The fundamental distinction between closed and open proprietary specifications con- cerns substitutions. Closed proprietary specifications generally prohibit substitutions, whereas open specifications permit them. Different specifying objectives are served by each method. In the closed specification, the A/E is certain that the named products will be provided. In open specifications, the named product serves only to indicate the desired properties and acceptable level of requirements.
Closed Proprietary Specification
• Only one product is named.
• Several products may be named as options.
• There can be no substitutions.
Open Proprietary Specification
• Prices are requested for specified alternative products.
• Substitutions and cost adjustments may be proposed by the bidders.
• Products are allowed as substitutions after approval by A/E.
3.1.4.1.1 Closed Proprietary Specifications The closed proprietary specification permits the design to be completed to a high level of detail. This reduces variables and
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promotes accurate pricing; however, it does not offer protection against possible higher costs. The supplier of a specified proprietary product could take unfair advantage of being the sole source and increase the price of the product. Another difficulty occurs when a contractor is obliged to use a product with which it has had an unsatisfactory experience, such as slow delivery, lack of proper technical services, or difficult payment arrangements. Claims of collusion between the A/E and a sole-source supplier could be raised.
A closed proprietary specification can list one product or name several products as options. In either case, substitutions are not allowed. The control of the products and substitutions is accomplished by cross-reference in the instructions for procurement in Section 01 25 13—Product Substitution Procedures, which provides statements similar to the following:
• One Product. Where a product is specified by naming only one manufacturer, no substitute product will be considered. Bids must be based on the named product.
• Optional Products. Where products are specified by naming several manufactur- ers, no substitutes will be considered. Bids must be based on one of the named products.
Under the optional product approach, the successful contractor may be required to submit a product selection list at the time the bids are received or within a few days after the bid opening.
This method of listing several optional products overcomes many of the objections raised when only one product is specified. If at least three products are named, competi- tion may be achieved; however, the A/E must ensure that the named products are equiva- lent and acceptable.
3.1.4.1.2 Open Proprietary Specifications Open proprietary specifications may alleviate the problem of overpriced sole-source items.
Requested Alternates. There are several ways that proprietary specifications can be opened to allow alternate products. One method is to request proposals for alternate products. This form of proprietary specification defines the materials in the same way as a closed specification (i.e., only one brand is named for each material or item of equipment specified). Alternates to the specified products are named in the specifica- tion. The proposals submitted must be for the base-bid items, but the bidder may list prices for specified alternates. Space for quoting alternates should be provided on the bid form. A statement similar to the following might be used in the instructions for procurement:
• Where a product is specified by naming only one manufacturer, substitute prod- ucts will not be considered.
• Where alternates to the base-bid products are requested, bidders may list prices for alternates on the bid form. Bid price for each alternate product must in- clude amount required to incorporate alternate product in the project. Re- quests for additional money for alternates after execution of agreement will not be considered.
This allows the bidder/proposer to select alternates and quote prices for preferred items. It may or may not be mandatory for the bidders/proposers to quote on all requested alternates.
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The terms alternate and substitute are often misused. An alternate is something that is named for which alternative pricing is requested; a substitute is something that is re- quested to replace an item as specified.
Proposed Substitutions. This form of open proprietary specification is prepared in much the same way as a specification requesting alternates. However, no alternates are named in the specifications. The bid/proposal must be based on the specified materials, but the bidder/proposer is permitted to submit requests for substitutions, provided the bidder indicates the difference in cost that will result if the substitutions are accepted.
Substitutions must include product name, nomenclature, and name of manufacturer, along with complete specifications and descriptive data. If the number of substitutions is unlimited, the task of evaluating and analyzing bids/proposals may become quite large.
A page should be provided with the bid form for listing proposed substitutions. The following paragraphs in the instructions to bidders help to eliminate the indiscriminate listing of products that the A/E must evaluate and help to ensure that the proposed sub- stitutions will be worth considering:
• Bids shall be based on the specified products. However, bidders are encouraged to quote on substitute products by listing them on the substitution page of the bid form and by indicating the cost increase or decrease. Substitutions will not be considered after award of contract.
• The specified products have been used in preparing the drawings and specifications and thus establish minimum qualities that substitutions must meet to qualify as acceptable.
• Proof of equality rests with the bidder and adequate supporting information must accompany the bid.
• The bid price for each proposed substitution shall include all costs required to incorporate the substitution into the project. Later requests for additional money for substitutions will not be considered.
Controlled Substitutions. In this type of open proprietary specification, specific products are named but substitutions are allowed under procedures specified in Section 01 25 13—Product Substitution Procedures. A requirement may be met with the specified item or by a similar product that is not necessarily identical but that is alike with respect to performance. This method saves time during the development of a specification because only one product needs to be investigated and specified for each requirement.
The principal problem associated with this type of proprietary specification is that attempts are often made to substitute materials of different characteristics or requirements than those specified. This can occur when the time to submit proposed substitutions is improperly or inadequately specified. A weak specification is one that allows the contrac- tor to propose substitutions after contract award. This practice leads to additional bid shopping and pressure on the A/E to accept many substitutions. The owner may some- times end up with substitute products with different characteristics.
The control of the A/E can be enhanced if the following requirements are also included:
• Substitution requests from bidders are in writing and requests from manufacturers and suppliers are not considered.
• A definite deadline for the submittal of requests for substitutions is established.
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• Submittal of supporting data by the bidders/proposers is required.
• A written acceptance of substitutions is issued to all bidders/proposers by an addendum.
Establishing the deadline for requests is the prerogative of the A/E. For many projects, the established date for indicating accepted substitutions will determine the time limit for product substitution requests. At least three days between deadline and addendum publication should be allowed for proper consideration.
The requirements and procedures for requesting substitutions are best specified in Section 01 25 13—Product Substitution Procedures. This section can be used to de- fine limitations on substitutions, contractor’s representation in requesting substitutions, method for requesting substitutions, and submittal procedures. While some government agencies require that proprietary names used in the specifications be followed by phrases such as “or approved equal,” “or equivalent,” and “or equal,” this is redundant if the proj- ect manual contains a comprehensive Section 01 25 13. The Construction Specifications Institute (CSI) principle of “say it once” again applies.
The instructions to bidders should state times for submitting requests for substitutions during the bidding period; however, they should cross-reference to Section 01 25 13 for other requirements and procedures.
The following statement may be used in the instructions to bidders for this purpose:
Th e specifi ed products establish minimum requirements that substitutions must meet to be considered acceptable. To obtain acceptance of unspecifi ed products, submit written requests at least 10 days before the bid date. Requests received after this time will not be considered. Refer to Section 01 25 13—Product Substitution Procedures for requirements and procedures for requesting substitutions.
The proprietary specification may be extended by including descriptive requirements of the specified products in addition to the brand name and nomenclature. Substitutions must meet these requirements. When the characteristics of products are specified in this manner, they establish a basis for acceptance or rejection of proposed substitutions within the specifications.