If you have ever sat in a Clearance session for a major sole-source acquisition, you know the feeling. You walk into a conference room (or log into a Teams meeting) with your binder or laptop, and facing you is a panel: the Clearance Approval Authority (CAA), Legal, the Policy Chief, and a Pricing Analyst who has been looking at your spreadsheets for three days.
It is not a formality. It is a defense of your strategy.
In a Non-Competitive (Sole Source) environment, the market isn’t setting the price—you are. That means the scrutiny on your logic is exponentially higher than in a competitive buy. Here is what you can expect during the two phases of Non-Competitive Clearance under DAFFARS 5301.90.
Phase 1: Business Clearance (The Strategy Session)
When you present for Business Clearance, you are asking for permission to open negotiations. The CAA doesn’t care about the contractor’s proposal yet; they care about your position.
Expect to answer these questions:
- “Is the data actually sufficient?” If you are relying on “Data Other Than Certified Cost or Pricing Data,” be ready to fight. If you don’t have good historicals or a similar commercial item to compare it to, the CAA will hesitate to let you negotiate.
- “What is your weighted guideline?” If you are doing a Cost-Plus fix, how did you calculate the profit/fee objective? Did you give them too much credit for risk they aren’t actually taking?
- “Where is your bottom line?” The CAA wants to know your absolute walk-away point. If you can’t articulate where the deal becomes “unfair and unreasonable,” you aren’t ready to negotiate.
- “What are you giving away?” If there are tricky Terms and Conditions (T&Cs) or data rights clauses, Legal will want to know your negotiation room before you get in the room with the vendor.
The Deliverable: A signed Pre-Negotiation Objective Memorandum (PNM) that establishes your minimum, objective, and maximum positions.
Phase 2: Contract Clearance (The Results)
You have finished negotiations. You shook hands (metaphorically). Now you have to go back to the CAA and explain what happened. This session is usually shorter, but it can be more intense if you didn’t get a good deal.
Expect to answer these questions:
- “Why did the price go up?” If your final settlement is higher than the Objective you established in Phase 1, you must explain exactly why. Did you miss a cost element? Did the contractor prove their material costs increased? “They wouldn’t budge” is not a valid justification.
- “Did you get the Certificate?” For acquisitions over the TINA threshold ($2M), you must have the Certificate of Current Cost or Pricing Data in hand.
- “Did we cave on Terms?” If you traded Data Rights for a lower price, you better have a very strong business case for why the Air Force doesn’t need that technical data.
The Deliverable: A signed Final Price Negotiation Memorandum (FPNM) and the clearance to award.
The “Delta” Explanation
The most important part of Non-Competitive Clearance is explaining the Delta (the difference between the proposed price and the negotiated price).
If a contractor proposed $10M and you settled at $9.8M, the CAA will ask why you barely moved the needle. If they proposed $10M and you settled at $6M, the CAA will ask if you fundamentally misunderstood the requirement or if the contractor was price-gouging. You need to tell the story of the negotiation.
Regulatory References
- DAFFARS 5301.9000(b): Specifically outlines that for non-competitive acquisitions, the clearance authority is approving the negotiating objectives (Business) and the negotiated agreement (Contract).
- FAR 15.404-1: The basis for all your arguments. This defines the Proposal Analysis Techniques (Price Analysis, Cost Analysis) you must defend in the meeting.
Veteran Advice: Never go into a clearance session hoping the CAA won’t notice a weak spot in your file. They will. It is their job. Identify your weak spots upfront (e.g., “Our material escalation data is weak, so we relied on BLS indices”), and you will gain their trust.