Sole Source: A Comprehensive Guide

I. Introduction

What Is Sole Source, and Why Does It Matter?

Purpose: Sole Source refers to a procurement method where a contract is awarded to a single supplier without a competitive bidding process, typically justified under specific circumstances to ensure compliance with government regulations.

Context: In Canadian government contracting, departments such as Public Services and Procurement Canada (PSPC) and agencies managing projects benefit from understanding Sole Source to expedite procurement when time, specialty expertise or proprietary rights limit competition.

Overview: This guide breaks down the core elements of Sole Source, explains its role in achieving compliance under the Treasury Board Contracting Policy, and highlights how modern analytics tools and digital platforms like CanadaBuys support streamlined decision-making.

II. Definition

A. Clear and Concise Definition

• What it is: A procurement approach where only one supplier is invited to negotiate a contract without a public competition.

• Key Terms: Limited tendering, limited tendering reason, sole-source justification and award authority under the Treasury Board of Canada Secretariat.

B. Breakdown of Key Components

1. Justification Criteria: Defined circumstances such as exclusive rights, urgent timelines or proprietary technology that meet exceptions under the Trade Agreement Exceptions and Exclusions.

2. Approval Process: Documentation requirements and sign-off levels in the contracting chain, often captured in a Contract Workspace tool to ensure auditability.

3. Regulatory Compliance: Alignment with the Financial Administration Act, government contracting regulations and departmental policies.

C. Illustrative Examples

Example 1: Health Canada engages a specialized laboratory through Sole Source to validate new testing equipment when only one vendor holds the necessary accreditation.

Example 2: Transport Canada issues a Sole Source contract to a bridge maintenance firm following an urgent structural repair, leveraging Supply Arrangement terms to expedite award.

III. Importance

A. Practical Applications

Sole Source contracts enable agencies to meet critical deadlines, for instance when Public Services and Procurement Canada uses this method to secure unique IT services during system migrations in CanadaBuys, balancing speed with due diligence.

B. Relevant Laws, Regulations, or Policies

Key references include the Treasury Board Contracting Policy, the Financial Administration Act and clauses within the Clause Library that govern justifications and approvals.

C. Implications

When applied correctly, Sole Source reduces procurement cycle times, mitigates market risk where competition is not viable, and supports strategic sourcing goals by preserving transparency through documented exceptions.

IV. Frequently Asked Questions (FAQs)

A. Common Questions

• Q: What does Sole Source mean? A: It is a procurement method awarding a contract to a single vendor without a full competition.

• Q: Why is Sole Source important? A: It allows federal departments to respond rapidly to urgent needs while maintaining compliance with trade obligations.

• Q: How is Sole Source used in practice? A: Departments document rationale in their sourcing records and secure departmental approval before award.

• Q: When can a supplier request a Sole Source award? A: Only when clear criteria under government regulations are met and documented by the contracting authority.

B. Clarifications of Misconceptions

• Misconception: "Sole Source is overly complex."
  Truth: With clear templates in Contract Workspace and step-by-step guidelines, the process is straightforward.

• Misconception: "Only large organizations can use Sole Source."
  Truth: Small and medium enterprises can benefit, especially when they hold unique expertise or patents.

V. Conclusion

A. Recap

This guide outlined how Sole Source procurement supports Canadian government goals by enabling timely access to specialized suppliers while ensuring regulatory oversight.

B. Encouragement

Procurement professionals should evaluate whether Sole Source aligns with project needs and engage early with legal and financial advisors to streamline approvals.

C. Suggested Next Steps

• Explore the Sole Source Contract process for detailed award guidelines.

• Consult CanadaBuys training resources to optimize digital workflows.

• Review related terms in the Contract and Requisition glossary entries to build comprehensive procurement knowledge.