Sole sourcing (or direct sourcing) is permitted in limited circumstances. Typically a legislative instrument will set out the circumstances where sole sourcing is permitted. Examples where sole sourcing might be permitted are:

• where, in response to an approach to the market, no suitable submissions were received;
• where, for reasons of extreme urgency brought about by events unforeseen by the agency, the property or services could not be obtained in time under open tendering procedures;
• for purchases made under exceptionally advantageous conditions that only arise in the very short term, such as from unusual disposals, unsolicited innovative proposals, liquidation, bankruptcy, or receivership and which are not routine purchases from regular suppliers; or
• where the property or services can only be supplied by a particular business and there is no reasonable alternative or substitute.In any sole or direct sourcing arrangement, the general procurement policy framework still applies, including the requirement to achieve value for money.

Sole sourcing cannot be used for the purposes of avoiding competition or to discriminate against any domestic or foreign supplier.

In any sole or direct sourcing arrangement, the general procurement policy framework still applies, including the requirement to achieve value for money.

If a public body entered a contract without conducting a competitive bid process when required, it is unlikely the contract would be undone unless the contractor awarded the contract was knowingly involved in the contravention. There may be disciplinary consequences for the public officials involved.

A potential bidder who missed the opportunity to bid may have a cause of action under administrative law such as for lack of procedural fairness (but this is unlikely absent serious wrongful conduct). Damages are not available as a remedy but if the administrative law action is successful the contract wrongly awarded could be undone.

However, currently there is no specific judicial body established in Australia to hear procurement disputes. This would change with Australia's accession to the WTO Agreement on Government Procurement (as having a specific judicial body to hear procurement disputes is a requirement under the agreement).