A lot of the time, that's ok. A few people in the know want to avoid a lengthy and wasteful evaluation process for the product or company they already feel confident will meet their needs. Or worse, they're afraid someone might underbid, people without context will pick the lowest cost option, and the product or service will end up being a disaster.
The problem comes in when things like this happen - that a company forces itself to be the only option through unnecessary infrastructure and proprietary software in the public space.