Sole Source Justification Tutorial

By: 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 Notified of Video Surveillance Breaking News
Get Notified of Video Surveillance Breaking News

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

Camera Focusing Tutorial on Oct 14, 2019
Camera focus is fundamental to quality imaging. Mistakes can significantly reduce details, making cameras less effective. In this guide, we...
Lens Focal Length Tutorial on Jul 10, 2019
3mm, 6mm, 2.8 - 9mm, 5 - 50mm, etc. Camera specifications often list lens lengths but what do they mean? These metrics are important in...
Subnetting for Video Surveillance on Apr 30, 2019
This guide explains when subnetting is used on security networks, and how it works. We explain how to add or remove IP addresses to your range,...
Door Operators Access Control Tutorial on Apr 17, 2019
Doors equipped with door operators, specialty devices that automate opening and closing, tend to be quite complex. The mechanisms needed to...
Pole Mount Camera Installation Guide on Apr 11, 2019
Poles are a popular but challenging choice for deploying surveillance cameras outdoors. Poles are indispensable for putting cameras at the right...
ONVIF Video Surveillance Tutorial on Jan 29, 2019
ONVIF is well known within the surveillance industry as an interface to connect IP cameras and VMS systems. However, new users may find it...
Access Control Turnstiles Guide on Jan 28, 2019
Turnstiles control pedestrian access to secured areas, essentially becoming moving portions of fences, walls, or barricades for physically stop...
Cable Trenching for Surveillance on Jan 21, 2019
Trenching cable for surveillance is surprisingly complex. While using shovels, picks, and hoes is not advanced technology, the proper planning,...
H.265 / HEVC Codec Tutorial on Jan 08, 2019
H.265 support improved significantly in 2018, with H.265 camera/VMS compatibility increased compared to only a year ago, and most manufacturers...
Building Occupancy Codes and Access Control Tutorial on Nov 01, 2018
A building or room's classification can greatly impact which building codes must be followed. In terms of access control, these 'occupancy codes'...

Most Recent Industry Reports

Axis HD Analog Encoder Tested on Oct 11, 2019
Two years after declaring "Everything is IP", Axis has released their first HD analog encoder, the P7304, with support for AHD, CVI, TVI, and SD...
Dahua Celebrates PRC 70th Wearing Communist Party Hammer and Sickle on Oct 11, 2019
Dahua celebrated the PRC's 70th anniversary with a video of various Dahua employees wearing China Communist Party hammer and sickle pins as shown...
Last Chance - Register Now - October 2019 IP Networking Course on Oct 10, 2019
Last Chance - Register Now - Fall 2019 IP Networking Course. The course starts next week. This is the only networking course designed...
Network Optix NxWitness 4.0 Tested on Oct 10, 2019
Network Optix released Nx Witness 4.0, proclaiming new features like a deep learning analytics metadata SDK, increased H.265 support, and UX...
HID Fingerprint Reader Tested on Oct 09, 2019
HID has released their first access reader to use Lumidigm optical sensors, that touts it 'works with anyone, anytime, anywhere'. We bought and...
ONVIF Suspends Dahua and Hikvision on Oct 09, 2019
Dahua and Hikvision have been 'suspended', and effectively expelled, from ONVIF, immediately following US sanctions being placed on the 2 mega...
Hikvision And Dahua Sanctioned For Human Rights Abuses on Oct 07, 2019
In a groundbreaking move that will have drastic consequences across the video surveillance market, Dahua and Hikvision have been sanctioned by the...
Avigilon H5A Analytic Cameras Tested on Oct 07, 2019
Avigilon has released its H5A analytic cameras, claiming to "detect more objects with greater accuracy even in crowded scenes." We tested the...
Crisis At China's Largest VMS Provider, Netposa, Now State-Controlled on Oct 07, 2019
NetPosa, which bills itself as the PRC's largest VMS provider, is in a crisis. The firm is pursuing huge unpaid bills from clients, and its...
Knightscope Sells Just 1 Net New Robot In 6 Months on Oct 04, 2019
For the first half of 2019, US government records show that Knightscope has sold just 1 net new robots ('machines-in-network'), inching up from 52...