Sole-Sourcing versus Competitive Bidding: U.S. Government Agencies' Procedural Choices for Mainframe Computer Procurement

Why do government agencies sole-source sometimes and use competitive procedures for procurement other times? This paper develops a testable model of the economic determinants of agencies' procurement procedures and applies it to procurement of general purpose mainframe computer systems. Factors related to the extent of vendor competition or the value of a procurement importantly influences an agency's procedural choice. Extensive experience between an agency buyer and an incumbent vendor, or the buyer's experience with IBM, also helps predict the agency's procedural choice.