The local source finds gems in the current directory for fulfilling dependencies.
Local sorts before Gem::Source and after Gem::Source::Installed
# File rubygems/source/local.rb, line 18
def <=> other
case other
when Gem::Source::Installed,
Gem::Source::Lock then
-1
when Gem::Source::Local then
0
when Gem::Source then
1
else
nil
end
end