Marc I apologize. Maybe you could point me to where the BASETOOLS parameter is documented?
I checked the BSP Build Guide (all versions), the BSP Programmers Guide, the BSP Eratta, and the Getting Started Guide.
The example you gave, "BASETOOLS=../EDK2/BaseTools/Source/C/bin ../spi-flash-tools/Makefile" was not useable when following the Build Guide because (1 there is no EDK2 directory and (2 we are executing two levels up, out of sysimage/sysimage.CP-8M-release.
The single command line I used that I verified to work is:
../../spi-flash-tools/Makefile BASETOOLS=/home/galileo/QUARK_EDKII/Basetools/Source/C/bin capsule