SpendLogic works with government primes and subs to unlock organizational savings and fix procurement compliance issues. Our software solves the top three CPSR findings: Price Analysis, Commercial Item Determinations, and Source Justifications. This training session will teach you how to write a non-competitive source justification in SpendLogic.
Hi, I’m Patrick Mathern, the founder of SpendLogic. This short tutorial will show you the basic steps you need to know to complete a non-competitive source justification. You can find this and other tutorials on our website at spendlogic.com/help. Let’s get started. Source justifications are attached to price analysis reports. So, in order to write a non-competitive source justification, go to new report at the top of the screen and click price analysis.
In order to make the source justification tab appear, you’ll need to do two things. First, toward the bottom of the page, indicate that you wish to write a non-competitive price analysis. Source justifications don’t apply to other report types. Second, you’ll need to indicate that yes, a source justification report is required. Once you do this, you’ll notice that you now have a source justification tab available at the top of your screen.
You can either complete the parts analysis reports or click the source justification tab now. I’ll go ahead and start a source justification report now. Now that we’re on the source justification tab, we can see that, for the most part, the screen looks very similar to the other screens in SpendLogic. You’ll first be led through a series of questions to determine which method you should use. Once a method is chosen, you’ll be asked for rationale that helps support that method.
Let’s take a minute to review the source justification methods that are supported by SpendLogic. In general, they fall into one of four categories available on multiple commercial websites, follow-on procurements, government-directed, or management directed. I’ll walk through each of these in a little bit more detail. The first method is available on commercial websites. This is the amazon.com source justification.
This isn’t specifically cited in the FAR, but the idea is that the item qualifies as a COTS or commercial off-the-shelf item. COTS items are priced based on market factors, which are effectively competitions conducted on a very large scale. The second method is actually a collection of four different methods all applying to follow-on procurements.
The first applies to proprietary information, both designs and IP. This is the equivalent to stating that there is no other known source for this item or service in the known universe. You’ll need to provide market research that makes a very solid case for there not being any other suppliers capable of completing the required effort. Duplication of cost helps you make the case that conducting a competition will cost the government more than it will save in the long run, so sticking with the incumbent is in the government’s best interest.
SpendLogic helps you support your case by calculating the savings that would be required over the next 12 months in order to make up the increasing cost. Note that if SpendLogic calculates that a 5% savings would cover your cost increase, you’ll get an error and will not be able to use this method. Unacceptable delays refers to cases where delivery dates do not support the timeline that would be required to conduct competition.
SpendLogic calculates when a competition must be started based on lead times and requisition dates, and then determines whether this argument holds water. If SpendLogic determines that you have or had the opportunity to compete but just release the RFQ too late, you’ll get an error and will not be able to use this method. Engineering drawings is to be used when you’re required to buy a certain part due to internal source requirements.
This method should be used sparingly. If other methods apply, it’s recommended they are used. CPSR teams will be required to investigate these POs further, so make sure that you have your documentation organized. The third category is government directed. This method is used when you’ve received written direction to use a specific supplier or a specific part that only one supplier provides.
Verbal direction doesn’t hold water here. You’re required to upload documentation of the direction you’ve received. So make sure it’s valid before you go down this path. Management directed is not found in the FAR but it’s a situation we all face from time to time. While it requires further explanation, it’s not always a bad thing. If a business decision was made above your level in an organization, then just make sure you have written direction and upload it here.
Note, however, if an audit team sees a lot of packages with this rationale, they’ll likely issue a finding. Getting back to our example, choose the method that applies to your situation. When you’re able to click Yes in the method section, you’ll be provided with method-specific questions below in the rationale area. Answer all of the questions as completely as possible.
When you’re done with this screen, click Next. You’ve now arrived on the Reports tab. If I try to click download, I’ll be met with an error. This is because I haven’t yet completed my parts reports. In order to download any report, you first have to complete parts reports. I’m quickly doing this in the background so I can show you what a final report looks like.
Now that my parts tab shows one-of-one completed, I can download the report. In the downloaded zip file, I have two Word documents. The first is the price analysis I completed, the second is the source justification. This will be clear to you due to the fact that source justification is in the file name. Click this report to open it and view the source justification report.
You’ll see that SpendLogic has carried forward all of the choices you made, as well as any calculations and rationale. SpendLogic fully explains any calculations so the reviewer can replicate the process if needed. This concludes our video. Thanks for watching. If you have any questions on this or any other feature in SpendLogic, you can visit spendlogic.com/help or email us at [email protected]
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