Construction Law

?Or Equal? or Not

By Ryan McCabe

    This article was contributed by R. Bryan Barnes of my law firm.

    Bid specifications frequently contain the identification of a product to be provided by the bidder but, then allow an "or equal". Bidders who receive the contract may find themselves in the position of being unable to provide the product specified because the product manufacturer has discontinued the line, gone out of business or only provided a limited supply. The contractor?s remedy in these circumstances may differ based upon the procurement policy or procurement code of the governmental entity with whom he has a contract. However, the general rule is "references in specifications to [products] shall be regarded as establishing a standard of quality and shall not be construed as limiting competition. The contractor may, at its option, use any equipment, material, article or process that . . . is equal to that named in the specifications . . ." FAR 52.236-5.    

    It has been held that under these circumstances, the contractor has the right to submit an "equal" even though the specification omitted the words "or equal." The Court noted that the government must omit or change the standard-of-quality language where it wants to require the use of only one product. The point here is that specifying only one product can be limiting upon competition and can drive the price up.

    Sometimes a specification is written around a proprietary product. For example, a specification may be written with such descriptive words that only one product can be used, even though it has not been identified by brand name. In such a circumstance, a Federal Appeals Court held that a proprietary specification should be treated as though the product that was identified by its brand name, giving the contract to the right to submit an "equal" product even though no "brand name" was used in the specification. To hold otherwise would allow the government to subvert the competitive bidding process by writing specifications "around brand-name products." Construction Law Handbook section 7.02 [C][7][a][iii].

    Once in a while, a contractor may encounter a brand name or equal specification, but later find that the specified brand name product is unavailable. The resolution of these cases involves a consideration of the contractor?s knowledge of availability at the time of bidding and the balancing of fault between the government and the contractor. Therefore,

• when a project is bid where the time between the bid opening and the date the product is used is lengthy and
• the manufacturer of the product goes out of business,
• and the contractor would have had no way of predicting this turn of events,
• the subcontractor should be allowed to submit an "or equal" product.

    This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

Full post as published by The South Carolina Construction Law Blog on June 27, 2008 (boomark / email).