subcontractor	A firm the purchaser names for a subcontract, whose performance or integration problems the purchaser pays to correct.

Every statement above links to the document behind it. The full source list for this piece is on the sources page.

This page describes public United States government programs for general information. It is not legal, regulatory or procurement advice, and it does not address the facts of any particular case.

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