Available Fixed Sellers: Procurement Source Selection Methods
PMBOK v8 Definition
The Available Fixed Sellers concept encompasses two distinct procurement methods: Single source and Fixed budget. Single-source procurement is a formal process where only one supplier can satisfy the technical requirements due to unique technical competence, patents, or exclusive rights—this is not an attempt to favor a provider but is employed when no other options are available. The fixed-budget method requires disclosing the available budget to invited sellers in the request and selecting the highest ranking technical proposal within that budget, with sellers adapting scope and quality to the cost constraint.
Why It Matters for the Exam
This concept appears frequently in PMI exam questions on Procurement Management and Source Selection, typically in situational questions asking you to identify the correct procurement method when a buyer has no alternative suppliers or when budget is the primary constraint. Expect 2-3 questions testing your ability to distinguish between single source (no competition possible) and fixed budget (competition within a cost ceiling).
Key Points to Remember (for the exam)
- Single Source Definition: Used when only one source verified to possess patents or exclusive rights can furnish the item/service—not a favored provider choice
- Fixed Budget Method: Requires disclosing available budget to sellers and selecting the highest ranking technical proposal within that budget
- Seller Adaptation: With fixed budget, sellers will adapt scope and quality of their offer to the budget constraint
- Buyer Responsibility: The buyer must ensure the budget is compatible with the SOW and that the seller can perform tasks within the budget
- Key Distinction: Single source = no alternative suppliers exist; Fixed budget = competition exists but with a cost ceiling
- Common Confusion: Single source is NOT sole source (sole source = only one provider exists; single source = chosen despite other options)
Typical PMI Exam Example
A project requires specialized medical equipment protected by a patent held by only one manufacturer. The procurement team invites only that manufacturer to submit a proposal. Which source selection method is being used? Answer: Single source—because only one verified source possesses the exclusive rights to manufacture the item.
PMI Exam Traps
- Trap: Confusing "single source" with "sole source"
- Reality: Single source = only one qualified provider exists; sole source = buyer chooses one provider despite others being available
- Trap: Thinking fixed budget means selecting the lowest cost proposal
- Reality: Fixed budget selects the highest ranking technical proposal within the budget, not the cheapest
- Trap: Assuming single source is a shortcut for preferred vendors
- Reality: PMBOK v8 explicitly states it is "not an attempt to contract with a favored provider"
- Trap: Believing sellers can ignore budget constraints in fixed-budget method
- Reality: Sellers must adapt scope and quality to the disclosed budget
Important PMI Connections
| Related Concept | Relationship Type | Exam Attention Point |
|---|---|---|
| Procurement Statement of Work (SOW) | Must be compatible with | Fixed budget must align with SOW; buyer verifies seller can perform within budget |
| Source Selection Criteria | Evaluation method | Fixed budget uses technical proposal ranking; single source uses unique capability verification |
| Quality and Cost Based Selection | Alternative method | When risk/uncertainty is high, quality should be key compared to cost (opposite of fixed budget) |
| Make-or-Buy Analysis | Precedes selection | Single source may trigger make-or-buy analysis if no external suppliers exist |
Quick Review Questions
- When is single-source procurement appropriate according to PMBOK v8?
- In the fixed-budget method, what is selected when evaluating seller proposals?
- What must the buyer ensure before using the fixed-budget method?
- How do sellers respond to the fixed-budget constraint?
- What distinguishes single source from "favored provider" selection?
PMBOK v8 Reference
Section 12.2.2.4 - Source Selection Methods (Procurement Management Knowledge Area, Planning Process Group)