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Sole Source Procurement Agreement

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SOLE SOURCE PROCUREMENT AGREEMENT

This Sole Source Procurement Agreement ("Agreement") is entered into as of the day of , by and between Procuring Agency: , a Corporation Governmental Entity with principal address at ("Purchaser"), and Supplier: , a Corporation Individual with principal address at ("Supplier").

RECITALS

WHEREAS, Purchaser requires the procurement of certain goods and/or services described herein for its governmental operations and has determined, pursuant to applicable procurement rules, that the procurement qualifies as a sole source procurement because only Supplier is capable of providing the required goods and/or services on the terms specified; and

WHEREAS, Supplier represents that it is the exclusive provider, manufacturer, or authorized distributor of the Goods and/or Services described in this Agreement and that there are no reasonable alternatives available to meet Purchaser's technical, compatibility, or time requirements; and

WHEREAS, Purchaser has made a written sole source determination justifying procurement without competition and desires to procure the Goods and/or Services from Supplier on the terms set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

1.1 "Agreement" means this Sole Source Procurement Agreement and all exhibits and attachments incorporated herein. "Goods" means the tangible products identified in Section 2. "Services" means the services described in Section 2. "Deliverables" means all goods, services, documentation and materials to be delivered by Supplier under this Agreement.

2. SCOPE OF PROCUREMENT

2.1 Supplier shall provide the Goods and/or Services in accordance with the specifications, quantities, and schedule set forth in this Agreement. A concise description of the required Goods and Services is set forth below and further detailed in Exhibit A attached hereto.

3. SOLE SOURCE DETERMINATION

3.1 Purchaser represents that it has made and recorded a written sole source determination that sets forth the factual basis and statutory or regulatory authority for the sole source procurement. Supplier acknowledges receipt of a copy of the written determination, and Supplier agrees to comply with any conditions contained therein.

4. TERM

4.1 The initial term of this Agreement shall commence on and shall continue until unless earlier terminated in accordance with Section 13.

5. PRICE AND PAYMENT

5.1 The total contract price for performance of Supplier's obligations under this Agreement shall not exceed (the "Contract Price"), subject to adjustments as expressly provided herein.

5.2 Payment shall be made within days after receipt of an undisputed invoice and acceptance of the Deliverables. Invoices shall itemize all charges and be accompanied by such documentation as Purchaser may reasonably require.

6. DELIVERY, INSPECTION AND ACCEPTANCE

6.1 Delivery Location:

6.2 Delivery Schedule: Supplier shall deliver the Goods and perform the Services in accordance with the schedule set forth in Exhibit A. Time is of the essence with respect to any delivery dates expressly stated in this Agreement.

6.3 Inspection and Acceptance: Purchaser shall have a reasonable period to inspect and test the Deliverables after delivery. Deliverables that fail to conform to the Agreement may be rejected by Purchaser, and Supplier shall, at Purchaser's option, promptly correct or replace nonconforming Deliverables at Supplier's expense.

7. REPRESENTATIONS, WARRANTIES AND CERTIFICATIONS

7.1 Supplier represents and warrants that (a) it has full power and authority to enter into this Agreement; (b) the Goods and Services shall conform to the specifications and be free from defects in materials and workmanship; and (c) Supplier is not debarred, suspended, or otherwise ineligible to participate in procurements by any governmental entity.

7.2 Supplier further certifies that all information provided in connection with the sole source determination and procurement is true, complete and accurate, and Supplier shall promptly notify Purchaser in writing if any such information becomes inaccurate.

8. INDEMNIFICATION; INSURANCE

8.1 Supplier shall indemnify, defend and hold harmless Purchaser, its officers, employees and agents from and against any and all losses, liabilities, damages, claims and expenses (including reasonable attorneys' fees) arising out of or resulting from Supplier's performance under this Agreement, including claims of infringement, negligence, or breach of warranty, except to the extent caused by Purchaser's gross negligence or willful misconduct.

8.2 Supplier shall maintain, at its expense, insurance coverage appropriate to the risks of performance under this Agreement, including commercial general liability and, where applicable, workers' compensation and professional liability insurance. Upon request, Supplier shall provide certificates of insurance evidencing such coverage.

9. CONFIDENTIALITY

9.1 Each party will keep confidential any non-public information disclosed by the other party in connection with this Agreement and will not use such information except for performance under this Agreement. The obligations of confidentiality shall not apply to information that is or becomes public through no breach by the receiving party, is independently developed, or is required to be disclosed by law, provided the disclosing party is given prompt notice to seek protective relief.

10. RECORDS, AUDIT AND ACCESS

10.1 Supplier shall maintain complete, accurate and auditable records relating to the performance of this Agreement and the charges billed to Purchaser. Purchaser and its authorized representatives shall have the right to inspect and audit such records during normal business hours upon reasonable notice.

