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Sole-source procurement
A procurement method where a contract is awarded to a single supplier without a competitive bidding process. This typically occurs when there is only one supplier capable of meeting the requirements, or in situations of urgency. In government contracting, sole-source procurements above a certain value require additional scrutiny and approval.
When you're tracking federal contracts in Canada, you'll notice that not everything goes through a competitive bidding process. Sole-source procurement—awarding a contract directly to a single supplier—accounts for a significant portion of government spending, and understanding when and why it happens is essential for anyone analyzing procurement patterns.
How It Works
Under the Government Contracts Regulations (SOR/2018-67), contracting authorities can bypass competitive bidding in specific situations. The most straightforward case? Contracts at or below $25,000 for goods or services. Beyond that threshold, you need legitimate justification.
Here's the thing: the regulations recognize that sometimes competition just isn't feasible. Maybe there's genuinely only one supplier capable of delivering what's needed—think proprietary software maintenance or highly specialized scientific equipment. Or you're dealing with a pressing emergency where delay would cause serious harm. These situations appear in sections 6(1)(b) and 6(1)(c) of the regulations, and Treasury Board scrutinizes them carefully.
In practice, any department pursuing a non-competitive approach needs documented justification. The Supply Manual provides the framework that PSPC and other federal organizations follow, with Chapter 6 covering procurement strategy decisions. The requisition must explain why this particular supplier is the only acceptable choice. That documentation gets scrutinized more heavily as dollar values climb. Contracts above certain thresholds trigger additional approval requirements and potential review by the Office of the Procurement Ombud.
Key Considerations
Thresholds matter. That $25,000 limit applies per contract, and staying below it doesn't exempt you from acting in good faith. Contract splitting to avoid competitive requirements violates trade agreement obligations and Treasury Board policy.
Emergency isn't carte blanche. A "pressing emergency" under the regulations means situations requiring immediate action—not poor planning or missed deadlines. Procurement officers can tell the difference between genuine emergencies and manufactured urgency.
Supplier engagement gets tricky. According to the Office of the Procurement Ombud, you should only engage directly with a single supplier when you intend to pursue a legitimate sole-source contract at or below non-competitive thresholds. Otherwise, you risk creating bias or limiting competition unfairly.
Trade agreements impose limits. Even when domestic regulations might permit sole-sourcing, international agreements like CETA or CUSMA may require competition above specified monetary thresholds. DND and other major departments navigate these overlapping requirements constantly.
Related Terms
Competitive procurement, Advance Contract Award Notice (ACAN), Limited tendering
Sources
When you're analyzing procurement data, sole-source contracts tell you something about either the specialized nature of the requirement or the urgency of the need. Watch for patterns—they often reveal capability gaps or strategic supplier relationships within specific departments.
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