Sole-Source Contracting

Sole-source contracting is a procurement method in which a government agency or company awards a contract directly to one vendor without competitive bidding, usually because only that supplier is deemed able to meet the need or an emergency requires speed. In AI governance, it matters because AI purchases made this way can bypass the vendor evaluation, bias testing, and data-handling reviews that competitive processes often require. Compliance and risk teams should check whether a sole-source justification is documented and whether the vendor's AI systems still meet oversight obligations.

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Corporate PolicyUS2026-10-21

HHS Sole-Source Anthropic Award Puts AI Vendor Lock-In Under Federal Scrutiny

The U.S. Department of Health and Human Services disclosed its intent to award Anthropic a sole-source contract for Claude AI services, citing its existing enterprise deployment as justification. A government procurement law expert challenged the notice as an admission of vendor lock-in rather than a legitimate sole-source basis. The case is now a named federal example of the concentration and dependency risks that enterprise AI procurement programs must actively manage.

Anthropic Claude federal AI procurement vendor lock-in vendor concentration risk HHS sole-source contracting AI procurement