11. TERMINATION

11.1 Termination for Convenience: Purchaser may terminate this Agreement, in whole or in part, for its convenience upon written notice to Supplier. In the event of termination for convenience, Purchaser will pay Supplier for Deliverables accepted and for reasonable costs incurred by Supplier that are directly attributable to the terminated portion, less reasonable mitigation.

11.2 Termination for Cause: Either party may terminate this Agreement upon written notice if the other party materially breaches this Agreement and fails to cure such breach within thirty (30) days after receipt of written notice specifying the breach, or immediately in the event of insolvency or bankruptcy of the other party.

12. REMEDIES

12.1 The rights and remedies of the parties set forth in this Agreement are cumulative and in addition to any other rights provided by law or equity. Purchaser's exercise of any remedy shall not preclude the exercise of other remedies.

13. COMPLIANCE WITH LAWS

13.1 Supplier shall comply with all federal, state and local laws, regulations and ordinances applicable to its performance under this Agreement, including but not limited to procurement, labor, anti-corruption, and export control laws. Supplier shall procure and maintain all licenses and permits necessary for performance.

14. NOTICES

14.1 All notices, invoices and other communications required or permitted under this Agreement shall be in writing and shall be delivered to the addresses specified below or such other address as either party designates by written notice to the other.

15. AMENDMENT; WAIVER; COUNTERPARTS

15.1 This Agreement may be amended only by a written instrument executed by duly authorized representatives of both parties. No failure or delay by either party in exercising any right shall operate as a waiver of that right unless in writing and signed by the waiving party. This Agreement may be executed in counterparts and by electronic signature, each of which shall be deemed an original and all of which together shall constitute one instrument.

16. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

16.1 Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction in which Purchaser is established, without regard to principles of conflicts of law.

16.2 Entire Agreement: This Agreement, including all exhibits and attachments, constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior oral and written understandings and agreements.

16.3 Severability: If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect and the parties shall negotiate in good faith to replace any invalid provision with a valid provision that effectuates the original intent.

17. MISCELLANEOUS PROVISIONS

17.1 Assignment: Supplier shall not assign or subcontract its obligations under this Agreement without Purchaser's prior written consent, which shall not be unreasonably withheld. Any permitted assignment shall not relieve Supplier of its obligations hereunder.

17.2 Publicity: Supplier shall not use Purchaser's name, logo or any reference to Purchaser for advertising or promotional purposes without Purchaser's prior written consent.

Purchaser - Print Name:

By:

Date:

Supplier - Print Name:

By:

Date:

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What the Sole Source Procurement Agreement Is and when it applies

A Sole Source Procurement Agreement documents a noncompetitive purchase when only one supplier can provide the required goods or services. It explains why competition was impracticable, identifies the single source, and records approvals and pricing. Agencies and contracting organizations use it to satisfy procurement rules, create an auditable justification record, and enable lawful award without a competitive process. Properly prepared, it protects the buyer from protest risk and provides the factual basis auditors need to confirm compliance with procurement policies and applicable federal or state regulations.

Why a clear Sole Source Procurement Agreement matters

A well-documented sole source agreement preserves sound procurement governance by showing objective justification, internal approvals, and fair pricing. It reduces protest and audit exposure, supports transparency for stakeholders, and creates a defensible record for awarding without full competition.

Why a clear Sole Source Procurement Agreement matters

Who typically prepares and reviews a Sole Source Procurement Agreement

Several roles collaborate on a sole source agreement to ensure legal, financial, and operational acceptability.

  • Procurement officers and contract specialists who gather market research, draft the justification, and secure approvals.
  • Program or project managers who document technical need, source uniqueness, and schedule urgency.
  • Legal counsel and compliance reviewers who confirm regulatory fit and review risk language.

Final sign-off usually requires a combination of program, procurement, and legal approvals consistent with organizational delegation of authority.

Core elements to include in a professional Sole Source Procurement Agreement

A complete agreement contains factual justification, sourcing detail, approvals, and contract terms that support a noncompetitive award while preserving auditability and legal defensibility.

Justification

Clear factual statement explaining why only one supplier can meet the requirement and why competition would be impracticable.

Market Research

Summary of efforts to identify alternatives, including vendors contacted, search results, and reasons alternatives were rejected.

Scope of Work

Technical description of goods/services, deliverables, performance milestones, and acceptance criteria tied to the unique requirement.

Price Reasonableness

Documentation supporting price fairness: quotes, historical costs, benchmarking, or cost analysis.

Approvals

Signatures and dates for program manager, contracting officer, and any required executive or delegated authority signers.

Terms

Key contract terms (term, termination, payment, confidentiality, warranties, and dispute resolution) aligned with the award method.

