Sole-Source Contract (No-Bid Contract)
A contract awarded to a specific company without competitive bidding — used when only one vendor can meet the requirement or in urgent situations.
How It Works
Sole-source contracts bypass the normal competitive bidding process. They're permitted under specific circumstances defined in the Federal Acquisition Regulation: when only one source can provide the required product or service (e.g., a patented technology), in urgent national security situations, or when the award amount is below certain thresholds. While sometimes necessary, sole-source contracts attract scrutiny because they lack the price competition that drives down costs. The government is required to justify every sole-source award and, for large contracts, notify Congress.
Related Terms
- Competitive Bidding (Full and Open Competition) — The standard procurement process where the government publicly solicits proposals from multiple vendors and selects the best offer based on price, quality, and capability.
- Federal Contract — A legally binding agreement between the U.S. government and a private company to provide goods or services — from fighter jets to IT consulting.
- Contracting Officer (CO) — The government official with legal authority to enter into, administer, and terminate federal contracts — the only person who can obligate the government.
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About This Definition
This definition is part of the TaxDollarData Federal Spending Glossary — 31 terms explaining how the U.S. government spends taxpayer money. All definitions are written in plain language for taxpayers, journalists, contractors, and researchers.