Originally authored by James E. Meadows, Culhane Meadows PLLC for Lexis Practical Guidance® US, and adapted for Lexis+® UK.

This Practice Note discusses the considerations faced by the customer commissioning an outsourcing process in its approach to the marketplace of potential outsourced services providers and the alternative methodologies that it can take to narrow the field at several consideration stages of the selection process. It is aimed at general commercial practitioners advising business customers in relation to outsourcing transactions in the private sector, and does not consider public procurement outsourcing considerations. If you require guidance on public procurement, see: Procurement procedure—overview.

In the context of choosing a procurement approach for an outsourcing agreement, no single strategy suits all situations and quite often unique circumstances will necessitate a custom made approach. For example, clients (customers of outsourcing services) often favour competitive bidding approaches, but in particular situations, sole source arrangements can yield the kind of competitive terms usually obtained through formal competition, particularly when one can leverage existing relationships or adopt a phased approach in achieving its outsourcing