No-bid contract is a popular term for what is officially known as a "sole source contract."
A sole source contract implies that there is only one person or company that can provide the contractual services needed and that any attempt to obtain bids would only result in one person or company being available to meet the need. It is awarded usually, but not always, by a government after soliciting and negotiating with only one firm (see 48 Code of Federal Regulations § 2.101).
Urgency is often the rationale for sole source contracts, which permit the government to get contractors working as quickly as possible.
Legal reasons for sole source contracts include:
- Only one firm has a product that will meet the projects needs or only one firm can do the work
- The existence of an unusual and compelling urgency
- For purposes of industrial mobilization or expert services
- An international agreement
- Sole source is authorized or required by law, e.g., socio-economic programs
- National security
- The public interest
Use of such authorities requires written justification and approval at specified levels. See 48 CFR Ch. 1, Subpart 6.3.
- FedBizOpps.gov - The single government point-of-entry for U.S. federal government procurement opportunities over $25,000. Government buyers are able to publicize their business opportunities by posting information directly to FedBizOpps.