The art of the no-bid contract

Sole-sourcing is frowned on by some in the enterprise, but can be an effective strategy for getting projects done quickly

Use a third party to evaluate the deal

Of course, as Fersht points out, companies such as EquaTerra exist to ensure their clients get a good deal whether sole-sourcing or bidding out projects.

But that is not a bad thing. In a major deal, that evaluation can cost as much as six or seven figures.

"Bringing in a third-party adviser is highly advisable, especially if the client doesn't have the internal procurement skill sets," Fersht says.

Iannone goes one step further, recommending you use an outside law firm to evaluate the deal as well.

Laying out service levels for both parties in a sole-source deal is where it gets interesting, Fersht says. When signing up for a long-term relationship, you want your vendor to build a training ground for your IT employees by taking advantage of the vendor's talent. You also want to incent the vendor to deliver the latest upgrades, top consultants, and to ensure constant quality.

"If you are just doing a six-month gig, you are just getting pricing," Fersht says.

Although sole-sourcing can be advantageous for a large project, it does not preclude multi-sourcing with a number of vendors for different projects.

"Unilever, BP, Nike all use two to three vendors just for IT. While infrastructure is pretty much a commodity market, where multi-sourcing comes into play is in niche areas for your industry -- service providers who have real knowledge that they can bring to the table," Fersht says.

Sole-sourcing for a long-term deal, multi-sourcing to capture the expertise of industry experts, competitive bidding for short-term projects -- it sounds like a plan.

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