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Estimating & Bidding

Sole Source

In Plain English

Awarding a contract to one specific contractor without getting competing bids.

Definition

Sole source procurement is the practice of selecting a contractor or supplier without competitive bidding because only one source exists or is practical for the required product or service. Public agencies must formally justify sole source awards and are typically limited in when they can use this method. Sole source contracts are subject to scrutiny for fairness and cost reasonableness.

Why It Matters in Bidding

Sole source procurement changes the competitive dynamic of a bid, because the contractor or supplier is selected on justification rather than low price. On public work it requires formal documentation and is open to protest, so estimators and project teams must keep cost reasonableness backup and clearly identify any sole-source items in their proposals to avoid award delays or disputes.

Example

An owner standardizing on a single building automation system issues a sole-source justification so the GC must buy that manufacturer's controls, and the estimator carries the named vendor's quote rather than shopping competing brands.

Related Terms

Competitive BiddingNegotiated BidInvitation to BidResponsible Bidder

Frequently Asked Questions

Public agencies generally permit it only when one supplier can meet the requirement, such as proprietary equipment, compatibility with existing systems, or emergencies. The agency must document a written justification and demonstrate the price is fair and reasonable. Improper sole-source awards are a frequent target of bid protests and audits.
A sole-source or proprietary spec names a specific manufacturer with no substitution, so you must price that vendor's product and accept their lead time and pricing power. You lose the ability to shop competing brands, so confirm the quote is firm and account for any markup the named supplier commands on captive work.
Sole source means no substitution is permitted, while a basis-of-design or or-equal spec names a product but allows approved equivalents. With or-equal, an estimator can bid an alternative and submit it for approval to save cost. Reading the spec language carefully determines whether competitive sourcing is actually available.

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