Competition versus Sole Sourcing in Defence Procurement

Abstract

Competitive tendering has been the gold standard for government procurement contracts. Nevertheless, this is not the case for the defence sector. Globally, the number of sole source contracts has been exponential. Some argue that sole source procurement is much more effective for the defence sector compared to competitive tender. Yet, there is a lack of publicly available data to prove this claim. Further, there is minimal empirical evidence to substantiate this argument on whether sole source is a better method for procurement in defence compared to competitive tendering. This paper defines public procurement and critically evaluates government contracting methods in defence. The paper discusses the key features of defence contracts and compares the costs and benefits of competitive tendering versus sole sourcing for delivering ‘value for money in defence procurement. The paper offers a framework that highlights the factors that could be used to determine the choice of tendering in defence procurement. This is exploratory research and uses the pragmatist philosophical approach.