Required data fields and essential facts to capture

Supplier Name: Full legal entity name
DUNS/Identifier: Tax or vendor ID
Justification Title: Short reason label
Effective Date: MM/DD/YYYY
Award Amount: Not-to-exceed amount
Approving Official: Name and title

Step-by-step: completing a Sole Source Procurement Agreement

Follow these steps in sequence to create a defensible and auditable sole source justification and agreement.

  • 01
    Define Need: Document the business and technical requirement first.
  • 02
    Perform Research: Search for alternatives and record findings.
  • 03
    Draft Justification: State why only one source qualifies, with supporting facts.
  • 04
    Obtain Approvals: Collect signatures from procurement, program, and legal as required.

How to set up a digital workflow for this agreement

Configure routing and fields to preserve evidence of intent, identity, and approval order in your e-submission workflow.

Field Configuration
Signature Block Signer name, title, date fields; required for each approver
Attachments Allow upload for quotes, market research, and cost analysis
Routing Order Set procurement → program → legal → executive approval
Audit Trail Capture timestamps, IP, and signer authentication method

Where to file, send, or submit the completed agreement

Submit the executed agreement to the official contract file and notify stakeholders through established channels.

  • Contract File: Store signed agreement in the official contract repository
  • Procurement Office: Send a certified copy to procurement records
  • Program Manager: Provide executed copy for project records
  • Finance: Forward invoice and signed agreement for payment setup

Digital signing and distribution: platform capabilities to check

Use an eSignature platform that supports authentication, audit trails, secure storage, and integration with your systems.

  • Authentication: Email, SMS, or advanced signer verification
  • Audit Trail: Timestamp, IP, and action history
  • Integrations: CRM, ERP, cloud storage connectors

Ensure the chosen platform supports your legal and records-retention needs and can export signed PDFs with tamper-evident audit reports.

Typical timelines and internal processing expectations

Processing times vary by organization, but build allowances for approvals, vendor validation, and any required public notice or protest periods.

Review Window:

Allow 5–15 business days for internal review

Public Notice:

If required, post notice for 7–14 days

Protest Period:

Expect 7–30 days depending on jurisdiction

Award Effective Date:

Set after approvals and any mandatory notice period

Record Retention:

Retain records per established retention schedule

Common mistakes to avoid when preparing a Sole Source Procurement Agreement

  • Using vague language that lacks factual detail and specific dates.
  • Failing to document market research or alternatives considered.
  • Skipping required approvals or signature order under delegation rules.
  • Neglecting to preserve supporting quotes and analysis with the file.

Penalties and risks from incorrect or incomplete sole source awards

Protest Risk: Bid protest or reversal
Audit Findings: Disallowances or remedial directives
Contract Termination: Potential termination or reprocurement costs
Debarment Risk: Supplier or official sanction
Financial Liability: Repayment or penalties
Reputational Harm: Public trust and stakeholder confidence loss

eSignature vendor pricing and feature overview for executing procurement agreements

Compare common vendor price points and feature presence when choosing an eSignature provider for procurement signing and recordkeeping.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by plan Varies by plan Varies by plan Varies by plan
Bulk Send Yes Yes Yes Yes Yes
Audit Trail Yes Yes Yes Yes Yes
Envelope Cap No cap 100 envelopes/user/year Varies Varies Varies

Illustrative use cases for sole source awards

These examples show common scenarios where sole source procurement is used. Each demonstrates documentation and approval needs.

Specialized Equipment Need

A public health lab required a proprietary analyzer only one vendor offered.

  • The lab documented certification and compatibility reasons.
  • The procurement file included vendor quotes, a technical letter from the lab, and legal approval before award to reduce protest risk and ensure auditability.

Continuity of Service

An agency needed immediate replacement parts tied to existing proprietary systems.

  • Urgent timeline prevented competitive sourcing.
  • The justification recorded technical dependency, a price reasonableness check, and expedited approvals so critical services remained uninterrupted while preserving a clear audit trail.

Practical tips for accurate and efficient completion

Adopt consistent templates, preserve supporting evidence, and follow approval delegations to limit rework and audit findings.

Use a standard template
A consistent template ensures you capture all required facts, enables reviewers to find key evidence quickly, and reduces omissions that lead to protest or audit.
Attach supporting documents
Include vendor quotes, market research screenshots, and technical memos. These attachments substantiate claims and reduce subjective interpretation during review.
Record decision dates
Log dates for research, approvals, and award. Accurate timestamps are essential for protest responses and for meeting retention triggers.
Choose reliable e-sign flows
Use eSignature workflows that capture signer identity, produce audit trails, and export tamper-evident PDFs to preserve legal admissibility.

Frequently asked questions about Sole Source Procurement Agreements

Answers to common questions about validity, documentation, e-signing, and risk mitigation for sole source awards.


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