Noncompetitive purchases valued at $10,000 or more are subject to the following procedures.
In some circumstances, Postal Service business and competitive objectives may be met most effectively through a noncompetitive purchase. The following four scenarios discuss the instances when it is appropriate to use the noncompetitive method:
- Sole Source — Only one supplier exists, capable of satisfying a requirement.
- Industry structure or practice — The industry producing or supplying the required goods or services is structured in a manner that renders competition ineffective (e.g., when purchasing goods or services that are regulated, such as utilities, or when purchasing from nonprofit or educational institutions that do not compete in the market place).
- Compelling business interests — There is a business interest that is so compelling that purchasing noncompetitively outweighs the benefits of competition. These situations can include, but are not limited to, the urgency of the requirement, a supplier innovation that furthers Postal Service business objectives, or undue cost or delay would result from a contract award to a new supplier.
- Superior Performance — A supplier’s superior performance and its contributions to the Postal Service’s business and competitive objectives merit award of a particular purchase. For example, extending the term or expanding the scope of a contract for substantially the same goods or services when a supplier has performed at such a high level that the extension or expansion is well deserved, or when a supplier’s superior performance has made such performance beneficial to Postal Service operations.
If it has been preliminarily recommended that the purchase should be made noncompetitively, then the requesting organization must submit a Noncompetitive Purchase Request (NPR) to the contracting officer. The NPR must include the business scenario and rationale for the noncompetitive purchase. While the extent and detail of the request will depend on the particular purchase, the purchase complexity, and the purchase’s potential dollar value, all elements of the NPR must be addressed fully and completely. If the requesting organization determines that an element is irrelevant or cannot be addressed fully and completely, a statement explaining the circumstances must be provided. In addition, the NPR must be signed and dated by the originator/preparer and his/her management chain. If the estimated cost of the request exceeds $250,000, then it must also be signed and dated by the responsible Vice President. The signers of the request must also certify to the conflicts of interest and nondisclosure statements which are included in the NPR. To view the NPR format, see MI SP-S2-2015-1, Noncompetitive Purchases.
The NPR is sent by the requesting organization to the contracting officer for evaluation and recommendation. If the purchase is valued at $1 million or more, the contracting officer must forward a copy to the Competition Advocate (CA) at competitionadvocate@usps.gov and provide the CA with a timeline for the contract as well as any other pertinent information if practical. See below sections for more information about the CA role.
2-10.3.4.1 General.
The CA is appointed by the VP, SM, and is generally responsible for promoting competition throughout the purchasing process, challenging barriers to the competition of Postal Service requirements, and assisting purchase/SCM teams in the development of effective supply chain management (SCM) solutions and obtaining best value. More specifically, the CA completes an independent review of all NPRs for purchases valued at $1 million or more, provides independent advice to contracting officers regarding proposed noncompetitive purchases, and produces an annual report on noncompetitive purchase activity; the report is submitted to the VP, SM, and posted on-line for both internal Postal Service and public audiences.
2-10.3.4.2 Review.
During the review, the CA should consider the following questions:
After the review of the NPR is complete, the CA must prepare his/her recommendations to the contracting officer. This recommendation should provide advice to the contracting officer during his/her evaluation and recommendation on the NPR.
The contracting officer reviews the NPR and performs a written evaluation of the proposed supplier’s past performance and supplier capability and any other matter he or she believes will lead to a more informed and effective purchase decision. The contracting officer must also address each of the CA’s recommendations in the written evaluation, and, if the CA had no recommendations, add a statement to that effect in the written evaluation. The contracting officer must document his or her approval or disapproval if within his or her delegated authority, or forward his or her evaluation with a recommendation through the management chain to the appropriate approval authority. The approval authority returns the evaluation and recommendation with his or her approval/nonapproval to the contracting officer, who forwards a copy to the CA. Approval of the NPR does not constitute approval of contract award, and, in all cases, the contracting officer is required to negotiate reasonable pricing and terms and conditions prior to contract award, including review of relevant market pricing, when applicable and a determination that the contract price is fair and reasonable.
If the parties should disagree as to purchase method, they should collaborate in order for the final purchase method determination or recommendation to be made. This collaboration will provide the requesting organization with the opportunity to bring forth any new or changed information which may affect the opinions of the contracting officer and approval authority. The CA may assist in these deliberations.
Subject and pursuant to VP SM delegation, portfolio managers (Facilities, Mail and Operational Equipment, Technology Infrastructure, Transportation, and Commercial Products and Services) within SM may approve purchase method recommendations for noncompetitive purchases valued up to $10 million, except for noncompetitive purchases of professional, technical, and consultant services valued at $1 million or more. Requests for noncompetitive professional, technical, and consultant services purchases valued at $1 million or more, and all other noncompetitive purchases valued at $10 million or more, must be reviewed and approved by the VP, SM. Portfolio managers may re-delegate up to $250,000 of this purchase method approval authority to Level IV and Level III contracting officers within their organization who have appropriate delegated contracting authority. The appropriate authority’s approval of the noncompetitive purchase method request does not constitute approval of contract award.
All noncompetitive contract awards valued at $1 million or more must be publicized in the Government-wide Point of Entry (GPE) and other media, as appropriate.
See Section 2-40.3.2, Contract Files for Noncompetitive Contracts, for information on required documentation.
