Sole Source Justification Tutorial

Author: John Honovich, Published on Mar 02, 2012

The sole source justification is a very powerful yet controversial way of specifying products. Vendors love them because it eliminates competition and all but guarantees higher profits. Users often want them to simplify complex contracting procedures. However, often these justifications are abused and manipulated. In this note, we dig into sole source justifications sharing a recent practical example betwee BRS Labs and a US city.

What It Is

Typically, governments and large scale companies use competitive bidding processes to select vendors. This process is quite formalized and generally requires picking the best fit at the lowest cost, of any qualified respondent. This is done to ensure that contracts are not manipulate to benefit friends, families, bribers, etc.

Sole Source Justifications allow organizations to eliminate competitive bidding for approved products / projects. To do so, these organizations must justify why only a sole source, rather than a variety of sources, can meet the organization's needs. Sole source justification requirements are documented by many organizations globally.

Typically, 3 main rationales are used to justify a sole source:

  • Unique offering - a product or service that no other organization can possibly deliver (e.g., patented core features)
  • Backwards compatability - only one product can be used that works with what the organization already has (e.g., a VMS already installed)
  • Timing - the product or service is needed very quickly and cannot wait for normal contracting time frames (e.g., wartime, natural disasters, etc.)

The organization will submit the justification, typically with the help of the vendor being justified. As long as the buying organization is willing to support the justification, it generally is approved. Rarely are sole source justifications critically examined or rejected. Indeed, as we will explained later, doing so is difficult.

Why Vendors Love Them

A competitive contracting process is painful for vendors, even if they are preferred by buyers:

  • Timely: A formal bid process can take 3 - 6 months or longer, significantly lengthening the sales process and making it more expensive for the vendors.
  • Profit Pressure: With the threat of alternative suppliers, vendors have more pressure to reduce their pricing, and therefore their profits.
  • Loss of Business: An open process increases the risk that a rival vendor will sweep in and offer a less expensive or alternative offering.

By contrast, if a vendor can get the buyer to sole source their offering, the vendor is essentially guaranteed the business, can charge a higher price and get awarded the business faster.

Buyer Motivation

Get Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

While competitive bidding is designed to benefit buyers, weaknesses in the process make the sole source justification sometime attractive to buyers as well:

  • Get What They Want: Buyers might have a preferred vendor and fear that a competitive process may force them to go with an unknown quantity that might not do a satisfactory job (note: this is controversial and other ways exist to handle this).
  • Reduce Work: Running a competitive bid can be expensive and time consuming for the buyer. If the buyer 'knows' what they want, sole sourcing can eliminate this time and expense.

Practical Examples

Vendors typically seek to justify based on uniqueness or backwards compatitability:

  • Uniqueness: Frequently, vendors of emerging technologies will advocate buyers to sole source justify the specification of their products. Here's an example of BRS Labs being sole sourced for a $180,000 USD project. The buyer will typically cite a unique feature or patent of the product as the basis of the justification.
  • Backwards Compatibility: Vendors of VMS, access control software and PSIM will typcially fight hard to get specified in to new deployments, often by offering deep discounts or incentives. This is done because they know that expansions will almost certainly result in the sole source justification of their products in the future.

Misuse and Abuse?

The big risk is misusing sole source justifications, especially when it comes to 'unique' offerings. A good salesmen is well aware of the power of pitching their 'unique' offering. For technology sales, it is easy to find features that only one manufacturer has. Plus, with the patent system as porous as it is, anyone can get dozens of patents of questionable value. If a vendor can get an end user excited about their offerings big marketing claims, justifying most anything as 'unique' is not hard.

It is very difficult for contracting departments who oversee these justifications to truly determine if the offering is 'unique'. Typically, the offering needs to uniquely meet the needs of the buying organization. However, this is simultaneously subjective and demands deep technological expertise than contracting people would not have in various niche domains. For example, in the BRS Labs case, is BRS Labs truly the only solution that can meet the needs of the El Paso Water Utility? Would Ipsotek be close enough? Could VideoIQ or AgentVI though using different implementations meet the needs equally as well? Even for us as domain experts it is hard for us to conclusively determine.

Sole source justifications are powerful tools that need to be carefully understood and, when necessary, objected to when overused.

