Overview
FAR Subpart 6.2 outlines the policies and procedures for limiting competition by excluding one or more specific sources while still maintaining "full and open competition" among the remaining eligible bidders. It serves as the regulatory bridge that allows agencies to bypass universal competition in favor of strategic objectives, such as industrial base mobilization, maintaining alternative suppliers, or fulfilling statutory socio-economic set-asides.
Key Rules
- Continued Competition: Even after excluding specific sources, acquisitions must still use competitive procedures (as prescribed in FAR 6.102).
- Alternative Source Justification (6.202): Agencies may exclude a source to maintain an alternative supplier if it reduces overall costs, supports national defense (industrial mobilization), ensures continuous availability of a reliable source, or satisfies critical medical/emergency needs.
- Documentation Requirements: Any exclusion for an alternative source must be supported by a Determination and Findings (D&F) signed by the agency head or their designee. These D&Fs cannot be made on a "class" basis; they must be specific to the contract action.
- Small Business Set-Asides: Contracting officers are authorized to exclude large businesses to fulfill statutory requirements for:
- Small Business Concerns
- 8(a) Participants
- HUBZone Small Business Concerns
- Service-Disabled Veteran-Owned Small Businesses (SDVOSB)
- Women-Owned Small Businesses (WOSB/EDWOSB)
- No Separate J&A Required for Set-Asides: Unlike other forms of restricted competition, no separate Justification and Approval (J&A) or D&F is required to perform a set-aside for the socio-economic programs listed above or for local firms during a major disaster.
Responsibilities
- Agency Head (or Designee): Responsible for signing the Determination and Findings (D&F) when excluding a source to maintain the industrial base or alternative sources.
- Contracting Officer (CO): Responsible for determining the appropriate set-aside category (e.g., HUBZone, SDVOSB) and ensuring the solicitation follows the specific policies of FAR Part 19. For disaster relief, the CO must specify the geographic area for the set-aside.
- Technical and Requirements Personnel: Responsible for providing the data and technical rationale to support a recommendation to exclude a particular source, including cost-benefit analyses and estimates of cost reductions.
- Department of Homeland Security (DHS): Identifies geographic areas for local firm set-asides in the event of a Presidential declaration of a major disaster.
Practical Implications
- Market Protection: This subpart allows the government to "subsidize" the existence of a second or third supplier. In the real world, if a dominant contractor is driving competitors out of business, the government can exclude that dominant firm from a specific contract to ensure a competitor stays viable, thereby preventing a future monopoly.
- Streamlined Socio-economic Awards: Because 6.203 through 6.207 waive the need for a D&F or J&A, it significantly reduces the administrative burden on Contracting Officers to "justify" why they are not allowing large businesses to bid, provided the "Rule of Two" or other Small Business Act requirements are met.
- Disaster Response: In the wake of an emergency (like a hurricane), the government can legally exclude national corporations in favor of local "mom-and-pop" shops within the disaster zone to stimulate the local economy, using the authority in 6.208 without lengthy legal justifications.
- Cost Realism: When citing cost reduction as a reason for excluding a source (6.202(a)(1)), the agency must be prepared to show detailed work on how those savings were calculated, making this a high-scrutiny area for potential protests.