What Is a Sole-Source Contract?
A sole-source contract is awarded to one company without competition, which is allowed only in specific cases.
Sole-source contract in plain English
Certified 8(a), HUBZone, WOSB and SDVOSB firms can receive sole-source awards up to set ceilings: $8.5 million for manufacturing and $5.5 million for other work ($5 million for SDVOSBs).
Outside those programs, an agency needs a specific justification to skip competition. SAM.gov has a Justification notice type where agencies post these.
Market research matters here too. When too few capable firms answer a sources sought notice, some agencies say they may award a sole-source contract instead of competing the work.
Related terms
- 8(a) program: The 8(a) program is SBA's nine-year business development program for small businesses owned by socially and economically disadvantaged U.S. citizens.
- HUBZone: A HUBZone is a Historically Underutilized Business Zone. SBA's HUBZone program helps small businesses based in these areas win federal contracts.
- SDVOSB (service-disabled veteran-owned small business): An SDVOSB (service-disabled veteran-owned small business) is a small business at least 51% owned and controlled by service-disabled veterans.
- WOSB (women-owned small business): A WOSB is a small business at least 51% owned and controlled by women who are U.S. citizens, with women managing daily operations.
- Sources sought notice: A sources sought notice is market research: an agency asks which businesses can do a job before it decides how to buy. Answering it isn't a bid.
Put it to work
Looking for another term? Browse the full glossary or the government contracting glossary guide.