2 reports cite this report:

IP Camera Specification / RFP Guide 2017 on Aug 14, 2017
RFPs are hard. Do them 'right' and it takes a lot of knowledge and time. Do them 'wrong' and you can be (a) unwittingly locked into a specific...
US Embassy Requires Hikvision Cameras on Aug 29, 2016
The US Embassy in Kabul Afghanistan has required only Hikvision cameras in a new US federal government bid. However: Hikvision was founded...
Comments : PRO Members only. Login. or Join.

Related Reports on Tutorials

Installing Box Cameras Indoors Tutorial on May 22, 2018
This tutorial starts our physical installation for video surveillance series, starting with Box Cameras, one of the oldest and most basic types....
Installing Cameras in Plenums Tutorial on May 15, 2018
There is often confusion about plenum ceilings, with misinformation about what is required when running cables through them and mounting cameras...
Access Visitor Management Systems Guide on May 11, 2018
"Who are you, and why are you here?" Facilities that implement Visitor Management Systems hope they never need to ask that question to anyone,...
Access Control Card Printers Guide on May 03, 2018
Card printers are a core component of professional access control systems, often used as photos IDs and prominently displayed. Modern badges put...
Access Control Levels and Schedules Tutorial on May 01, 2018
Configuring access levels and setting up schedules is central to maintaining facility security. Many people may need to enter areas but most do not...
Forced Door Alarms For Access Control Tutorial on Apr 04, 2018
One of the most important access control alarms is also often ignored. "Forced Door" provides a vital and even critical notification against...
Understanding The 20+ Lock Functions on Mar 27, 2018
While locks can look the same, they may operate in significantly different ways. To make understanding them simpler, widely adopted industry...
'As-Built' Drawings Tutorial on Mar 20, 2018
Closeout documentation can be invaluable for future expansions or maintenance work, and 'as-built' drawings are a key aspect for finishing projects...
Access Control - Restricted Keys Guide on Mar 15, 2018
Not all doors, even in larger facilities, can justify using electronic access control. And even for doors that do have electronic access control,...
Rack Mounting NVRs Tutorial on Mar 14, 2018
Rack mounting recorders is common in professional systems, but manufacturers are making it difficult, with simple design failures causing multiple...

Most Recent Industry Reports

VMS Server Sizing on May 25, 2018
Specifying the right sized PC/server for VMS software is one of the most important yet difficult decisions in IP video surveillance. In the past...
China: Foreign Video Surveillance Is Security Risk on May 25, 2018
The Chinese government has long acknowledged that foreign video surveillance is a 'risk to national security' and has increasingly and almost...
US House Passes Bill Banning Gov Use of Dahua and Hikvision on May 24, 2018
Today, the US House of Representatives passed H.R. 5515, a bill that includes a ban on the US government's use of Dahua and Hikvision. This follows...
Hanwha Wisenet X Analytics and VMD Test on May 24, 2018
Continuing our updated testing of camera analytics, we tested Hanwha's Wisenet X analytics for over two weeks in multiple scenes, indoors and out,...
Ambitious Mobile Access Startup: Openpath on May 24, 2018
This team sold their last startup for hundreds of millions of dollars, now they have started Openpath to become a rare access control small...
Amazon's "Dangerous New Face Recognition Technology" Says ACLU on May 23, 2018
The ACLU has caused a stir, with a new report Amazon Teams Up With Law Enforcement to Deploy Dangerous New Face Recognition Technology,...
Software Only VMS vs NVR Appliances on May 23, 2018
Should you buy your own PC/server and load VMS software on it or get a turnkey appliance (both hardware and software, e.g., NVR, Hybrid DVR) from a...
Buy Arecont: Top Bid $10 Million Cash on May 22, 2018
Last year, Arecont had a deal for a purchase price of $170 million (see Failed Arecont China Acquisition). This year, Arecont has a deal for a...
Installing Box Cameras Indoors Tutorial on May 22, 2018
This tutorial starts our physical installation for video surveillance series, starting with Box Cameras, one of the oldest and most basic types....
The Hikvision Smart Classroom Behavior Management System on May 22, 2018
Hikvision's rapidly growing offering of analytics, which we most recently examined with Hikvision's ethnic minority analytics, is now going into...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact