Finding Text
Finding 2024-001: Incorrect Use of Sole Source Justification
Information on the Federal Program: 59.059
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Title 2 U.S. Code of Federal Regulations (CFR) Part 200.320, paragraph 318 “General procurement standards” states noncompetitive (sole source) procurement is allowed only under the following circumstances:
- The item is available only from a single source.
- There is an exigent or emergency situation that will not permit delay.
- The Federal awarding agency or pass-through entity expressly authorizes noncompetitive procurement in writing.
- After soliciting multiple sources, competition is deemed inadequate.
These rules are designed to ensure open and fair competition in Federal procurement.
Condition: MCCC and Affiliate procured goods/services using sole source justification without meeting the required criteria. Specifically, the procurement records did not document why the procurement met one of the allowed exceptions under Uniform Guidance, and competitive procurement methods were not utilized when they should have been.
Cause: The Organization did not adhere to its procurement policy in that it failed to perform the prescribed procurement procedures throughout the fiscal year.
Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that MCCC and Affiliate will not receive the best value for its purchases. The procurement process should also allow for an evaluation of potential conflicts of interest with prospective vendors and contractors. Failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition.
Questioned Costs: None noted.
Context: 1 out of 1 samples tested did not follow the specific criteria for noncompetitive procurement.
Identification as a Repeat Finding, if Applicable: Not applicable.
Recommendation: We recommend MCCC and Affiliate provide training to staff on the specific requirements of 2 CFR 200.320 to ensure that they are aware of the conditions under which sole source procurement is allowable.