Sole Source Procurements – Are You Updating Your Documents?
by Lexi Diaz, Senior Associate
Posted on November 17, 2025
Sole source procurements can be legitimate and necessary when it is determined that there is only one vendor capable of providing an item or service. The release of the USFR Compliance Questionnaire last year introduced an enhancement related to sole-source procurements, placing an even greater emphasis on documentation. Unfortunately, many districts still rely on outdated templates, vague justification, or incomplete board documentation that does not meet the information required by R7-2-1053 of the Arizona Procurement Code. If your district hasn’t revisited its sole source procurement procedures in the past year, now is the time.
What R7-2-1053 of the Arizona procurement Code requires and what many Districts are missing
To fully comply with the USFR Compliance Questionnaire and state law, the governing board’s approval for all sole-source procurements must be obtained before making a purchase or entering into a contract. If the governing board determines that there is only one source for the required material, service, or item, the written determination is to include the following required information:
- A description of the procurement needed and the reason only a single source was available, or why no reasonable alternative exists.
- The name of the proposed supplier.
- The duration and estimated total dollar values of the proposed procurement.
- Documentation that the price was fair and reasonable.
- A description of the efforts made to seek other sources.
Through recent audits, it has been common to find that districts are not fully meeting the requirements. Specifically, districts are failing to include a board determination that explains why no reasonable alternative exists or documentation of the efforts made to seek other sources before concluding the vendor was the only source. In addition, district documentation does not always include the estimated dollar value and duration of the sole-source procurement for the proposed fiscal year.
To ensure compliance with the USFR Compliance Questionnaire and state law, districts should:
- Develop or update sole source templates on an annual basis to include all required elements.
- While updating documents, keep in mind that sole source procurement should be avoided, except when no reasonable alternative source exists.
- Implement training for individuals on all pertinent information.
- Retain written board determination and any cost or pricing data in the procurement file for easy record retention and to assist in providing documentation to external auditors.
As a new fiscal year approaches, it’s a great time to update templates and get governing board approval for all sole-source procurements.
