An interim FAR rule effective March 16, 2011, requires agencies to maximize competition by making certain that the proper Justification and Approval (J&A) is obtained prior to award of sole-source awards over $20 million to Alaskan Native (ANC) and tribally owned corporations. The written J&A must be approved by an appropriate official and, after award, made public.

Prior to this amendment to the FAR, there was no requirement for a J&A for a sole-source award to an ANC or tribally owned corporation, regardless of the dollar value. There continues to be no requirement for a J&A for sole-source contracts awarded to ANCs and tribally owned corporations below $20 million. The requirement for a J&A does not act as a ceiling or a cap on sole-source awards over $20 million to ANC and tribally owned corporations, but it does require an affirmative showing by the agency in the written J&A documenting the reasons for making the award on a sole-source basis rather than competing the opportunity.

The J&A is required to contain sufficient facts and rationale to justify the use of a sole-source award. As a minimum the J&A must include the following five elements:

1. A description of the needs of the agency concerned for the matters covered by the contract.
2. A specification of the statutory provision providing the exception from the requirement to use competitive procedures.
3. A determination that the use of a sole-source contract is in the best interest of the agency concerned.
4. A determination that the anticipated cost of the contract will be fair and reasonable.
5. Such other matters as the head of the agency specifies.

Should you have questions regarding the new FAR amendments or any other question concerning government contracts, please call the government contract attorneys at Williamson Law Group, or go to www.WilliamsonLawGroup.com for more information.