2-20.4 Sole Sourcing

Sole sourcing describes the situation in which there is only one available supplier that can fulfill the requirement, given time and other constraints (e.g., joint R&D or an investment that effectively makes that supplier the only practicable source for the future).

Sole sourcing may be the result of a monopoly, where only one supplier exists capable of satisfying a requirement. Situations involving a monopoly must be fed back into the purchase planning process so that the Postal Service can take steps to either widen the requirement or stimulate competitive suppliers in the future. Sole sourcing may also be imposed by the client’s insistence on a specific source for a material or service or as a requirement of other stakeholders. In either case, the purchase/SCM team must ensure that those making the requirement are cognizant of the future risks of sole sourcing. Such risks may include greater vulnerability to rising prices and greater exposure to interrupted supply continuity.

Although sole sourcing implies an absence of competition, the procedures discussed in the Perform Solicitation-Related Activities and Evaluate Proposals tasks of USPS Supplying Practices Process Step 2: Evaluate Sources must be followed, because they form the basis both for negotiation and for the formal contract.

At this stage, the purchase/SCM team should check that all authorizations and approvals required to proceed to solicitation-related activities, especially financial, are in place.