No-bid spending is the practice of awarding a contract or service to a particular company, organization, or individual without soliciting bids from other potential providers. Many governments and organizations have set limits on how much they will spend on such no-bid contracts, sometimes referred to as sole source contracts.

The primary reason for establishing these limits is to ensure that services and goods are procured in an open and transparent manner with an emphasis on fairness and competition. By limiting no-bid spending, public bodies can minimize risk associated with fraud or ineffective goods or services being purchased at inflated prices. Furthermore, it helps discourage cronyism by requiring that contracts be awarded based only on merit rather than political connections or personal gain (1).